Sitting of 1 December 1982

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  TRANSPORT
  Mr. Speaker: Order. Once again I remind the House that brief questions are best.
  TRANSPORT

    Electrical Multiple Units
    Mr. Stoddartasked the Secretary of State for Transport what is the average age of electrical multiple units running on the third rail system on British Rail lines.
    The Under-Secretary of State for Transport (Mr. Reginald Eyre): Just under 20 years.
    Mr. Stoddart: Is the Minister aware that many of those units, especially the ones on the Brighton line, are dilapidated and urgently need refurbishing? Is he further aware that the Swindon railway workshops were promised a 10-year rolling programme to refurbish the EMUs on the Brighton line but are now unable to do so because of restrictions on the external financing limit? Will he do the commuters on the Brighton line a favour by extending the external financing limit so that we can get on with the work?
    Mr. Eyre: I note with sympathy the hon. Gentleman's point about Swindon. He will appreciate that it is for British Rail to decide on its refurbishment programme. Refurbishment is extremely beneficial to those vehicles and produces one that is as attractive as a new one to passengers.
    The hon. Gentleman must understand that Government support to British Rail is now at the highest level ever. In those circumstances, it is for British Rail to make the best use of its resources for carrying out improvements of the type for which he asks.
    Mr. John Wells: Is my hon. Friend aware of the great problems of all commuters in the Southern region, especially those travelling on the mid-Kent and Maidstone lines? Is he aware that modernised rolling stock would make commuters' journeys more comfortable? May we be assured of some early progress?
    Mr. Eyre: I understand and sympathise with my hon. Friend's point about commuters' problems. He will be encouraged to know that the programme of refurbishing vehicles that run on the third rail system applies with special benefit in Kent, where that system operates. I hope, therefore, that his constituents who are travellers will find their conditions of travel much improved by the refurbishing programme.
    Mr. Adley: Will my hon. Friend confirm that he accepts that the running of commuter services is part of the social fabric of the country, that if British Rail does not do it nobody will, and that that would place an intolerable burden on the roads? On that basis, does he agree that the public purse has an obligation to keep the units as modern and as efficient as possible?
    Mr. Eyre: I accept all the terms of my hon. Friend's question. He is right to emphasise the importance of those matters to commuters. They are never out of our minds in the Department.
    Mr. Joseph Dean: Is the Minister aware that a recently published report shows that while railway systems in most major industrial nations are expanding, ours is contracting?
    Mr. Eyre: Yes, but the hon. Gentleman must take account of the reasons for the financial problems of the British Railways Board. They are created by a loss of traffic and are aggravated by senseless and irresponsible strikes. Government support is at the highest level ever, but it is for British Rail to settle the problems of industrial disputes and move towards modern working practices that will make good use of investment.

    British Rail
    Mr. Charles R. Morrisasked the Secretary of State for Transport when he anticipates he will next meet the chairman of British Rail to discuss the public service obligation.
    The Secretary of State for Transport (Mr. David Howell): I meet the chairman of the British Railways Board frequently to discuss this and other issues.
    Mr. Morris: When the Secretary of State next meets the chairman of British Rail, will he raise with him the threatened withdrawal of the Manchester to London rail sleeper service? Is he aware that it was that service that attracted some trouser-related notoriety? Can he assure the chairman of British Rail that there are hon. Members who are prepared to make the supreme sacrifice of seeing successive Chancellors of the Exchequer go trouserless if the service is retained?
    Mr. Howell: I am sure that my right hon. and learned Friend will be grateful for the right hon. Gentleman's attention to his sartorial needs and concerns. With regard to the provision of sleeper services, it is mainly a matter for British Rail and its marketing division to provide services for which there is a demand. I shall see that the matter is drawn to the attention of the chairman of British Rail.
    Mr. Major: In view of the need to improve the public service obligation, is my right hon. Friend yet able to say when he will approve investment for the electrification of the east coast main line scheme?
    Mr. Howell: Not yet. The success of the east coast main line investment rests on making the inter-city business profitable. That has been recognised by British Rail, and was made clear by the Government as long ago as 1981. I am still awaiting the board's revised proposals on how that profitability is to be achieved. Until I have received those, it is not possible to reach a decision.
    Mr. loan Evans: Instead of the Government pursuing a policy of having yet heavier juggernauts on the roads,

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    why does not the right hon. Gentleman try to get more traffic on to the railways? Do we not need a co-ordinated transport policy that encourages traffic on the railways rather than on our overcrowded roads?
    Mr. Howell: As the hon. Gentleman will recall from our debates last week, the Government have agreed to raise to a maximum of 60 per cent. the grants for encouraging the movement of road freight on to rail through rail facilities at warehouses. The Government recognise that, but neither British Rail freight nor the interests of the nation would demand that there should be artificial protection for the rail freight industry. On the contrary, British Rail management wants to compete on fair terms, but to do so it must have efficiency, the removal of restrictive practices and high efficiency operations on the railways.
    Mr. Robert Hughes rose—
    Mr. Speaker: Order. If Front Bench speakers wish to ask questions, will they please indicate their intention earlier so that I can maintain a proper balance?
    Sir Peter Emery: Will my right hon. Friend urge the chairman to announce that British Rail has every intention of keeping in operation the Waterloo to Exeter service, which is the longest service run by Southern Region? There is some fear in Dorset and Devon that this service might be closed. That would be a major worry to people living in those counties. I believe that there is no truth in the rumour, but it would help if a statement were made by the chairman of British Rail.
    Mr. Howell: Nothing of that kind has been raised either with myself or with the Government, but I shall draw my hon. Friend's remarks to the attention of the chairman of British Rail.
    Mr. Robert Hughes: While the Minister has fairly recently revised the PSO for last year to take care of what he calls "transitional finance", when will he announce the PSO for 1983–84?
    Mr. Howell: Fairly shortly.
    Mr. Parryasked the Secretary of State for Transport when he next intends to meet the chairman of the British Railways Board to discuss investment in British Rail.
    Mr. David Howell: I meet the chairman frequently to discuss various matters of mutual interest.
    Mr. Parry: Will the right hon. Gentleman explain to the chairman how he expects British Rail to maintain an efficient and modern railway system when the Government are renewing only half the necessary requirements for basic assets? The right hon. Gentleman is also plundering public property by selling off British Transport hotels, including the Liverpool Ade1phi. When will he stop this asset stripping and make a positive contribution to the future of British Rail?
    Mr. Howell: The hon. Gentleman talks about asset stripping, but hotels overall are a drain on British Rail's finances. I should have thought that the hon. Gentleman would welcome anything that checked the drain on finances and enabled British Rail to increase its investment and improve the rail system.
    As to the hon. Gentleman's earlier strictures, as my hon. Friend the Under-Secretary has said, the social
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    obligation payment to British Rail now stands at its highest level ever. The external financing limit for next year has been announced. That is broadly the same in real terms and is considerably up in cash terms. This year and last, about £240 million went straight down the drain because of strikes, and that could have gone towards better support for British Rail. There is no constraint through the investment ceiling on what British Rail invests. The constraint is that sums that should be going towards investment and equipment, which I should like to see on a greater scale, have in the past been drained away on costs. The sooner we improve that, the better it will be for the future of British Rail.
    Several Hon. Members rose—
    Mr. Speaker: Order. We are still on question No. 3, when by this time we are usually on question No. 5. I remind the House that long questions and answers delay our business.
    Mr. Michael McNair-Wilson: When my right hon. Friend last saw the chairman of British Rail, did the chairman express any views about whether it was reasonable for British Rail to continue to run a network of 11,000 miles of permanent way? In view of the comments of Mr. Lance Ibbotson, does my right hon. Friend think that it is time to reappraise how large a rail network we require?
    Mr. Howell: I have long taken the view that we need to appraise whether the considerable sums paid by the taxpayer to British Rail are securing the social service—over and above the commercial service—that is required. It was in the light of that view that we set up the Serpell committee to look at both this and longer-term questions. That committee will be reporting fairly soon.
    Mr. Robert Hughes: The right hon. Gentleman said that the Serpell committee would be reporting fairly soon. Will the right hon. Gentleman ensure that the report is published in full as soon as possible and that there will be a proper opportunity for debate in the House land elsewhere before the Government make up their mind? Frankly, the right hon. Gentleman's record on consultation is quite appalling.
    Mr. Howell: I certainly hope that the conclusions of the Serpell report can be published, but I must take a view on the basis of the report, which I have not yet seen. As to a debate, I shall draw the hon. Gentleman's views to the attention of my right hon. Friend the Leader of the House.
    Mr. Moate: Is my right hon. Friend aware that previous Governments allowed British Rail to finance by leasing using private sector finance—for example, for its locomotive programme? Is it not time that both British Rail and the Government adopted a far more determined approach to the harnessing of private sector resources and initiatives in developing British Rail investment?
    Mr. Howell: I should like to encourage those initiatives wherever possible. My hon. Friend is aware that with regard to freight wagons, the arrangements combine private capital and operations on the railway. The chairman of British Rail has recently expressed interest in the idea of harnessing private investment for the Victoria-Gatwick link, and I have no doubt that there are other possibilities. That is one way of bringing more investment and capital in to improve our railways, a way to which we should not close our minds.

    M1 (Accidents)
    Mr. Greville Jannerasked the Secretary of State for Transport how many road accidents have been caused as a result of roadworks on the M1 during the last year for which records are available.
    The Under-Secretary of State for Transport (Mrs. Lynda Chalker): The accident report form supplied by the police gives no information as to the causes of accidents, although the presence or absence of certain unfavourable circumstances is noted.
    During 1981 there were 172 personal injury accidents on the M1, outside the Metropolitan area, in which road works were reported to be present. In 13 such accidents the roadworks were hit.
    Mr. Janner: Will the Minister accept, from one of those who hit the road works, that while roadworks are in progress on the M1 the motorway is far more dangerous than normal and that during the present season of fog and ice people should cease behaving like homicidal maniacs, thereby risking their own lives and others on the roads, not least the lives of hon. Members going to and from their constituencies?
    Mrs. Chalker: I accept what the hon. and learned Gentleman says about the increased danger on the roads at this time of year. Motorists would do well to observe the speed limits. However, since we started the longer crossovers and the shorter length of road under repair, the accident rate on all the sections has fallen dramatically. That is good news. But too high a speed in bad road conditions will cause accidents.
    Mr. Gwilym Roberts: I have frequently come across these roadworks, but have not hit them. Does the Minister accept that this is a matter of widespread concern among the travelling public? If there are no figures on the relationship between accidents and road works on motorways, is it not time that such figures were compiled? Is it possible for the Minister to give her original figures as a proportion of the total number of accidents, so that we can judge the contribution that road works make to the accident figures?
    Mrs. Chalker: I frequently ask for more statistics so that we can see whether there is any casual relationship, but hon. Members would be wrong to draw the conclusion that accidents are necessarily more prevalent at road works. Accidents arise from a combination of factors. Often the most important factor is that drivers fail to reduce speed when conditions demand that they should.
    Mr. Higgins: Are the speed limits displayed near road works legally enforceable? If so, is my hon. Friend aware of any prosecutions for exceeding those limits?
    Mrs. Chalker: I am not aware of any prosecutions, but I shall look into the matter further.

    British Rail
    Mr. Farrasked the Secretary of State for Transport what is the proposed level of Government subsidy for British Rail in each of the next three years.
    Mr. David Howell: I am at present discussing the appropriate level for 1983 with the Railways Board. Decisions on later years will be taken in the light of the review of railway finances under Sir David Serpell, whose report I expect to receive shortly.
    Mr. Farr: I am grateful to my right hon. Friend for that reply. Whatever conclusions he may reach, the sums involved will be very large. Will he ensure that there is no possibility of public money being wasted in the way that has occurred on the St. Pancras to Bedford line, where £150 million worth of rolling stock has lain idle for nearly a year due to union manning disputes?
    Mr. Howell: My hon. Friend is right to draw attention to that. It is a matter of great concern. We all welcome the prospect of more investment in new equipment and rolling stock for British Rail, but it is essential that when the investment takes place the equipment is worked with proper manning levels and without restrictive practices. Until there is a change in the present situation, it is difficult to win public confidence and support for further improvement of the British Rail system and the investment that we all want.
    Mr. Whitehead: What conclusions does the Minister draw from the fact that on the London-Midland line, which serves the hon. Member for Harborough (Mr. Farr) and me, revenues have dramatically increased since the belated introduction of high-speed trains between London and Sheffield? Does the Minister agree that such investment raises both morale and revenue, and that that is what we need, rather than carping and sniping at British Rail?
    Mr. Howell: Yes, I agree with that. The HST programme has been particularly successful, although in some senses internationally underrated. The 125 mph high speed diesel trains are a remarkable railway achievement.
    Mr. Adley: Will my right hon. Friend confirm yet again that in terms of finance there are two railways—the one that British Rail is able and willing to run profitably, and the social railway that the nation demands? Does he agree that there are far too many questions about the British Rail subsidy and far too few about the subsidy for the M1 motorway, the cost of repairs, police, accidents and time lost? Is it not time that a fairer comparison was made?
    Mr. Howell: Yes. I hope that the results of the Serpell committee inquiry will help to disentangle which parts of the railway are run for social reasons and which parts are or should be run commercially.
    Mr. Dobson: Does the Secretary of State recall that during the industrial dispute earlier this year both he and the chairman of British Rail constantly said that if the railway unions accepted the productivity package it would result in investment in the railways? How many investment schemes has he approved since the productivity agreements were reached?
    Mr. Howell: The hon. Gentleman may not be aware that final agreement has not yet been secured. It is the subject of current negotiations. I am anxious that British Rail should be able to move forward on all the agreements that were signed in 1981 but have not yet been delivered. Those agreements are a precondition for the successful working of existing investment, let alone new investment.

    Public Transport Fares
    Mr. Canavanasked the Secretary of State for Transport what has been the percentage increase in public transport fares since May 1979.
    Mr. Eyre: Public transport fares increased by about 16 per cent. in real terms between May 1979 and October 1982.
    Mr. Canavan: How much of that increase is due to cuts in Government transport subsidy and cuts imposed by the Government on local authority transport subsidies? Is it not a classic example of Tory double standards when Ministers refuse to provide an adequate transport subsidy for the general public but approve a 100 per cent. transport subsidy for themselves so that they can travel around for nothing in the luxury of chauffeur-driven limousines?
    Mr. Eyre: The hon. Gentleman completely misrepresents the facts. I point out to him very firmly that since May 1979 revenue support to public transport has risen in cash and in real terms. I hope that he will go away and think seriously about that, as it shows what rubbish his question was.
    Sir Albert Costain: Leaving aside all political implications, does my hon. Friend appreciate the social consequences of the increase in fares? Is he aware that the price of a season ticket to London from Folkestone has risen fourfold since I have had the honour to be in the House? Does he realise that, as people used to commute from Folkestone to London, the increases mean that house prices in Folkestone have fallen while those in London have risen? Should that not be considered before further price increases are approved?
    Mr. Eyre: My hon. Friend is absolutely right to emphasise the importance for the quality of life generally of efficient public transport. The way to get public transport fares under control is through higher productivity, worthwhile investment and responsible wage settlements. Throwing money away on irresponsible current subsidies makes it impossible to finance the investment that could cut costs and make the services more attractive.
    Mr. Newens: Is the Minister aware of the enormous increase in fares on the section of the Central line that runs through Essex, especially the Epping and Ongar section, because of the refusal of the Conservative-controlled Essex county council—unlike the Labour-controlled GLC—to claim transport supplementary grant to provide a subsidy for that line? Is he aware that all services on that line are to disappear, except for those in the rush hour? Will that not prove to be a recipe for the eventual closure of the line? Will he do something about it?
    Mr. Eyre: As the hon. Gentleman knows, it is for Essex county council to decide what support should be given to that line. The fact that fares in London have risen 40 per cent. more than the retail prices index makes one think very seriously about the policies of the GLC.
    Mr. Neubert: When challenged about public transport fares, will my hon. Friend never fail to mention the need for efficient and economical operation? Is he aware that today London Transport announced that it suspects that it is losing £30 million through fraud? Would not the elimination of that fraud contribute to lower fares than the 40 per cent. increase to which he has referred?
    Mr. Eyre: I know that the director of London Transport is very concerned at the loss of revenue through fraud and is considering various measures to decrease that loss.

    Driver and Vehicle Licensing Centre
    Mr. Michael Brownasked the Secretary of State for Transport what improvements he expects to be brought about by the introduction of a new computer system at the Driver and Vehicle Licensing Centre in Swansea.
    Mrs. Chalker: It is planned to bring the new system into operation over the next three years. It is designed to provide a more rapid service to the public and will enable us to make significant manpower savings.
    Mr. Brown: I am delighted to hear that reply. Is my hon. Friend aware that I have had to write to her Department in Swansea in the past three weeks about two cases of delay in the issuing of driving licences? Will she assure us that during the interim period while the new computer comes into operation steps will be taken to ensure the reduction of the delays that have taken place recently?
    Mrs. Chalker: I understand that there have been problems in a small minority of cases, about some of which my hon. Friend has written to me. Our current aim is to handle 90 per cent. of transactions within 10 days. When we have an on-line rather than a batch processing system we shall be able to deal with far more inquiries instantaneously. I assure my hon. Friend that we are providing for the continuation of the old system until the new system is fully operational, with the help of private computer consultants.
    Mr. Moate: How many people are now employed at Swansea, particularly in dealing with vehicle excise duty? Are the Government taking steps towards a fundamental reform of the car licensing and VED systems?
    Mrs. Chalker: The Driver and Vehicle Licensing Centre at Swansea and the local vehicle licensing offices now employ 5,500 people. That is 1,500 fewer posts than when the Government took office, despite a 4 per cent. increase in work load. We are continually reviewing the way in which jobs are carried through to make the service more efficient. The VED system was examined in 1979 by the then Secretary of State for Transport, my right hon. Friend the Member for Sutton Coldfield (Mr. Fowler), and the Government decided not to abolish vehicle excise duty because of the effect on rural motorists and business users.

    Heavy Lorries (Testing)
    Mr. Boothasked the Secretary of State for Transport what are the outstanding issues to be resolved before heavy goods vehicles testing can be transferred to the Lloyd's Register Vehicle Testing Authority.
    Mrs. Chalker: Much progress has been made in our discussions with Lloyd's Register of Shipping. There are still a number of issues to be resolved and detailed discussions are continuing on such matters as the conditions for occupation of the test stations by LRVTA, terms and conditions of employment for staff, and arrangements for LRVTA's relationship with the Department after transfer.
    Mr. Booth: Does the Under-Secretary of State recall that when what is now the Transport Act 1982 was passing through the House hon. Members who objected to the proposal to transfer HGV testing stations to the private sector were given increasingly firm assurances that the

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    passing of the Bill would enable the transfer to be made, virtually immediately, to Lloyd's? As the gravest doubts are cast on those assurances by the hon. Lady's answer to me, may we have a categorical assurance that if this transfer is not successfully negotiated there will be no transfer of the HGV testing to the private sector, and that in no circumstances will HGV testing be broken up and handed over to a series of private firms?
    Mrs. Chalker: I remind the House that I never expected the transfer to proceed immediately. The Act that permits the transfer received Royal Assent only a few weeks ago. Discussions are continuing well towards agreement. I hope that agreement will be reached, because the Government's declared aim has been to transfer all 91 stations together. At present we are not considering any other solution.

    British Rail
    Mr. Robert Hughesasked the Secretary of State for Transport what will be the maximum investment expenditure possible by British Rail operating within the external financing limit announced by the Chancellor of the Exchequer for the current year and next year.
    Mr. Howell: The British Rail investment ceiling is £462 million in 1982–83 and £497 million in 1983£84.
    Mr. Hughes: How much of that figure is available to British Rail for investment, because, increasingly, British Rail says that it is unable to meet the investment programme by reason of the constraints placed upon it by the Government?
    Mr. Howell: As my answer will have shown the hon. Gentleman, the investment ceiling is not one of those constraints. The answer to the hon. Gentleman's question must lie in British Rail containing its operating costs and in generating the funds available for investment up to the substantial ceiling that I have outlined.
    Mr. Nicholas Winterton: I was delighted that my right hon. Friend visited my constituency on Saturday of last week, although, sadly, I had to be with my regiment in Preston. What percentage of the resources that my right hon. Friend has announced today will be available to British Rail to assist with the commencement of a Channel tunnel, which is vital not only to the United Kingdom and industry in the North-West—which would benefit greatly from a rail-only tunnel—but to the construction industry?
    Mr. Howell: I was delighted to visit my hon. Friend's constituency recently, but I cannot—
    Mr. Cryer: The right hon. Gentleman was probably even more delighted that the hon. Member for Macclesfield (Mr. Winterton) was not there.
    Mr. Howell: I had a very pleasant time.
    However, I cannot answer that question. There are later questions concerning the Channel tunnel. At the moment financial viability is being examined by a group of banks. They have not yet reached a conclusion, but, when they do, I shall be in a position to advise my hon. Friend further.
    Mr. Foulkes: Will the Secretary of State confirm that British Rail has put forward proposals for investment in a modified form of the advanced passenger train to run between Glasgow and London? When will the right hon.
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    Gentleman be able to announce the go-ahead for the modified form of the APT, so that it can at last run between Glasgow and London carrying fare-paying passengers?
    Mr. Howell: I have not yet had such specific proposals put before me.
    Sir Albert Costain: May I assure my right hon. Friend that, should he visit Folkestone, he will be able to see the site of the Channel tunnel—and I promise not to be in Preston when he comes?
    Mr. Howell: I am grateful to my hon. Friend for that invitation. It is nice to be in demand.
    Mr. Robert Hughes: Will the Secretary of State deny any speculation that the new advanced passenger train will run, not to Glasgow, but only as far as Liverpool and Manchester?
    Mr. Howell: The precise arrangements for the use of the train are a matter for British Rail. These are matters that should be announced by and referred to the chairman of British Rail.

    Traffic Management Schemes
    Mr. Eggarasked the Secretary of State for Transport if he will list his powers in relation to traffic management schemes proposed by the Greater London Council which affect trunk routes.
    Mr. Eyre: My powers in relation to traffic management schemes affecting trunk roads in Greater London are derived from section 6(2) of the Road Traffic Regulation Act 1967, which enables my right hon. Friend the Secretary of State or, with his consent, the Greater London Council, to make traffic regulation orders relating to trunk roads.
    Mr. Eggar: Is my hon. Friend aware that the GLC is trying to impose on Enfield town a contra-flow bus scheme at a cost of £90,000? Is he further aware that this proposal is opposed by the council and by all organisations in Enfield? Will he examine the powers of the GLC in this regard and consider whether he can overrule them?
    Mr. Eyre: Church Street is not a trunk road and it does not come within the provisions that I specified. My right hon. Friend was not consulted when the GLC introduced the proposal for the scheme. I understand that the proposal is on an experimental basis, limited in time. If the GLC wishes to proceed with a permanent order, it must be advertised locally and nationally and the public must be given a right to object.
    Mr. Dykes: Should the Transport Act 1967 be reinforced to limit juggernaut movements in central London?
    Mr. Eyre: I should need to consider carefully an answer to that question. If I may, I shall write to my hon. Friend.

    Rural Transport
    Mr. Kenneth Lewisasked the Secretary of State for Transport whether he is satisfied that the rural areas of the country have a sufficient level of bus transport.
    Mrs. Chalker: It is for county councils, with their local knowledge, to decide how the particular needs of

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    their areas should best be met. Where conventional buses are no longer viable, innovatory forms of transport can be a great help, and my Department is doing what it can to make people generally aware of all the possibilities.
    Mr. Lewis: Is my hon. Friend aware that there used to be a slogan "Get on a bus"?
    Mr. Nicholas Winterton: I have been on two buses today.
    Mr. Lewis: Is my hon. Friend further aware that, apart from peak hours, one cannot find a bus in the countryside. There seem to be fewer and fewer buses. I appreciate that few people travel outside peak times. Does this not show that it would almost pay if some of these subsidies were to go on taxi fares, which would cost less than it costs to run buses outside peak hours?
    Mrs. Chalker: I sympathise with those in rural areas who cannot get the bus services that they wish. That is why we have encouraged the development of community transport and shared taxi systems, which are already running well in many parts of the country, and in which I expect to see a growth in the months ahead.
    Mr. Flannery: Is not the low level of transport in rural areas, and generally, due to a lack of investment in transport by the Government, and is not the biggest restrictive practice in transport precisely that lack of proper investment by the Government? When this matter is examined on a world scale, is not the United Kingdom among the lowest on the international list? Is not the real reason for that the lack of proper rural transport?
    Mrs. Chalker: The hon. Gentleman has got it wrong. Bus revenue support in 1982–83 was £260 million-about 20 per cent. higher than in the previous year. Rural services have not suddenly started to decline. They have been declining for many years. The Transport Act 1980 opened up new opportunities for rural areas, which have been taken up gladly in many parts of the country.
    Mr. Nelson: Is my hon. Friend aware that in many rural areas, such as the one that I represent, fares on public transport are greater than those on private transport on the same routes? While that situation continues it is hardly surprising that many rural communities are not served by bus services, which are becoming increasingly unviable. Will my hon. Friend encourage bus companies to experiment with cut-price fare schemes? If they cut their fares by 50 per cent., they may be surprised to find that use more than doubles and that such systems become feasible.
    Mrs. Chalker: My hon. Friend's proposals are attractive. Few bus companies can afford to run widely flung services in areas where there is insufficient demand for them to run with a sensible pricing system.
    We shall examine the results of any such experiment with great care. We believe that the money that we pay in subsidy, however it is paid, must be put to the best use for people who need to travel.
    Mr. Stott: The hon. Member for Rutland and Stamford (Mr. Lewis) asked the Minister whether she was satisfied with rural transport. I am not surprised that the Minister did not answer the question. The hon. Lady must be aware that National Bus Company mileage fell by 8 per cent. between 1980 and 1981 and that the number of passengers carried fell by 8·3 per cent. in the same year. There was
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    a 9 per cent. loss of jobs in the National Bus Company. Between 1980 and 1981, 43 million miles of stage carriage routes were lost. That has arisen largely—
    Mr. Speaker: Order. This is the time not for argument but for questions. The hon. Member has not asked a question. He may ask one now.
    Mr. Stott: I seem to remember prefacing my remarks by asking the Minister whether she was aware—
    Mr. Speaker: Order. Front Benchers as well as Back Benchers must be fair to the House.
    Mr. Stott: Is the Minister aware that that dismal performance on rural road transport has stemmed largely from the provisions of the Transport Act 1980? Until something is done about that Act, that spiral of decline will continue.
    Mrs. Chalker: The hon. Gentleman quotes many statistics. He should have listened to what I said. Rural services have been declining for many years. The 1980 Act made it easier for the small private operator to work routes which were uneconomic for the large operators.

    Public Transport
    Mr. Gwilym Robertsasked the Secretary of State for Transport if he will introduce proposals to stimulate the greater use of public transport.
    Mr. Eyre: Tighter control of operating costs combined with capital investment to improve passenger facilities is the key to stimulating greater use of public transport. The measures currently before the House will promote efficiency and will help to ensure that resources remain available for valuable investment and are not drained away into unreasonably high and wasteful operating subsidies.
    Mr. Roberts: What response has been given to Staffordshire county council, which has said that the Government's financial support is inadequate to maintain a minimum level of public transport in that county? Does the Minister accept that the provision of public transport is an essential social service for the young and old and many other sections of the community?
    Mr. Eyre: The last time that the hon. Gentleman raised that matter I explained that with regard to transport Staffordshire county council was treated favourably when compared with other councils.
    Mr. Anthony Grant: Is my hon. Friend aware that the best stimulus to increased use of public transport is an improvement in quality? My constituents are still travelling in cattle-truck conditions on London Transport. The first step should be to take London Transport out of the hands of the Greater London Council, which has made such a mess of it.
    Mr. Eyre: There is widespread support for my hon. Friend's comments.
    Mr. Campbell-Savours: Would not one way to stimulate use be to provide different forms of public transport? For example, the Minister could increase British Rail's investment programme to enable it to switch from DMUs to rail buses, which are produced in my constituency. At the end of next year the current orders run out. May we look forward to a continuity in orders by the Government increasing British Rail's external financing limit?
    Mr. Eyre: There is some good sense in the hon. Gentleman's point. We are in favour of having fares as low as possible and public transport to being as good as possible. The essential requirements are a sensible level of subsidy, which we are providing, sensible levels of service, tailored to needs, and efficient operation to prevent subsidies being wasted. By following those principles the resources can be created to improve the services.
    Sir John Biggs-Davison: There would be much greater use of public transport by my constituents if some means could be found to ensure greater uniformity of concessionary fares arrangements between London and Essex.
    Mr. Eyre: I know that that point troubles my hon. Friend. A decision about subsidies is essentially one for Essex county council.
    Mr. Booth: Does the Minister acknowledge that the continuous pursuit of a cheap fares policy by the South Yorkshire metropolitan authority has been accompanied by a higher level of investment in bus services than has occurred in authorities where high fares policies have been pursued? How will the Minister and his right hon. Friend the Secretary of State increase investment in public transport by cutting the transport supplementary grant?
    Mr. Eyre: The right hon. Gentleman knows that the claim of the South Yorkshire metropolitan authority to have increased passengers by 7 per cent. has been accompanied by an admission that its subsidy has risen by no less than 600 per cent. One has to judge whether that enormous cost has yielded an adequate benefit. One of the industry's great problems is to ensure that investment is related to achieving an effective return in improved services.

    Heavy Lorries
    Mr. Dykesasked the Secretary of State for Transport what representation he has received from the public about heavier lorries since his announcement of 4 November.
    Mr. David Howell: I have received some 35 letters from the public since my announcement on 4 November.
    Mr. Dykes: Is my right hon. Friend sincerely convinced, after the generous vote of the House last Thursday for heavier lorry weights, that the heavy lorry operators will accept the overriding need for additional restrictions on the movement and parking of such lorries?
    Mr. Howell: The Government's view is that there should not merely be acceptance by the hauliers, but that the existing powers, which my hon. Friend played no small part in providing, should be used more vigorously. The Government are determined to see that they are so used. We have said that our decisions on the transport supplementary grant will be influenced by the vigour with which various county councils make use of the restrictions on the movement of heavy lorries.
    Mr. Roy Hughes: Has the Secretary of State received a request from Gwent county council to meet a deputation about the difficulties on the Severn bridge, which will be aggravated by the order authorising. the use of heavier
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    lorries? Will the Minister assure the House that the work of repairing and strengthening that vital bridge will be carried out on a 24-hour basis?
    Mr. Howell: I am not aware of having received such a request. The subject of repairs to the Severn bridge has received close consideration and the matter is proceeding. My right hon. Friend the Secretary of State for Wales and I are reviewing the longer-term needs of the Severn bridge.
    Mr. Squire: Is not part of the reason for the much greater acceptance of the Government's proposals on heavy lorries the undertaking to build more bypasses? Will my right hon. Friend carefully review the decision not to build a bypass on the A13 through the Rainham, Essex, part of my constituency?
    Mr. Howell: The Government have decided substantially to increase the bypass programme, but that is not the only reason for the support for our much more comprehensive package of lorry controls. We need to tackle all aspects of the matter—the quality of the vehicles, where they go, where they are routed, bypasses and enforcement. The overall package has rightly been welcomed, because those aspects have been neglected for many years.
    Mr. Skinner: Is the Minister aware that when the Labour Opposition mounted an attack on heavy lorries last Thursday, with a vote to try to stop their introduction—
    Mr. Nicholas Winterton: The Opposition were heavily defeated.
    Mr. Skinner: —we were heavily defeated because, among others, the Gang of Four and the leader of the Liberal Party were missing? Is the right hon. Gentleman further aware that some of us are wondering whether there is a Japanese lorry invasion on the horizon?
    Mr. Howell: The heavy defeat was partly because common sense is on the side of fuller loads on quieter and more efficient lorries and because a good many of the hon. Gentleman's hon. Friends in the trade union movement realised that a vote against the regulations was a vote against jobs, about which the hon. Gentleman waxes eloquent, and rightly stayed away.

  CIVIL SERVICE

    Office Systems
    Mr. Farrasked the Minister for the Civil Service to what extent British equipment is being used for the modernisation of Civil Service office systems.
    The Minister of State, Treasury (Mr. Barney Hayhoe): British equipment is being used as widely as possible, given the need to ensure technical efficiency and cost-effectiveness. The Central Computer and Telecommunications Agency placed contracts for the supply of computer and computer-related equipment totalling £160 million in the three calendar years 1979 to 1981, of which about 76 per cent. was of British manufacture.
    Mr. Farr: Will my hon. Friend assure me that he is maintaining close liaison with his hon. Friend the Minister for Industry and Information Technology about the Civil Service office of the future? Will he also reassure us that

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    he bears in mind that it is imperative that everyone is aware that when foreign machines are purchased British jobs are lost?
    Mr. Hayhoe: I give my hon. Friend an absolute assurance on both points.
    Mr. Cryer: Can the Minister give us an absolute assurance that when senior civil servants involved in equipment purchasing retire they do not join firms with which they have negotiated?
    Mr. Hayhoe: There are well-established procedures for people retiring from the public service, setting out the jobs that they are permitted to take, and the procedures will be fully followed.
    Mr. Nicholas Winterton: In considering the modernisation of Civil Service office systems, will my hon. Friend give due weight to the need to disperse as many civil servants as possible to the regions and consider with sympathy and urgency the need for the Patent Office to be located in Manchester, which is an ideal location for the new office within the EC?
    Mr. Hayhoe: I believe that that supplementary question relates to a later question.
    Mr. Winterton: My hon. Friend avoids answering the question.
    Later—
    Mr. Nicholas Winterton: On a point of order, Mr. Speaker. I seek your advice and assistance. In response to my supplementary question my hon. Friend referred to a later question on the Order Paper. That question was not reached. I seek your advice and assistance in putting what I describe as a bona fide question. Should not my hon. Friend have responded to the question instead of seeking to hide behind what was clearly not another question on the Order Paper in his endeavour to avoid giving an answer?
    Mr. Speaker: Order. I never attribute motives to Ministers. I always assume the best. In any case, it is not my responsibility.

    Financial Management Initiative
    Mr. Eggarasked the Minister for the Civil Service to what extent, in formulating the financial management initiative, he took into account the Minis system developed in the Department of the Environment.
    Mr. Hayhoe: Very fully indeed. The working document with which the initiative was launched referred to Minis as one of the departmental reviews that had pointed the way. The Government expect Departments to establish management systems that include the ground covered by Minis.
    Mr. Eggar: Will my hon. Friend confirm that it will be necessary for all Departments when replying to the FMI to adopt the form and degree of detail of the information displayed in the Minis format in the Department of the Environment?
    Mr. Hayhoe: The recent White Paper made it clear that all Departments had to respond to the FMI by early next year. The Management and Personnel Office and the Treasury will be reporting to the House.
    Mr. Alan Williams: Are not many of the savings that the Government claim achieved at the expense of
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    efficiency? Is the breakdown of DHSS services, such as that in Birmingham, with a reduced staff facing an extra 80,000 claims, not just the tip of the iceberg? Are not frustrated and overstretched officers throughout the country facing rapidly increasing work loads while the Government pursue their shibboleth of arbitrary staff cuts regardless of work load and the effect on the quality of services to the most needy in our society?
    Mr. Hayhoe: That is not a reasonable statement of the position. The numbers are being reduced from the 732,000 when we came to office to 630,000 by 1 April 1984. We are down to 655,000 and are on target to achieve the reduction. Adjustments are being made to the numbers of civil servants to take account of different work loads. I hope that the right hon. Gentleman will join me in deploring the call for a one-day strike in the DHSS and regretting the action, which will hurt the general public.
    Mr. Williams: Is not the action the result of sheer frustration, to which the Government have responded inadequately by offering temporary replacements of staff, who will take three months to train, to deal with a long-term increase in work?
    Mr. Hayhoe: The right hon. Gentleman is badly informed. The NEC of the CPSA, one of the main unions involved, on 17 November recommended a full return to work on the basis of proposals made to the Government. I have the union circular here. The right hon. Gentleman should join me in regretting that the work force did not respond to the call from the union executive and deploring action that will hurt the general public.
    Mr. Nelson: As the Ministry of Defence employs far more civil servants than any other Government Department, has not the Minis system more applicability and potential benefit there than in any other sector? Has the system been introduced there, and if not, why not?
    Mr. Hayhoe: The Ministry of Defence already has elaborate management control systems. Although Minis is relevant, I do not necessarily believe that transplanting it from the Department of the Environment to the Ministry of Defence would be appropriate. The reports coming forward will come to the House next year and will fully set out what has been done in all Departments.

    Unions (Meeting)
    Mr. Parryasked the Minister for the Civil Service what matters he plans to discuss at the next meeting with the Civil Service unions.
    Mr. Canavanasked the Minister for the Civil Service what subjects he expects to discuss at his next meeting with representatives of the trade unions in the Civil Service.
    Mr. Hayhoe: Plans for my next meeting with the Civil Service unions have not yet been made.
    Mr. Parry: When the Minister next meets the unions will he assure them that in the next wage bargaining lower paid civil servants will not suffer the same shabby treatment as that meted out to the Health Service workers?
    Mr. Hayhoe: I do not believe that the Health Service workers have been treated shabbily, so I can give no such assurance.
    Mr. Canavan: Will the Minister discuss the possibility of giving civil servants greater freedom of speech? For example, would it not have been to great public advantage had we known earlier the views of Mr. Andrew Britton, the former under-secretary at the Treasury, who yesterday stated that the Government's monetarist policies had done virtually nothing for the economy's underlying problems and accused them of persisting with an economic strategy that had no firm intellectual base?
    Mr. Hayhoe: I regard that as a partial precis of what Mr. Britton said yesterday. At any rate, it is a long-established custom that civil servants should not indulge in controversial comments about Government policies of the day. I suspect that if that were allowed to happen, under any Government, the whole quality of government and, indeed, the position of this House would be prejudiced.
    Mr. Jeffrey Thomas: In view of recent events. is the Minister satisfied with the personal vetting arrangements for civil servants? When he next meets the unions, will he have discussions with them about the matter?
    Mr. Hayhoe: As the hon. and learned Gentleman knows, matters of this kind are the subject of a review by the Security Commission. I do not think that it is for me to comment today.
    Mr. Dykes: Is my hon. Friend aware that officers and members of the IPCS are worried about terms for obliging people to take early retirement and the contradiction that exists for those who wish to carry on?
    Mr. Hayhoe: There are difficulties within the Civil Service for those civil servants who would like to continue serving after the age of 60 when they have no right as such. Those personal requirements are necessarily in conflict sometimes with wider managerial considerations and taking into the Civil Service people who would otherwise not have jobs.

Social Security Offices
3.32 pm
Mr. Brynmor John: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely
"the projected one-day stoppage in social security offices on Friday 3 December in support of the dispute in the Birmingham local offices on manning levels".
I realise, Mr. Speaker, that I cannot deploy all the arguments in the case, but a statement of some facts about this serious situation is essential. I have to satisfy you, Mr. Speaker, of the specific nature of the matter.
The dispute in the Birmingham local offices on manning levels and therefore on working conditions has continued for 11 weeks without the Department of Health and Social Security being able to resolve it. A 21 per cent. increase in supplementary benefit claims alone in the last year has been accompanied by a 2½ per cent. cut in staff levels. So intolerable did conditions become that most of the local offices in Birmingham became affected. As a consequence, Friday's national stoppage is in support of the Birmingham staff.
The matter is important because many thousands of people on low incomes will be affected by the stoppage in every part of the land and in every constituency, including yours, Mr. Speaker, and mine. The hardship will add to that already being felt in Birmingham where £1 million has been paid to claimants from emergency centres. Already there have been assaults on staff in the emergency centres and tenants in a local authority area are not having their rents paid during the dispute. If the one-day stoppage escalates, the hardship and misery throughout Britain where half the population receive one or another social security benefit is bound to worsen. The importance of the matter is easily demonstrated.
The matter is urgent because slightly less than two days remain in which to try to avert the immediate action and to give the Government an opportunity to try to solve the underlying cause of the national stoppage in Birmingham. This application, in my view, satisfies the three conditions of the Standing Order. This House has a duty to make its voice heard to prevent the possible collapse of a vital social service. If it does not fulfil this duty, democracy itself will be weakened.
Mr. Speaker: The hon. Gentleman gave me notice before noon today that he would seek leave, under Standing Order No. 9, to move the Adjournment of the House for the purpose of discussing
"the projected one-day stoppage in social security offices on Friday 3 December in support of the dispute in the Birmingham local offices on manning levels".
The House listened with concern to the arguments advanced by the hon. Gentleman, who drew our attention
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to a serious matter. As he and the House know, I do not decide whether this matter should be discussed. I merely decide whether it must be discussed tonight or tomorrow night in an emergecy debate.
As the House knows, under Standing Order No. 9, I am directed to take into account the several factors set out in the order but to give no reasons for my decision. After listening carefully to the hon. Gentleman, I fear that I must rule that his submission does not fall within the provisions of the Standing Order. I cannot therefore submit his application to the House.
Sir Peter Emery: On a point of order, Mr. Speaker. I apologise for not having given you notice of this point of order. As it arises out of what has just happened, it would have been impossible to do so. Many hon. Members will take the view that our proceedings depend very much on practice and precedent. Is it not the case that the moving of a motion under Standing Order No. 9 has normally been regarded as a defence for Back Benchers who lack the normal opportunities through the usual channels that are open to the Front Bench to arrange debates? It is only during the last 18 months that the practice has grown of Front-Bench Members requesting debates under the Standing Order No. 9 procedure.
Will you, Mr. Speaker, consider this matter to see whether my submission is correct? If it is correct, there may be a case, I submit, for referring the matter to the Procedure Committee.
Mr. Speaker: Order. Equal rights belong to Front-Bench and Back-Bench Members in such applications.
Mr. Bob Cryer: Further to the point of order, Mr. Speaker. I am sure that you, Mr. Speaker, do not need reminding, but there are perhaps hon. Members who do not recollect that the issue of Standing Order No. 9 went before the Procedure Committee which made a recommendation to the House. The House voted overwhelmingly that the Standing Order No. 9 procedure should be retained. It ill becomes Tory Members to carp about Standing Order No. 9 applications when they were raising one every day during the lorry drivers' strike.
Mr. Speaker: Order. The hon. Gentleman is correct. The House declined to accept the recommendation of the Select Committee on Procedure. Both sides of the House have used the machinery well. They know how it should be used.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 17 DECEMBER
Members successful in the ballot were:
Mr. Peter Bottomley
Mr. Alan Williams
Mr. David Trippier

BILLS PRESENTED
  DISEASES OF FISH
  Mr. John Corrie, supported by Sir Peter Mills, Sir Timothy Kitson, Mr. Albert McQuarrie, Mr. David Myles, Mr. W. Benyon, Mr. John Golding, Mr. John Home Robertson, Mr. Donald Stewart, Mr. Dafydd Wigley, Mr. Russell Johnston and Mr. Robert Maclennan, presented a Bill to make further provision for preventing the spread of disease among fish, including shellfish and fish bred or reared in the course of fish farming: And the same was read the First time, and ordered to be read a Second time upon Friday 21 January and to be printed. [Bill 18.]
  PARLIAMENTARY CONTROL OF EXPENDITURE (REFORM)
  Mr. Norman St. John-Stevas, supported by Mr. Joel Barnett, Mr. Edward du Cann, Mr. Richard Wainwright, Mr. John Roper, Mr. Terence Higgins, Sir John Biggs-Davison, Mrs. Renée Short, Mr. Peter Tapsell, Mr. John Garrett, Mr. Peter Hordern and Mr. Robert Maclennan, presented a Bill to strengthen Parliamentary control and supervision of expenditure of public money by making new provision as to the duties and powers of the Comptroller and Auditor General; by establishing a Public Accounts Commission and a National Audit Office; to make provision as to the post and duties of accounting officer; and for connected purposes: And the same was read the First time, and ordered to be read a Second time upon Friday 28 January and to be printed. [Bill. 19.]
  SHOPS
  Mr. Raymond Whitney, supported by Mr. J. Grimond, Sir Angus Maude, Sir John Langford-Holt, Mr. Jack Dunnett, Mr. John Horam, Mr. Marcus Fox, Sir Anthony Meyer, Mr. Clement Freud, Mr. Dafydd Wigley, Miss Janet Fookes and Mr. Nicholas Lyell, presented a Bill to amend the law of England and Wales and of Scotland as to the days on which and the times when shops and other places at which a retail trade or business is carried on may be open or used for the serving of customers: And the same was read the First time; and ordered to be read a Second time upon Friday 4 February and to be printed. [Bill 20.]
  DISABLEMENT (PROHIBITION OF UNJUSTIFIABLE DISCRIMINATION)
  Mr. Donald Stewart, supported by Mr. Jack Ashley, Mr. Gordon Wilson, Mr. David. Penhaligon, Mr. Ian Campbell, Mr. Michael Ancram, Mr. Alex Pollock, Mr. Alfred Morris and Mr. Dafydd Wigley, presented a Bill to provide that discrimination of an unjustifiable nature against disabled people shall be illegal; to establish a regulatory commission; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 11 February and to be printed. [Bill. 21.]

  RIGHT OF REPLY IN THE MEDIA
  Mr. Frank Allaun, supported by Sir Derek Walker-Smith, Mr. Arthur Davidson, Sir Nigel Fisher, Mr. Phillip Whitehead, Mr. Patrick Cormack, Mr. Michael Meacher, Mr. Sydney Chapman, Mr. John Tilley, Mr. Alan Haselhurst, Mr. Norman Atkinson, and Mr. W. Benyon, presented a Bill to give members of the public, companies
  270
  and organisations the right to reply to allegations made against them or to misreporting or misrepresentations concerning them in the press, or on radio or television; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 18 February 1983 and to be printed [Bill 22].

  HOUSING (HOUSES IN MULTIPLE OCCUPATION)
  Mr. Jim Marshall, supported by Mr. Frank Dobson, Mr. A. W. Stallard, Mr. Joseph Dean, Mr. Robert Kilroy-Silk, Mr. Andrew F. Bennett, Mr. William Pitt. Mr. Charles Irving, Mr. David Knox, Mr. Alfred Dubs, and Mr. Donald Anderson, presented a Bill to consolidate and amend the powers of local authorities as regards houses occupied by persons who do not form a single household; to define categories of such houses, to empower the Secretary of State to specify standards to apply to such houses; to confer duties on local authorities to enforce standards in such houses; to repeal existing provisions relating to such houses; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 25 February and to be printed [Bill 23].
  COPYRIGHT (AMENDMENT)
  Sir John Eden, supported by Mr. Michael Shersby, Mr. Phillip Whitehead, Mr. Clement Freud, Mr. John Grant, Sir Paul Bryan, Mr. Ivan Lawrence, Mr. Tim Brinton, Mr. Neil Thorne, Mr. K. Harvey Proctor, and Mr. Andrew Faulds, presented a Bill to amend section 21 of the Copyright Act 1956 so as to provide new penalties for offences relating to infringing copies of sound recordings and cinematograph films; and to provide for the issue and execution of search warrants in relation to such offences: And the same was read the First time; and ordered to be read a Second time upon Friday 21 January and to be printed [Bill 24].
  CHARITIES
  Mr. Nicholas Lyell, on behalf of Sir Angus Maude, supported by Dr. Keith Hampson, Mr. Greville Janner, Mr. Stanley Cohen, Sir John Biggs-Davison and Mr. Keith Best, presented a Bill to enable the property of certain small charities to be expended without regard to restrictions distinguishing between capital and income; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 28 January and to be printed [Bill 25].
  LEAD-FREE PETROL
  Mr. William Hamilton, supported by Mr. J. W. Rooker, Mr. Albert McQuarrie, Mrs. Ann Taylor, Mr. Donald Stewart, Miss Joan Lestor, Mr. Stephen Ross, Mr. Norman Hogg, Miss Janet Fookes, Mr. Terry Davis, Mrs. Sheila Faith and Mr. Martin Stevens, presented a Bill to eliminate lead from petrol within a specified period: And the same was read the First time; and ordered to be read a Second time upon Friday 21 January and to be printed [Bill 26].

  TRADE UNION DEMOCRACY
  Mr. John Roper, supported by Mr. Roy Jenkins, Dr. David Owen, Mrs. Shirley Williams, Mr. William Rodgers, Mr. Tom Bradley, Mr. R. C. Mitchell, Mr. Ian

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  Wrigglesworth, Mr. Tom McNally, Mr. Tom Ellis, Mr. John Horam and Mr. Ronald W. Brown, presented a Bill to make provision for election of the principal executive committees and principal officers of trade unions by postal ballots and to amend the Employment Acts 1980 and 1982, and for connected purposes: And the same was read the First time: and ordered to be read a Second time upon Friday 21 January and to be printed [Bill 27].

  MATRIMONIAL PROCEEDINGS
  Mr. Neil Thorne, on behalf of Mr. Martin Stevens, supported by Mr. Leo Abse, Mr. Keith Best, Mr. Sydney Chapman, Mrs. Sheila Faith, Miss Janet Fookes, Mr. Toby Jessel, Miss Joan Lestor, Mr. John Parker, Mr. David Stoddart and Mr. John Wheeler, presented a Bill to make further provision as to the exercise by courts in England and Wales of powers to grant financial relief in matrimonial proceedings; to amend section 15 of the Inheritance (Provision for Family and Dependants) Act 1975; and for connected purposes: And the same was read the First time: and ordered to be read a Second time upon Friday 4 February and to be printed [Bill 28].
  RESALE OF GAS AND ELECTRICITY
  Mr. Donald Anderson, supported by Mr. Alfred Dubs, Mr. John Blackburn, Mr. John Wheeler, Mr. Raymond Powell, Mr. Ian Grist, Mr. Hugh Dykes, Mr. Don Dixon, Mr. A. W. Stallard, Mr. Douglas Hogg, Mr. Jim Marshall and Mr. D. E. Thomas, presented a Bill for restricting the payment required for the resale of gas and electricity supplied by the British Gas Corporation or Area Electricity Boards: And the same was read the First time; and ordered to be read a Second time upon Friday 18 February and to be printed [Bill 29].
  LICENSING (OCCASIONAL PERMISSIONS)
  Mr. David Atkinson, supported by Mr. Graham Bright, Mr. Ronald W. Brown, Mr. Sydney Chapman, Mr. Tony Durant, Mr. Arthur Lewis, Mr. Geoffrey Lofthouse, Mr. John Ryman and Mr. Dafydd Wigley, presented a Bill to empower licensing justices in England and Wales to grant to representatives of organisations not carried on for private gain occasional permission authorising the sale of intoxicating liquor at functions connected with the activities of such organisations: And the same was read the First time: and ordered to be read a Second time upon Friday 11 February and to be printed [Bill 30].

  REPRESENTATION OF THE PEOPLE (UNIVERSITY CONSTITUENCIES)
  Viscount Cranborne, supported by Mr. Harry Greenway, Mr. Julian Amery, Mr. Stephen Hastings, Mr. Mark Lennox-Boyd and Mr. David Atkinson, presented a Bill to provide for the election of Members of the House
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  of Commons by university constituencies in the United Kingdom: And the same was read the First time; and ordered to be read a Second time upon Friday 4 February 1983 and to be printed [Bill 31].

  LEVEL CROSSINGS
  Mr. Albert Roberts, on behalf of Mr. Bernard Conlan, supported by Mr. Walter Johnson, presented a Bill to make further provision about level crossings: And the same was read the First time; and ordered to be read a Second time upon Friday 21 January and to be printed [Bill 32].
  PASSENGER VEHICLES (EXPERIMENTAL AREAS)
  Mr. Richard Luce, supported by Mr. Tim Rathbone, Mr. Patrick McNair-Wilson, Mr. Terence Higgins, Mr. Peter Fry, Mr. Robert Banks, Sir Peter Mills, Mr. Stephen Ross, Mr. Neville Sandelson and Mr. John Corrie, presented a Bill to make further provision in respect of the designation of experimental areas and the granting of authorisations under sections 47 and 48 of the Public Passenger Vehicles Act 1981 and in respect of the use of vehicles in pursuance of such authorisations: And the same was read the First time; and ordered to be read a Second time upon Friday 25 February and to be printed [Bill 33.]
  JURIES (DISQUALIFICATION)
  Mr. Patrick McNair-Wilson, supported by Sir Victor Goodhew, Mr. Richard Luce, Sir David Price, Mr. John Farr and Mr. John Hunt, presented a Bill to make further provision for the disqualification for jury service of persons convicted of criminal offences: And the same was read the First time; and ordered to be read a Second time upon Friday 25 February and to be printed [Bill 34.]
  CHILD CARE (ACCESS)
  Mr. Robert Kilroy-Silk, supported by Mr. Andrew F. Bennett, Mr. Peter Bottomley, Mr. Stan Newens, Mr. Frank Field, Mr. William Pitt, Mr. Jim Marshall, Mrs. Renée Short and Mr. Frank Allaun, presented a Bill to allow parents, guardians and relatives to apply to the court for an order giving them access to their children in local authority care; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 21 January and to be printed [Bill 35.]
  ROAD TRAFFIC (DRIVING LICENCES)
  Mr. Michael McNair-Wilson, supported by Mr. Nick Budgen, Mr. Tony Marlow, Mr. Matthew Parris, Sir John Biggs-Davison and Mr. William Ross, presented a Bill to make provision about the granting, without tests of competence to drive, of driving licences to certain persons who are resident in Great Britain and are or have been authorised to drive under the law in force in places outside Great Britain, and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 21 January and to be printed [Bill 36.]

Steel
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]
3.43 pm
The Minister of State, Department of Industry (Mr. Norman Lamont): As the House well knows, the steel industry throughout the world and in the United Kingdom currently faces appalling difficulties, and extremely difficult decisions are required. The purpose of this debate is to enable the House to express its views before the Government make their decisions on the matter.
I want to cover three aspects: first, the international and market situation as it affects steel; secondly, the European Community regime; thirdly, the position of the British steel industry, particularly the British Steel Corporation. I shall bring the House up to date on the latest developments.
First, I shall deal with the international and market situation. I make no apology for discussing this subject in some detail, because it is extremely important that the House should realise the hostile reality that confronts the industry. It is important to realise that the crisis facing the country is not confined to the United Kingdom. In the United States, the industry has lost 180,000 jobs, and about 40 per cent. of the jobs have gone since 1979. Output in 1982 is expected to be about 38 per cent. below that of 1981. In the EC, production this year is expected to be the lowest for 30 years. Even in Japan, production is expected to be the lowest since 1972.
We face an international problem, and the reasons for it are complicated. It is due in part to the world recession, the worst for 50 years, and in part it is due to the fact that we face technical change and the substitution for steel by other materials such as plastics and ceramics. In the motor car industry, for example, to cut fuel consumption, motor manufacturers throughout the world are seeking to reduce the weight of cars, and that means reducing the amount of steel used. I read in the Financial Times only a few days ago that the share of aluminium in the beverage can market, in the space of only three years, has shot up from about 12 per cent. to 50 per cent. of the market. That has serious implications for the tinplate market.
Moreover, there is the fast growth in capacity of steel making countries. In 1950, 32 countries produced steel. Today, 76 countries produce steel. That both reduces our exports and increases the pressures on us from imports, a subject that I shall return to later.
It would be a mistake to think that the development of capacity has been confined to the developing countries. It has increased considerably in the recent past in the industrialised world, and especially in the 1970s in Europe and the United Kingdom. World-wide capacity in the steel industry is now about 1,000 million tonnes, while world demand this year will fall below 700 million tonnes.
In Europe, there is an installed capacity of 200 million tonnes, and yet production has fallen from 156 million tonnes in 1974 to 128 million tonnes in 1980, and the current forecast is that by 1985 it will be only 121 million tonnes. It is important for us all to face the implications of that situation. We cannot isolate ourselves from those trends or avoid their consequences, however distasteful or alarming we find them. We cannot simply spend large
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sums of money on increasing or maintaining capacity in the hope that what is now a world glut will mysteriously change in a few years to world shortage.
I shall say a word now about the European Community steel policy and the action that is being taken there.
Mr. Dennis Skinner: Before the Minister leaves that argument, saying that the situation is due mainly to world recession, will he bear in mind that one of the reasons why the steel industry has lost much of its demand in this country is the 30,000 company failures and liquidations that have occurred in this country since his Government came to office? If the Minister wants to help the steel industry, he should look at its interdependence on all the other industries that it supplies. Will he therefore give a guarantee that there will be no further pit closures, because pits use a lot of steel? That would be good news for the pits, good news for jobs, and good news for the steel industry.
Mr. Lamont: I cannot comment on pit closures, and nor should the hon. Gentleman expect me to. I am not seeking to put the blame on the world recession. If the hon. Gentleman had listened to me, he would have realised that my remarks were not simply about the world recession but about structural changes, with which all hon. Members should come to grips.
Faced with the vast over capacity of steel, to which I have just referred, and with prices being driven down to uneconomic levels, the Community has introduced mandatory production quotas and action for phased price increases since 1980.
If anybody had told me a few years ago that, as a Minister in a Conservative Government, I should have to preside over a cartel arrangement, I would not have believed him and I certainly would not have been flattered. I cannot pretend that I find the arrangement comfortable. However, I must tell the House that these short-term measures have given the industry a breathing space—an interval in which steel makers and Governments in Europe can tackle the problems of over capacity. In the long-term the policy will make sense only if that problem is solved.
In the short-term, the measures have had the strong support of the British steel industry. Severe as the problems that we face are, without these measures they would have been undoubtedly worse. That is why we have had the industry's backing. Until the spring of this year those arrangements helped to bring some much needed stability to the market. However, in March and April the steel market was hit by the deepening recession and the regime in Europe began to be increasingly less effective.
The Government have been to the fore in pressing for further action. My right hon. Friend the Secretary of State told the House on 22 November how the informal meeting of Community Ministers in Elsinore had laid the foundations for a whole series of measures to tighten up the quota and price rules. These include the improved policing of the Community's price rules, the stopping of investment aid or national Government aid to companies which infringe the pricing provisions, and provisions to prevent companies delaying the payment of fines by appealing to the European court. Hon. Members have expressed some scepticism about those measures, but I emphasise that when agreement has been reached it is intended that they will be implemented with effect from 1 January.

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In addition, from the end of this year, in common with other member States, the British Government will take over responsibility for policing the rules on pricing practices by steel stockholders and dealers in Britain. Legislation giving the Government power to enforce the rules came into operation today. I have today answered a written question setting out the detailed rules that will apply to the stockholders. This is a measure of some significance because 40 per cent. of all United Kingdom deliveries go through steel stockholders.
The short-term measures will not solve the crisis overnight.
Sir Peter Emery: Many people have described the mandatory production targets as the mandatory reduction of production targets. Will my hon. Friend assure the House that the British steel industry's capacity, compared with that in the European steel industry, particularly in Belgium and Italy, will not be further reduced at the expense of our industry simply to protect Italy or Belgium?
Mr. Lamont: I can give my hon. Friend the assurance that he is seeking. I shall deal with that aspect in a few minutes because I know that it is of great concern to hon. Members.
The short-term measures cannot solve the problem by themselves and they are no substitution for restructuring. However, in the short-term they will help to restore discipline to the market and solve another problem of great concern to hon. Members—the level of steel imports into Britain.
I understand and share the anxiety about imports. However, in deciding what action needs to be taken we must deal in facts and not with some of the myths that have been widespread. Even with the recent rise in imports from all sources, they still account for under 27 per cent. of the United Kingdom's steel market this year. In France the figure is 43 per cent. and in Germany imports take 35 per cent. of the market. Britain has a lower proportion of its market taken by imports than other European countries.
Our problem is not so much imports as exports. We import much less than France or Germany, but we also export much less. That is why we have an adverse balance of trade in steel with those countries.
Mr. Roger Moate: Does my hon. Friend agree that those averages can be misleading? In some specific areas imports have risen dramatically. For example, if my hon. Friend looks at the figures in recent months for reinforcing bar imports, he will see that they have risen from a fairly low percentage to over half the United Kingdom's production. There is a need for urgent action there. Many companies cannot simply wait to see whether Continental producers will respond to the mandatory quotas. If my hon. Friend has found it possible to swallow cartelistic production quotas, would it not be possible for him and other EEC Ministers to swallow voluntary import quotas between member States?
Mr. Lamont: My hon. Friend must not expect me to swallow too much at one go. What he says is right. The figures I have quoted are for steel imports as a whole. There are areas in which import penetration is much greater than the figures that I have quoted. However, that
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is not nècessarily evidence that other people are cheating by infringing the rules. Nevertheless, I agree with my hon. Friend's point about the need to see that production quotas are rigorously enforced. That is the best way to deal with those areas where penetration of imports is above average.
Mr. Stanley Orme rose—
Mr. Lamont: I shall give way to the right hon. Gentleman, although I have given way three times already.
Mr. Orme: The Minister is drawing a red herring across European imports. Historically, their situation is entirely different from ours. The tremendous increase in imports in the United Kingdom has no comparison in France and Germany.
Mr. Lamont: The chairman of BSC, Mr. MacGregor, outght to know, and he said recently:
"Imports are an exaggerated factor. By far the biggest problem is the decline in world demand and the collapse in the market."
Let me deal with the right hon. Gentleman's point. I shall deal first with imports from outside the EEC and then move to imports from within the EEC.
Imports from countries outside the EEC have taken 8.8 per cent. of the United Kingdom market this year. That is little higher than the level of recent years. I emphasise that to shut those out would only invite retaliation. We should not forget that in many of the Third world markets we are net steel exporters. We could end up by being the net loser. We have the advantage of the Community's voluntary restraint arrangements, which, in the Government's opinion, are working reasonably well. Where they do not, firm action has been taken. Anti-dumping duties have been imposed on steel imports from Spain and Brazil. Quotas have been set up against steel imports from Czechoslovakia and Bulgaria. Last month anti-dumping investigations were opened against imports of coil from Brazil, Canada, Argentina and Venezuela.
For the future, the Community has recently agreed measures that will tighten the voluntary restraint agreements in 1983. The aim is to reduce the amount that is imported into the Community to 12½ per cent. below the 1980 level. That tightening of the voluntary agreements should have a considerable impact.
EEC imports account for 17·7 per cent. of the United Kingdom market. Last year they accounted for 17·;6 per cent. It was 12 to 14 per cent. before 1980, which was the year of the strike. The strike cost BSC a considerable loss in market share and led many customers to double source from Europe. Since the strike, we have lost a significant slice of the market to imports from Europe.
Apart from becoming more competitive, the solution to the problem is to restore price stability and to ensure that the price and quota rules are observed throughout the Community. That is why the steps that I have described are being taken. I re-emphasise that these measures cannot be a substitute for fundamental restructuring to bring supply into line with demand. The Community's steel aid decision is essential to achieve the necessary capacity cuts and the gradual phasing out of the plethora of State subsidies to the steel industies of Europe.
The United Kingdom has made a considerable contribution to reductions in capacity in Europe. We look now to our partners to bear comparable cuts in capacity to those that we have made. I assure the House that any

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further cuts in capacity in the United Kingdom will come only from an analysis of our own position and only if we judge them to be necessary. No further cuts in capacity will come at the behest of the European Commission or of any other member State.
I talked about the need to distinguish facts from myths when talking about imports. It is also important to be clear when comparing cuts in capacity in the United Kingdom with those made by other member States. It may seem that the United Kingdom has made all the sacrifices since 1979 while others have done nothing. However, the picture looks different if we measure it from 1974. From that date the percentage fall in United Kingdom production is similar to that in the Community as a whole. France, West Germany, Belgium, Luxembourg and ourselves have all sustained losses of about a half in this period. In France and West Germany it has fallen by slightly less than in the United Kingdom, but in Belgium and Luxembourg it has fallen by slightly more.
Mr. Stan Crowther rose—
Mr. Lamont: Labour Members prefer not to make the comparison from 1974. They like to imagine that the problem arose only in 1979. The tragedy is the way in which the Labour Administration, between 1974 and 1979, under the Beswick review, delayed closures that were inevitable and necessary. When the closures came after 1979 they were greater and more severe than they need have been if the Labour Administration had had the guts to act when they had responsibility.
Mr. Crowther rose—
Mr. Lamont: There is one other fact about closures which needs to be made clear. Closures in the United Kingdom since 1979 have arisen not because of the Community but because of a lack of competitiveness. For example, in 1979 the United Kingdom had a work force that was 20,000 greater than in France but it produced significantly less. Again in 1979, West Germany had a work force about 50 per cent. greater than ours and it managed to produce well over twice as much steel as we did. These figures drive home the point that the previous Administration's failure to act led to overmanning and a lack of competitiveness which did grave damage to the steel industry and the prospects of those who worked in it.
Mr. Crowther rose—
Dr. Jeremy Bray: The Minister of State has referred to competitiveness—
Mr. Crowther rose—
Mr. Speaker: Order. I think that there has been a misunderstanding.
Mr. Crowther: May I seek your guidance, Mr. Speaker? I should like to know to which Labour Member the Minister intended to give way.
Mr. Speaker: I, too, am in a state of uncertainty. I also seek guidance.
Mr. Lamont: I give way to the hon. Member for Rotherham (Mr. Crowther).
Mr. Crowther: Does the Minister agree that since 1974 the British steel industry has shed more manpower than the steel industries of France, West Germany and Italy put together? Does he dispute that?
Mr. Lamont: Not since 1974, no. I was talking about the reduction in capacity since 1979. The reduction in capacity since 1974 has been much in line with that in other member States. Since 1979 the reduction in labour has been greater in the United Kingdom than elsewhere for the reasons that I have outlined.
Dr. Bray: The Minister referred to competitiveness. A component that he has not mentioned is the exchange rate. I have received from the senior management of BSC a copy of the corporation's economic and industrial outlook and its current assumptions on closures and redundancies. I refer to a document which I understand the Scottish Office has not yet received. It assumes that
"There will be no significant change in the level of sterling",
that
"Imports of steel will continue to take an increased share of domestic demand",
and that there will be
"increased import penetration in vehicles".
It contains a catalogue of grossly pessimistic assumptions. These are the assumptions that BSC is now using for the closures that the Government have left to its discretion. Will the Government allow BSC to continue to make these assumptions and will these assumptions be applied to the big five?
Mr. Lamont: I shall deal with the BSC review and the considerations that are being taken into account. I do not know to which document the hon. Gentleman is referring, but the BSC's projections for steel demand and for the future development of the economy are not markedly different from those made by other forecasters, and not very different in terms of steel demand from those made by the Iron and Steel Trades Confederation and the TUC. The hon. Gentleman wishes to make them entirely different assumptions, but they are not forecasts that are wildly different from those made by many other commentators.
There is one other—
Dr. Bray rose—
Mr. Lamont:—myth on which comment is necessary. It is that the United Kingdom will be better off settling its own problems outside the European straitjacket.
Dr. Bray rose—
Mr. Lamont: It is perpetuated by those who have not learnt the lesson arising from the recent dispute with the United States over steel imports. The legal actions by United States steel makers put £50 million of United Kingdom exports at immediate risk and could have affected at least as much again. Worse still, partial closure of the United States market would have left even more spare steel washing around in Europe and world markets. This would have put even more pressure on price and market stability in the Community. It was the Community's combined strength which enabled us to secure a deal which, beyond any doubt, was far better for our steel industry and for United Kingdom jobs than anything we could conceivably have obtained by acting alone.
The private sector faces very much the same problems as those faced by the British Steel Corporation. For that reason, the measures that we have taken and the measures that we are taking at a European level have its support because they stand to help it too. We are pressing for

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alterations to that regime which, we hope, will be of specific help to it if they are achieved. We want to see the regime extended to special steels and we have pressed hard for that. We have received a constructive response from the Commission.
As part of the answer to the overall problem of excess capacity and the need to eliminate it, we have been encouraging the steel corporation, in conjunction with the private sector, to form 50-50 companies—the so-called Phoenix companies. We have made some progress in that respect and we hope to make more.
Because of our concern for the private sector, we have increased the amount of money that was originally allocated to the private sector steel scheme from £22 million to more than £34 million. I hope to be able to make some announcements to the House soon about aid to different sectors within the private sector and also some announcements about Government support for self-help levy schemes within the private sector.
The tragedy of the deterioration of the position within the British Steel Corporation is that it comes after a period of real improvement. I have already defended the demanning which has occurred at BSC, because it was necessary. That demanning was beginning to bear its fruit. The targets set for 1981–82, which were described at the time by Mr. MacGregor as optimistic, were by and large met. There were improvements in market share, in export sales, efficiency, costs and productivity. Despite the uncertainties on the horizon, the results for the first few months of this year were encouraging and showed that further progress was possible.
The British Steel Corporation's half-yearly results are being announced today and they spell out all too clearly the deterioration in the corporation's position. Losses after interest for this half year amount to £154 million, which is better than the £208 million loss last year but is way off the target before interest of break-even for 1982–83, which for this year is obviously no longer an attainable target.
Neither the Government nor the corporation can tolerate this haemorrhage and loss-making on this scale. Urgent cost-saving measures are being taken by the corporation to stem the losses. Further slimming is taking place and, as the House and hon. Members have learnt, there have been closures of some smaller plants. Those decisions are within the responsibility of the management of BSC and do not require the Government's authorisation.
However, the Government, together with the corporation, are undertaking a review of the British Steel Corporation's five major steel making works. I emphasise that no decisions have been made. Obviously we are taking into account—I know that this is a matter of concern to the hon. Member for Motherwell and Wishaw (Dr. Bray)—matters such as costs, competitiveness, trends in the market, trend in the steel-making industries and implications for other industries. We are examining the matter not on the basis of short-term factors but on the basis of longer-term trends.
Mr. Barry Jones: When the Minister examines the future of individual works, will he take into account the enormous social consequences of major
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closures? Will he examine, for example, the impact of closure on North-East Wales and take that into account in any decisions he may make?
Mr. Lamont: We shall be examining the impact on regional economies.
The House should also know that the corporation is currently producing steel at the rate of 10 million tonnes of liquid steel a year, which compares with a total plant capacity of about 21 million tonnes. There is obviously a large margin of spare capacity. I must also tell the House the chilling fact that it requires 1½ to 2 per cent. growth in industrial production merely for steel production to remain constant. That is the effect of the structural change that we have seen.
Mr. A. E. P. Duffy rose—
Mr. Lamont: The Leader of the Opposition has committed the Labour Party to maintaining a BSC capacity of up to 25 million tonnes. That would be a charge of the economic light brigade. It would be dazzling, admirable in its way, wonderful to watch but doomed to disaster.
Mr. Duffy rose—
Mr. Lamont: If anybody should know that, it should be the right hon. Member for Ebbw Vale (Mr. Foot), who has had to explain certain economic realities to his constituents.
I conclude by assuring the House—
Mr. Duffy rose—
Mr. Lamont: —that the Government will take great care over these decisions which affect a major industry and many others. It is indeed disappointing that after all the—
Mr. Duffy rose—
Mr. Lamont: —sacrifices, after all the adjustment—
Mr. Duffy rose—
Mr. Lamont: I shall not give way.
It is, indeed, disappointing that after all the sacrifices, after all the adjustment, and after all the demanning and pain, BSC should still face enormous problems, but the fact that that is disappointing is no reason for us not to face up to the realities. They will face us with their unpleasant consequences whether we like it or not. The fact that it is disappointing is no reason for us to be any less determined to tackle the problems. Viability was the target for BSC, viability must remain the target for BSC, and I believe it is still attainable.
4.15 pm
Mr. Stanley Orme: The Minister has not brought much hope to the steel industry and the British economy this afternoon.
The debate is taking place against the background of a crisis in the steel industry. We are concerned not only with the big five but with what is happening around us daily in the steel centres of the United Kingdom. What the Minister said about our competitors and world recession does not explain why the British economy is in a worse condition than that of any of our competitors. The Government must answer that point.
It is not a pleasant task, but I wish to spell out the major redundancies that have taken place, not over the past three

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years, but over the past few months up to and including this week. The figures are as follows: on 12 August, at Tipton, Ravenscraig and Hartlepool, 1,122; on 1 November at Sheffield, 1,100; on 4 November at Corby, 600; on 18 November at Round Oak, Dudley, 1,286; on 19 November at Craigneuk in Scotland, 427; on 30 November. only this week, at Sheffield, 1,709. Are those the small plants to which the Minister referred? I am talking about thousands of jobs. The total this month is 5,222.
Mr. Duffy: Half of those were in Sheffield.
Mr. Orme: The city of Sheffield is being decimated by what is happening. The people of Sheffield have a right to be worried about what is happening and to make their views known. In recent years Sheffield alone has lost about 20,000 jobs in the private and public sectors.
Mr. Duffy: Under the present Government.
Mr. Orme: Rotherham has lost 794 jobs, Stockbridge and Tinsley Park have lost 815 jobs, and 100 jobs have been lost from the central services. That is the scale of the problem.
I was going to say something about the big five, but, if we are not careful, because of the reductions that are taking place—we had the forecast of a previous chairman of the British Steel Corporation—the British steel industry, if it is not helped, will no longer be viable and will cease to exist. The Government have been too complacent on this issue.
The problem stems from the lack of demand in the economy because of the monetarist policies being pursued by the Government and because of imports. My hon. Friend the Member for Bolsover (Mr. Skinner) referred to the lack of demand and to the need for growth in our economy. The Minister gave the figures for what is needed to stand still, but his Government are responsible for the fact that we are not even meeting the 1·5 per cent. growth rate.
From June 1981 to June 1982 there was an increase of one-third in total import tonnage. There was a doubling of the tonnage from non-EC countries. People often think that non-EC countries are necessarily Third world countries, but that is not so. I draw attention to countries such as Sweden, Bulgaria, Rumania, Canada, Japan, South Korea and South Africa. We do not export 1 tonne of steel to South Africa, yet steel flows into Britain from that country.
Imports flood in from the countries that I have listed, but most imports come from the EC. The EC provides 2 out of every 3 tonnes of steel imported into the United Kingdom. The Minister talks about myths. The figures that I have given for imports are not myths. They reflect what is happening to the steel industry. The Minister says that imports account for 27 per cent., of British steel consumption, but the trade unions think that the figure is 35 or 36 per cent. Whether the figure is 27 per cent. or 36 per cent., it is still far too high.
The United States of America put up a tariff barrier against the whole of Europe because it was exporting about 3 to 4 per cent. of American consumption. What a comparison! Because of the serious situation we make no apology for calling for an across-the-board freeze on imports while urgent negotiations are held to arrange new controls. We have a right—certainly under article 19 of
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GATT—to protect ourselves from third countries and to say to our EC partners "Enough is enough." They have exploited the situation.
Let us compare the number of jobs lost in the United Kingdom with the number lost in the EC in the past three or four years. As the Minister acknowledged, we have lost more than 100,000 jobs. Germany has lost 33,000 jobs, France 53,000 and Belgium 11,000 while Italy has lost only 200 jobs. We are at the top of the league. The Secretary of State came back from Elsinore and said that he had told those Ministers that we would not take an unfair share of any future cuts. He had been back in the country for only a few hours when the EC said that in any future cuts Britain would have to carry its full share. We are talking about reducing steel production within the EC by 50 million tonnes by 1985 from the present level of 170 million tonnes. That is a reduction of nearly one third. We might as well close every steel plant in Britain if we are to bear that proportion of the cuts.
The percentage rate of change for manpower reductions in 1981–82 is interesting. The rate for the United Kingdom is minus 14·1 per cent.; for West Germany, minus 5·1 per cent.; for France, minus 2·8 per cent. and Italy stands at minus 2·6 per cent. Indeed, Italy has increased its steel production while other countries have been making cuts. Our industry is being ravaged.
Sir Anthony Meyer: The right hon. Gentleman is going on about the sacrifices made in terms of jobs, and of course we all deplore that, but is he aware that the two South Wales producers have shed thousands of jobs to make themselves competitive? They are now competitive. When they were fully manned, they were not at all competitive.
Mr. Orme: The Government will receive proposals from the BSC that could forecast the closure of one or two of the five existing plants. If the number of our plants is reduced to three, we shall have nothing left with which to be competitive. We shall be dependent upon imports.
The Secretary of State told the House that he and the Government would be responsible for any major closures. I have already referred to Sheffield, Rotherham and other areas. Messages of concern have flooded in today from Sheffield. However, what about the thousands of steel workers at Ravenscraig, Scunthorpe, Port Talbot, Llanwern and Teesside? Families and whole communities are awaiting the Government's decision. If we take them the message that the Minister has given us this afternoon, it will not give them any hope.
This debate is taking place before any Government decision. In a sense, the Government are a listening post. I hope that some Conservative Members will have the courage to press home the point that we cannot afford to allow any of those plants to close. I know that my hon. Friends will stress that. We are not picking out one plant. We are not picking out Ravenscraig, as opposed to Llanwern, Teesside or Scunthorpe. In the interests of the British economy, we must maintain a viable steel industry.
Last Friday I went to Scunthorpe on a visit arranged long before the debate was scheduled. I went there to visit a BSC plant and to talk tip both the management and the trade unions. I found a highly efficient firm, with high productivity and high quality steel, fighting to obtain orders from overseas. In the last three years the work force has been reduced from 20,000 to 8,000. The trade unions

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and the management did not juxtapose their area to any other area, but merely said that a community such as Scunthorpe would be devasted if the plant closed. The same is true of any other area, whether it is in Scotland, Wales or on Teesside.
I talked to local authority people and found that they had great pride in the industry. There is pride in the steel industry and the people want to maintain it. They are not considering the problem from a purely selfish point of view. One of the men there asked me what would happen when the upturn came. He asked where steel would be found for defence and for the shipbuilding, engineering and construction industries. Such factors must be taken into account.
Mr. MacGregor told us that the bottom line was 14·4 million tonnes. On Monday the Secretary of State gave us a figure—which the Minister has reiterated—of 10 million tonnes for production this year. If the figure falls below 10 million tonnes, the industry will no longer be viable. The Minister could have all his productivity and competitiveness, but a shrinking industry such as that would be unable to stand up to international competition. That is the reality.
The Minister challenged the Opposition because at the Labour Party conference my right hon. Friend the Leader of the Opposition talked about output of 20 million to 25 million tonnes. I remind the House that only a few years ago there was an argument in the House about whether the figure should be 38 million or 35 million tonnes. If we were to do away with imports and achieve growth in our economy, we would soon need 20 million tonnes. Consequently, that must be taken into account.
My hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) referred the Minister to a letter that he had received from British Steel. I, too, have received that letter. The Government should publish the assumptions and their reply to the letter. Those assumptions are based on factors that cannot be allowed to stand. No doubt my hon. Friend will pursue the matter further and will mention the exchange rate in particular, because this is important.
Mr. Norman Lamont: The right hon. Gentleman said that it was only a question of getting some growth back into the economy. As he has acknowledged, BSC is producing 10 million liquid tonnes of steel a year. There is capacity for 21 million tonnes. Will the right hon. Gentleman do some sums in his head? What rate of growth would there have to be in the next five years to bring us near to capacity?
Mr. Orme: If the electorate will give us the opportunity to implement our policies, we shall turn round the assumption on growth. The Minister should not chastise us about growth. Who has destroyed it? What about the lack of demand? When one goes round steel communities one begins to feel the pressure there and to realise what they are looking forward to in hope, but sometimes with little hope.
Mr. Norman Lamont: The right hon. Gentleman takes an optimistic view of what would happen under a Labour Government. Is he suggesting that steel production could be doubled in the lifetime of a Labour Government?
Mr. Orme: I am not giving any figures. I am saying that we would not contemplate the closure of any of the
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big five. We would do everything to protect jobs. With the growth of investment in the areas that need it—Mr. MacGregor has called for investment in the railways and other areas, and so has the CBI—there would be a reversal of the present situation and jobs would be protected.
Mr. Bill Homewood: The Minister is saying that we cannot rectify within five years the damage that he has managed to do in three and a half years. It is as simple as that.
Mr. Orme: Much recovery will be needed to repair the damage that has been done in the past three and a half years. That is one of the difficulties.
Mr. Duffy: My right hon. Friend knows the Sheffield scene. Will he confirm that the biggest single factor in the savage jobs cuts that were announced on Monday, which the Minister was determined to avoid mentioning, import penetration apart, is a lack of demand for engineering steels and car production? In other words, the cuts are directly attributable to Government policy.
Mr. Orme: Yes. I put it to the Minister and the Government that we do not back down in any way from our argument about demand. We are in favour of expansion of demand. We have spelt out the areas where that demand should come from. Through that demand we would create the jobs that are needed. It is evident to everyone that monetarism has failed miserably in our society.
On behalf of the Opposition I say that we come to the debate in a sad mood, because we are dealing with communities and the effect on them of any further large-scale redundancies. The figure of 3½ million unemployed is too high already. We should not add skilled people to it. Therefore, we demand action on imports both from the EC and third countries. We call for a reversal of the disastrous Government policies, so that demand is created in the economy. We call for the raising of the cash limits to prevent any further closures.
When the Secretary of State makes his statement, we shall demand a full-scale debate in the House. We shall want to put our case and examine carefully any Government proposals. The Government should take away pessimism and defend one of the basic industries of the United Kingdom. It is no good the Secretary saying that he hopes that this or that will happen. We call, even if belatedly—we know that there is little chance of the Government carrying it out—for action. We call for the defence of one of our basic industries. If the Government are not prepared to defend it, they should make way for someone who will.
4.36 pm
Mr. Edward du Cann: My reason for wishing to take part in the debate is that I share completely the anxiety expressed by the right hon. Member for Salford, West (Mr. Orme). I suspect that every hon. Member in the Chamber does; and every inhabitant of our country should. His facts were right. Leaving aside the party political points that he naturally felt obliged to make, I believe that his call for action is justified.
I have two interests to declare. I have declared both to the House on other occasions. I am chairman of a company producing engineering steels in Sheffield, and proud to be. Second, having had some experience of the industry, I am entirely clear that those who work in it are some of

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Britain's most skilled and competent sons. A healthy, prosperous industry is vital to our nation. This is my second interest, to help to bring that about.
Alas, as the right hon. Gentleman said, the industry is now in severe crisis. I say plainly that I abominate what is happening in the steel industry at present. Competent as my hon. Friend the Minister's speech was, I hope that he will recognise that we shall need to give the most careful and serious thought to what action can be taken.
I wish to say a word about how my friends in the steel industry see the situation. The industrial and economic environment within which the steel industry at present has to operate, if it continues, may eventually lead to its total demise. That is the risk. The hostility of that environment—"hostile" is the word that my hon. Friend used when he opened the debate—is such that only the British Steel Corporation, if it retains unlimited access to the public purse, is likely to survive. That point was borne out by the depressing figures for BSC's half-yearly results that my hon. Friend was good enough to quote to the House.
In the last quarter of 1981 and the first quarter of this year reasonable levels of steel making activity were achieved. Trading profits were earned in the private sector. It appeared that the industry was pulling out of the deep problems that followed the BSC steel strike in 1980 and led to the beginning of the phoenix II talks, which eventually aborted. Unfortunately, that was a false dawn. Today trading is just as bad as, if not worse than, it was in 1980–81. There has been an alarming fall-off in orders, and steel production is now running at less than 60 per cent. of current capacity levels. There is no sign of improvement.
In parallel with that, there has been, as the speeches and interventions so far have made clear, a flood of foreign steel into Britain. "A flood" is right. What is worse, the trend is up. It is true that we must make our industry more competitive. The whole House acknowledges that, but now enormous sacrifices have been made in Britain—our country—in terms of both capacity and employment, apparently for the benefit of the French, the Germans, the Brazilians, the Spanish, the Comecon countries and anyone else with Government subsidies, weak currencies and the wit to protect their home base from imports of foreign-finished and semi-finished goods.
My company is one of the survivors in the private sector. It is set in what is now—Opposition Members know this better than I can describe it—the industrial wasteland of Sheffield. That city once produced 90 per cent. of all British steel and 50 per cent. of all Western European steel. We have cut the company's production capacity by 60 per cent. and its labour force by 70 per cent. during the past two years in a bid to come to terms with the diminishing market. Elsewhere, Duport, Round Oak and London Works have all closed and Manchester Steel has been to the brink. All of that, it seems, is to no avail. Wherever the count begins and whatever base year for statistics is quoted, sacrifices on that scale are not evident in Europe. Belgium, Luxembourg, Germany and especially Italy are content to fund their industry publicly, make minimum contributions to capacity cuts and, through a variety of underhand methods, sell their surplus steel to the United Kingdom.
As my hon. Friend the Minister said, by 1985 there will be 50 million tonnes of surplus steel capacity in the EEC. I want to say as clearly as I can to him, with an
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understanding of all the heavy responsibilities that he bears, that the Government must ensure that any further capacity cuts are made in Continental Europe, not here.
I shall now speak about countries outside the EC. We may not mean to have, but we always seem to my friends in the steel industry to have, a laissez-faire attitude towards countries outside the EC—always a bit late and sluggish. The steel and other markets of Japan and South Korea are practically closed to our exports. Comecon countries buy only those steel qualities thay they cannot make. The attitude that was recently taken by the United States—once an important market—needs no further comment. Spain has built an effective barrier of customs duties and administrative obstacles. Licensing systems in Brazil and Southern Africa utterly protect their home industries. Not only do those countries sell their surplus steel to the diminishing United Kingdom market; they destabilise the price structure that Davignon has tried to build up in the past few years. Price cutting, therefore, is now rampant throughout Europe.
There is only one conclusion. It is obvious and it must be faced. Government must, sooner or later—I beg that it is sooner—take a tough and uncompromising line with those countries which trade unfairly, resolve their socio-economic difficulties at the expense of the United Kingdom and have effectively transferred their problems to us. More than 3 million British unemployed are testimony to the need to adopt a resolute stand sooner rather than later.
I am glad that there will be no Division tonight. The House is right to unite on the matter. I am not a protectionist, but I must make it absolutely clear that I believe I was not elected to see the British work force sacrificed as a matter of practice on the altar of the theoretical benefits of laissez-faire free trade. When free trade is unfair trade, there are no benefits in it.
Ironically, nowhere has the gross unfairness of State support been more evident than in the United Kingdom. The reality is that the public sector has been bankrupt for years. It has survived by massive injections of cash. If BSC was a complete monopoly, that would be bad enough, but there are large and important areas of overlap with the private sector where the two compete for business. As a result, modern and efficient private capacity has had to close.
Since the Government that I so strongly support came to power, BSC has received more than £2·7 billion in cash. That represents a subsidy of more than £88 per tonne of steel that is sold. Of that, £43 has funded BSC's losses. I could give a series of additional figures, but I shall not trouble the House with them. I hope that I have said enough to bring me logically to the questions that I should like to ask.
How can the private sector compete with those subsidies? How do those subsidies square with the Government's declared policy of encouraging a healthy private steel industry? I say that they do not and that it is time that the subsidies stopped.
Mr. Barry Jones: Is the right hon. Gentleman aware that, of the motor cars that were sold in Britain last year, 53 per cent. were foreign? Does he agree that the amount of steel which came into Britain in those motor cars was equivalent to the annual production of one of our strip mills?
Mr. du Cann: I shall come to the hon. Gentleman's point in a moment.
The point that I am anxious to make now is that the competition from BSC which private sector companies must face in the United Kingdom market is wholly unfair. There is little evidence to suggest that the massive capital investment in BSC is making it any more viable. I wish that the reverse were true. Its current capacity utilisation is probably less than that in the private sector if the circumstances in Sheffield, where modern and expensive plant is grossly under-utilised, are anything to go by.
In these circumstances, the Government have three policy choices. First, BSC can be funded further, beyond the limits that have already been agreed by the House. I say to my hon. Friend with the greatest emphasis that I should oppose such a move if the Government proposed it at any time. The second choice is for the Government to give equal support to the private sector. My hon. Friend had something to say about that. It was a little Delphic, but no doubt more detail will emerge later. That policy also has little to recommend it.
The third choice is to make BSC henceforward live within its means, as the private sector must do. If I may coin a phrase, there is no reasonable alternative. Moreover, where BSC overlaps with the private sector it should get out of the market if it cannot make a go of it except with enormous subventions from the taxpayer.
Mr. D. N. Campbell-Savours: Does the right hon. Gentleman agree that much of our argument with the Americans recently was that we were not subsidising steel at all? Does he agree that he has undermined our case? The money that was transferred to British Steel was for restructuring and other purposes that the Government outlined in their statement about the argument with the United States Government.
Mr. du Cann: I am grateful for the implied flattery of the hon. Gentleman's intervention. I can hardly believe that anything I say will make any difference to the normally selfish attitude of the United States Department of Commerce.
I shall now deal with the situation of our customers, as the hon. Member for Flint, East (Mr. Jones) asked me to do. The decline of our engineering base is well documented. We all know that the process has been under way for many years. In an already weakened market, as the hon. Member for Flint, East said, the fall in vehicle production this year is especially worrying. Cars are being produced at about 65 per cent. of the level obtaining in late 1981 and ealy 1982. Moreover, commercial vehicle production stagnates at about 60 per cent. of the 1979 level. The drop forging industry, another good barometer of traditional manufacturing, has virtually halved its activity level in the last decade, and deliveries of engineering steels into the United Kingdom market are now about two-thirds of the level of 12 months ago.
Imports have also ravaged the home market for those finished and semi-finished metal products which were the foundation of the steel industry, and many of the imports derive from countries such as Spain and Japan where tariffs and administration obstacles effectively block out British goods. This further unfair trading can be stopped. It must be stopped. It is idiotic, if not criminal, to place ourselves and our people at such a disadvantage.
I want to see a programme for national economic recovery led by investment in substantial capital projects.
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There is plenty of scope for that. No one in the steel industry, particularly in the private sector, can look forward with any confidence unless there is a fundamental shift in attitudes.
Certainly, in the private sector, we are looking not for State interference but for Government to ensure that damaging influences outside individual company control are dealt with quickly and effectively. Those influences now combine to produce such a hostile environment that it may be that only a subsidised BSC will survive and, contrary to Government intention, the private sector will disappear. That will be unacceptable to me and to my colleagues on the Conservative Benches.
4.52 pm
Mr. William Rodgers: The right hon. Member for Taunton (Mr. du Cann) was as fascinating as usual in his arguments, although his remarks were not short of contradictions. I agree with him that there is widespread anxiety about the steel industry and that it is in danger of total demise.
We are having this debate because the steel industry is facing catastrophe. We are asking ourselves why and seeking to find our way through a complex of causes. In that respect, I agree with the Minister that it is not sufficient simply to blame the Government. This problem has a long history. Successive Governments have made errors and have over-estimated capacity requirements. Successive boards have also made errors. The Minister was right to draw attention to the dimension of the world economy. We cannot escape it, although that alone is not responsible.
Until two years ago there were low levels of productivity in the steel industry, and we cannot deny that the 1980 strike had damaging consequences. We should, therefore, put the problems of the steel industry in their full context and not look for scapegoats. But the industry is at present the responsibility of this Government, and this Government alone can do something to stave off a dangerous situation which is getting worse all the time.
The central dilemma is that over a period we cannot continue to make steel that no one wants or no one can afford to buy. That should be obvious, but it must be restated. On the other hand, we cannot abandon to virtual extinction a basic industry that must be able to respond to the upturn in the economy, whatever form it takes and whenever it occurs. It must also make a substantial contribution to the United Kingdom's export performance.
I noted what the right hon. Member for Taunton said about the private sector. Although we are mainly debating the BSC, we must all be concerned with both the public and private sectors. In that respect, the question of ownership is irrelevant.
Like many other hon. Members, I have a direct constituency interest in steel. The right hon. Member for Salford, West (Mr. Orme) rightly listed the closures that have taken place recently, but he omitted to mention the closures in my own constituency of Stockton-on-Tees. The decline locally in the tube sector of steel—from more than 2,000 jobs 10 years ago to a few hundred today—has been so much taken for granted that it is no longer a subject for public discussion. That decline from many thousands of employees to a few hundred mirrors a decline of more than 10,000 jobs in heavy engineering in my constituency over the last 10 years. I emphasise "the last 10 years", because

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the decline of the United Kingdom heavy engineering industry has contributed sharply to the long-term problems of the steel industry.
Today, the steel industry in my own area is focused mainly on the steel-making capacity of Redcar. That is a source of employment throughout Cleveland, including my own constituency. There is deep anxiety about the plant's future, and there would be a disaster if it were to close. There are many parts of my constituency, of Cleveland and of the North-East as a whole, where male unemployment is now above 40 per cent. Were the Redcar steel-making capacity to close, that figure would rise even further.
The plain, simple and incontrovertible facts about Redcar are that the number employed has fallen from just over 15,000 at the beginning of 1981 to just over 9,000 today, that in a short time productivity has virtually doubled, and that in February of this year used capacity totalled almost 85 per cent. I believe that Redcar could break even and could perhaps operate at 70 to 75 per cent. capacity by March 1984, while still employing about 7,500 men. I hope that when their review is complete the Government will instruct the board to set such a target and that they will meanwhile guarantee security to Redcar.
There is a strong case for a national moratorium on closures for 18 months, with no major redundancies meanwhile. I accept the fact—we should face this—that the cost could be as high as £800 million in a full year, but it may well be worth the risk of spending that sort of sum to make sure that capacity is not closed within the next 18 months, when there is the prospect of higher use thereafter.
If there is not to be moratorium, there should at least be a holding strategy. I agree with hon. Members who say that there should be no closures of major plants during that period and that such plants should be given 18 months to put their house in order and to take advantage of steps towards reflation.
I have never understood why the steel industry was not thought to he as important by Government as coal. In 1981–82, about £574 million in subsidies went to the coal industry, including a huge deficit grant. It has not been demonstrated to me that, politics apart, there is any logical justification for such a large subsidy to the coal industry, but none whatever to the steel industry. What is the logic of such unequal treatment? Over a relatively short period the Government should be prepared to face the large losses which, on the most optimistic estimates, would result from retaining present capacity.
There are some matters which I take for granted which should be common to all parts of the House. First, I agree that there should be an equality of sacrifice within the European Community in reducing capacity. I take the point made by the right hon. Member for Salford, West about Italy and, broadly speaking, I endorse what the right hon. Member for Taunton said on that matter.
Secondly, I take it for granted that the dumping of steel will be prevented and that voluntary restraint agreements will be enforced. Penetration of our market may be only 27 per cent., but in present circumstances that figure is much too high.
Thirdly, because in the long run Britain has a principal interest in maintaining free trade—broadly speaking—I believe that it is the job of the Government to ensure that there is fair competition in steel, both now and in the future. I am prepared to accept that the Government's
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intentions are good, but they have been very slow off the mark. A demanding time lies ahead of them and we shall be critical of their performance.
The Government must now take the first modest fiscal and budgetary steps to pull the United Kingdom out of that part of the recession which is of its own making. This is right in principle, and the best hope for the steel industry. The case for a reflation of about £4 billion—1 suggest nothing larger than that for the moment—is overwhelming. Such a reflation feeding through the economy over 12 months from the beginning of 1983 would be likely to increase the total United Kingdom demand for steel by eight per cent. to nine per cent. or two million tonnes of crude steel.
Mr. Allen McKay: I have listened closely to what the right hon. Gentleman has said, but perhaps I have missed part of his argument. Does he agree with the Opposition that we need a complete ban on imports of steel into this country so that we can restructure the industry?
Mr. Rodgers: A complete ban would be very damaging to our wider trading interests. I believe that the Government were slow off the mark in examining whether voluntary agreements were being met and that they must prosecute this leg of their policy much more strongly, but, in the light of the world trading picture and the breakdown of the GATT negotiations last weekend, a total ban would not be the best step for the Government to take.
I know that this is not within the capacity of the Minister of State, and I make no criticism of him, but I believe that if the Government now decided on a £4 billion reflation package, by the end of next year there would be 5,000 or more jobs in the British Steel Corporation than otherwise there could be, and increased employment in the private sector as well. I have made plain my direct interest in the steel-making plant at Redcar. On the assumption that Redcar had been reprieved, the effect of such reflation, with 5,000 jobs as a result, would save Ravenscraig as well. There could be no easier way of helping at least to ease the problems of the steel industry. Those problems are complex, but it is within the power of the Government now to make a major contribution and to stave off catastrophe.
5.3 pm
Mr. John H. Osborn: Much of what is happening in Sheffield is, in a way, beyond the control of the management of the public and the private sector—I have met members of those managements—and beyond the control of the Government. A crisis has been growing over the past 10 years. It is easy for Labour Members to accuse the Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Industry of deliberately wiping out Britain's basic industries, including the steel industry, but it would not be in the interests of any Government to do that.
Emotive words have been used, designed to attract a huge response from those facing the dole queue, and I accept that there are likely to be a further 1,700 redundancies in the Sheffield area. The sensation that is produced is not unlike that experienced by a canoeist descending the rapids of a fast-flowing river. The main concern must be to avoid hitting rocks and to navigate with all possible skill. The navigators of Sheffield, irrespective of crew, must have it as their ultimate aim to stay afloat and to avoid capsizing.

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The same sensation perhaps applies also to the Government, who of course have some control of these matters. But it is not merely a British phenomenon. The steel industry in Britain has taken a terrible knock, but the bitterness of steel managers in other countries is equally severe. The House cannot afford to ignore that. The phenomenon is world-wide. It is essential, therefore, that the industrial leaders concerned should understand the nature of the rapids that we are crossing. They are fast and dangerous, and our immediate aim must be to stay afloat.
The leaders of the British steel industry must ensure that Members of Parliament and governments do not make the navigation of the descent any more difficult than is necessary. Our industry's competitors throughout the world are certainly obtaining assistance—overt, discreet or blatant—from their own Governments. The message of this debate is that the British Government should now take off their kid gloves. I certainly support those who have taken that view.
The Sheffield special steels industry includes private sector companies. As a result of nationalisation, they have had to navigate even more perilous and treacherous waters. It is poor consolation to those already on the dole queue to face the categorical assertion that a major cause of the present awful prospect was the very act of nationalising steel, first under Clem Attlee and then under the right hon. Member for Huyton (Sir Harold Wilson). That tragic act resulted in Labour and Conservative Governments pouring investment into an industry that has inevitably buried its head in the sand and proved incapable of showing the flexibility necessary to face the tornados of today's market forces. It has been a tragedy for all of us and especially for the steel industry in Sheffield.
In the debate on the Queen's Speech, the hon. Member for Sheffield, Attercliffe (Mr. Duffy) accused me of not caring. In fact, at the time of the general election in 1979 I ceased to be a director of the company founded by my great grandfather. As I have said before, Aurora took over Samuel Osborn and Co. Limited and my life's work of more than 25 years was put into cocoon in 1982. To imply to the people who once looked to me and other directors of the company that I do not care is a travesty of the truth and I greatly resent it. Moreover, all that happened to my company as far as I was concerned happened before 1979, under the Labour Government headed by the right hon. Member for Cardiff, South-East (Mr. Callaghan).
Throughout the late 1960s and the 1970s, the private sector had to compete with the public sector for finance. The existence of the public sector meant that those who might have invested in the private sector during that period were unable or unwilling to do so. Therefore, whatever the rights or wrongs of the matter, for more than 15 years the private sector has been at a gross disadvantage compared with the public sector. Thus, to some extent, those on the shop floor in Sheffield who backed Labour and nationalisation have only themselves to blame for a major cause of the tragic unemployment that they now face. I shall not embark on that argument, however, as I made it clear in the debate on 14 July that there were also other factors when I outlined the economic forces and other pressures that have contributed to the situation.
In the Financial Times of 24 November, Mr. Ian Rodger sought to analyse the pressures affecting the world steel industry. It is no good Opposition Members behaving
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like ostriches and refusing to recognise those pressures. When Fred Cartwright, who was president of the Iron and Steel Institute, of the Steel Company of Wales predicted in the early 1960s that world demand for steel would jump from 350 million tons to 750 million tons by the 1980s he was about right. When Michael Dowding, a good friend of mine and president of the Metals Society, predicted a few years ago that this figure would go up to 1,500 million tons by the year 2000, I think that he miscalculated.
In the past 10 years the United Kingdom share of the market, according to Mr. Rodger, dropped from 4·1 per cent. to 2·2 per cent. The EC share went from 21·9 per cent. to 17·7 per cent., and even the USA's share dropped from 18·7 per cent. to 15·4 per cent. Other world producers such as South Africa, South America and Mexico have been able to increase their share of the market from 23·7 per cent. to 31·6 per cent. I mention this because the Western world has contracted at the expense of the newer countries.
Perhaps the third world, the developing world that we are trying to encourage, with its resources, has enjoyed immense expansion. Why has this happened? There has been huge investment into South America, South Africa, India and Australia. In these areas there has been cheap opencast coal, hydro-electricity or high grade ore.
The British Government must take immediate action to prevent the complete collapse of the Sheffield steel industry and the BSC. Fire-fighting to put out sudden conflagration hits the headlines and is necessary.
I spoke to my right hon. Friend the Secretary of State before the ministerial meeting of industry Ministers last month in Copenhagen. His problem is to ensure that the cartels backed by Commissioner Davignon work. Both the BSC—the commercial side, anyhow—and the private sector wish to see a little more teeth behind the various Eurofer committees. It was many years ago that I started talking to Commissioner Davignon about the need for this.
I am one of the few British Members of Parliament who spent considerable time with trade and price associations, particularly in the steel and allied industries, in the 1950s. This discipline is only too frequently difficult to uphold in one country. The concept of the trade association in a seller's market had become unpopular by 1957, although it was essential for Sheffield in the 1930's when there was a buyers market. The Secretary of State gave an assurance after the Copenhagen meeting that price competition would be controlled and that cheap imports would be curtailed, and the Minister has repeated it.
Let us have no illusion that, although not affecting so much Stockbridge BSC and Shepcote Lane, which have stainless steel, the import penetration for other steels is reputed to be as high as 60 to 70 per cent. The hon. Member for Rother Valley (Mr. Hardy) quoted these figures last month. If there has been important penetration on this scale, the House should have details of it and the Minister must see that it is stopped forthwith.
I welcome the Minister's assurance that there is to be a 12½ per cent. reduction of bulk steel into the EC from outside countries. I shall study his reply to the written question with great interest. However, it must be borne in mind, with regard to steel, that I have tackled some of the re-rollers and processors of steel and they have never wanted to rely on ingot or billet from one source alone. The tragedy is that that one source in Britain has become

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the BSC, with the exception of one or two instances such as that of my right hon. Friend the Member for Taunton (Mr. du Cann), who is involved in private sector steel.
If one is a processor of ingot or billet, one might buy 51 per cent. from BSC, or even 25 per cent. from a private steel maker in Britain. However, I have spoken to others who have told me that the balance of steel from elsewhere—foreign sources—is cheaper. This is one of the problems affecting the re-rollers and steel processors, but, in spite of this, I would still advise them to buy British.
A few weeks ago I met Mr. John Pennington, who has made some statements about what is happening in Sheffield. He raised two points with me of which the Minister is aware and which I have raised with him. There is no doubt that the Sheffield steelworks is buying electricity at a very high price because the cost of production of coal-fired electricity from deep-mined coal is inevitably expensive now, and will increase in price. That is why I reject the unholy collaboration between Arthur Scargill, the NUM and some of the steel workers' unions who oppose the Sizewell nuclear programme. If the steel industry could look forward to cheaper electricity in 20 years' time, let alone 50 years hence, although it is difficult to do much about it now, better job security could be obtained.
Secondly, Mr. John Pennington has come up with the cost of rates in Sheffield. This is why both private and public sectors are finding it impossible to continue in the city. Therefore, the city council should do something more to keep industry in the city.
I have met Mr. Derek Bray and seen his analysis of the economic reasons of what he has to do. Last week, the industry committee of the Conservative Party met Mr. Ian MacGregor. I tackled him on the trends, going worldwide, of the steel industry. He has had vast international experience and was at the international iron and steel conference in Tokyo. He pointed out that one of his major markets is the car industry, but Great Britain has some 50 per cent. import penetration of cars.
To every person buying a car I would say "Buy British". To every steel worker I would say the same thing. I have observed the cars parked outside the steel works in Sheffield, and many of them have been anything but British. What is more, cars are using new materials such as plastic bumpers and fibre bodywork so that the weight of a car is being reduced considerably. The modern car is built of less steel.
My right hon. Friend the Member for Taunton has reflected the view that there is a crisis. I have said that this is affecting the world. I have met people saying that steel factories in Pittsburg are working at 41 per cent. capacity. There is an OECD steel committee and in questions to the Secretary of State I have said that as a member of the Economic Affairs and Development Committee of the Council of Europe, I put the problem of steel to the OECD committee. Yesterday, as a result of that, I had a private meeting with the secretariat of the OECD steel committee. I gained the impression that the OECD will talk about this only pressure from its member Governments and from this Government as well.
Therefore, the British Government must press the OECD to let those in the industry know what can be a reasonable strategy for steel in Britain, bearing in mind the world-wide trends. The Government must look after the steel industry. The British Steel Corporation is still top heavy. It has enjoyed immense funds from the State purse
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whether for the manufacture of bulk steels, on the one hand, or special high value steels, on the other. It is the importation of the latter that is so important to the private sector companies, but especially the industry of Sheffield.
I hope that the action outlined today will work, and work effectively, by the turn of the year. The proposal for monitoring quotas and prices of imports must be examined. The Chairman of the Select Committee on Industry is in the Chamber. I hope that he will ensure that the House has adequate information to ensure that British Government action is effective.
5.18 pm
Mr. Roy Hughes: For a long time it has seemed that our steel industry has been in a perpetual state of crisis. How on earth the men produce steel is amazing, because morale must be at rock bottom. The Government waved the Union Jack and called for the return of the Falkland Islands. We expect the same level of patriotism to save our steelworks and the vital steel communities living around them, but every day we receive reports of closures, and rumours of closures, redundancies and short-time working. If it is not one works, it is another.
The repeated references to the Llanwern works are particularly irritating. What is the nature of its crime? It is producing steel efficiently and has been the success story of the BSC in recent years. There are reports that Llanwern could be a sacrificial lamb. It is argued, apparently, that if Ravenscraig were to close there would be a political upheaval in Scotland. What an indictment! It is a scandal that the Government should allow that position to drift on. I do not want to see Ravenscraig close. I want BSC to reach the target of 14·4 million tonnes, and as the recession ends I should like to see that figure increased.
We can all ask why our steel industry is in such a parlous condition. It has been suggested that years ago it was not producing steel as efficiently as it might have done and that we have not kept up with technological change. The recession has played havoc with the world steel industry and has had a traumatic effect on our own. If I were asked, I should unhesitatingly say that the major factor in the present depressed state of our steel industry is British membership of the Common Market.
Steel imports are flooding in, and 67 per cent. of those imports come from Common Market countries. According to Mr. Sirs of the Iron and Steel Trades Confederation, imports are the immediate cause of the problem. There has been no more devout supporter of the Common Market over the years than Mr. Sirs, but he is beginning to see the reality of the position. He is now calling for unilateral action by the Government against other EC countries.
If Mr. Sirs has any lingering doubts, his membership has not. Three years ago, against his advice, his members called for British withdrawal from the Common Market. Steel workers are at the sharp end of the problem. During the 10 years of our membership of the Common Market—that 10-year period has been mentioned many times during the debate—there has been a growing deficit in our trade in manufactured goods with other EC countries. In contrast, our trade with the rest of the world has stood up.
Sir Anthony Meyer rose—
Mr. Hughes: I shall not give way. I have debated this subject with the hon. Gentleman many times. I know that he is a propagandist for the Brussels outfit.

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Exports to the rest of the world provide a healthy trade surplus and help preserve jobs. We pay for our imports from West Germany—Volkswagens, Mercedes, or other manufactured goods—with North Sea oil. Our precious North Sea oil is being used to put our people out of work. There are well over 3 million people in the dole queue at present.
Our steel industry has been cut back compared to those of other EC countries. The Minister tended to gloss over that fact, but my right hon. Friend the Member for Salford, West (Mr. Orme) brought him back to reality. The Eurostat "Quarterly Iron and Steel Bulletin" published a few days ago shows that since 1979 employment in the British steel industry has been halved, from 162,000 to 84,000, but employment in the combined steel industries of France, West Germany and Italy has fallen only from 427,000 to 375,000. During the past three years we have lost 78,000 steel jobs, while our three principal EC partners have lost only 52,000. I say to Bill Sirs, who is a sincere, conscientious man, "You have been conned."
Italy has actually been increasing its capacity in recent years. Its steel is allegedly going to cars and consumer durables such as washing machines. When we joined the Common Market there was a massive expansion of the Hoover washing machine plant at Merthyr. There was to be a great boost in jobs. In fact, those factory doors never opened. All Merthyr had was redundancies.
Steel is the predominant material in the motor car, yet 46 per cent. of the new cars going on to our roads come from Common Market countries. Those imports should be severely curtailed. A country has the right to protect its vital industries, especially when areas with high unemployment rates are affected. If we were to curtail imports, our car industry would blossom overnight. In the past few days we have had the news that Cowley is to take on an additional 1,000 workers. If we imposed the necessary import controls, that figure would increase to 10,000, order books would expand rapidly and our steel workers would be working to capacity.
Last Thursday we had the celebrations to mark the tenth anniversary of Great Britain's entry into the Common Market. Thousands of our steel workers had plenty of time to celebrate if they had not spent all their redundancy payments. The celebrations were headed by the President of the Commission, Mr. Gaston Thorn. He was chaperoned by our good friend Mr. Ivor Richard. I understand that he is known as the Commissioner for Employment and Social Affairs. He was the Labour Party's nominee for the Commission, but he does not uphold the Labour Party's policy of withdrawal from the Common Market. If public opinion over a long period is anything to go by, he does not speak for the vast majority of the British people. A recent poll shows that 60 per cent. of the people of Britain are calling for withdrawal. Mr. Richard holds a highly remunerative and prestigious position, but he is living a lie. If he had a conscience he would resign and the gesture would be welcomed throughout the country, not least by the steel workers.
5.30 pm
Mr. Michael Brown: Over the past three and a half years I have had the good fortune to be called to speak in our many steel debates, but on each occasion I have realised that I should have yet again to
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draw attention to the industry's problems and to hope for better things to come. Each time that I am called to speak the problem is worse.
The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): Perhaps my hon. Friend should stop speaking!
Mr. Brown: My hon. Friend may not like what I say. My words will not be music to his ears.
Over the past three and a half years I have consistently supported—and I continue to support—the strategy announced by Mr. MacGregor and my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) who was at the time Secretary of State for Industry. The corporate plan envisaged a steel-making capacity of 14·4 million tonnes. However painful personally, I have always told my constituents that certainly in 1979 and 1980 one could not justify the manning levels in the industry in Scunthorpe. But, as my hon. Friend the Member for Flint, West (Sir A. Meyer) said, when one compares the output per man hour of the British Steel Corporation with the output in Germany or Japan, one realises that we have gone as far as we can go.
My hon. Friend the Minister of State said that he would judge the feeling and mood of the House, and I am glad to see him in his place now.
I agree with the sentiments of my right hon. Friend the Member for Taunton (Mr. du Cann). The right hon. Member for Salford, West (Mr. Orme) also made some important and valid points, allowing for the political bias in what he said. He visited my constituency about three or four days ago and was impressed by what has been done in an area totally dependent on the steel industry.
When I first represented the constituency, the work force in the industry was about 18,000. It was reduced by 3,000 in late 1979. In early 1980 we suffered a steel strike, and the Normanby Park steel works was closed at the end of 1980. I still support the reasons behind the decisions. I hoped that we should be out of the wood in 1981, but towards the end of last year we had further redundancies of 600 to 700. Four or five weeks ago the local management announced yet further reductions. The Secretary of State has not yet made the announcement for which everyone in Scunthorpe is waiting.
However, I do not wish to make only a constituency case. Every hon. Member associated with the steel industry, whether the public or the private sector, will, I believe, support me in this. We are all shareholders in the British Steel Corporation. In the coming weeks we must decide whether to back the optimism of Mr. MacGregor two or three years ago. We must consider the generations yet unborn. We should be enterprising and press the Government to decide to support the steel industry in all parts of the country.
I should not rest easy in my bed, even though my right hon. Friend told me that he was making no cuts in my constituency, if he asked me to shut up as I had got away lightly and the burden would fall elsewhere. I hope that later in the year, when my right hon. Friend makes his announcements, every hon. Member associated with the steel industry will make it clear that the loss of capacity in any of the big five plants is unacceptable.
Mr. Homewood: Many of us feel that, although there will not be a major closure, chunks will be chopped off the five major plants, which will amount to greater job losses than if one entity was completely closed.
Mr. Brown: We still have a steelworks in Scunthorpe, but only 7,000 of my constituents are employed there, whereas three and a half years ago the number was 18,000. The work force has been cut by two thirds. I take the hon. Gentleman's point. We must add up what capacity will remain in the industry. We should retain 14·4 million tonnes.
I hope that this debate is not about further job losses. My hon. Friend the Minister of State said that he would listen carefully to what we said. Every speaker has stated that we require our present capacity. I believe that the speeches to come will be to the same end. The House is speaking with a unified voice.
I believe that we should continue to back the strategy put forward by the Government and Mr. MacGregor two or three years ago. In our argument to the Government we must consider imports. My hon. Friend the Minister of State used the word "myths". I have spoken to the managements of BSC and of Allied Steel and Wire in my constituency and they have given me statistics. The flood of imports of reinforcing bar and of wire and rod from other EC countries is no myth.
Allied Steel and Wire, not now part of the British Steel Corporation, and other private enterprise firms, are being adversely affected by the heavy influx of imports. These firms are often the largest customers of the British Steel Corporation. If they are unable to survive import penetration and they go under, several British Steel Corporation plants will lose major customers to which they supply billets.
Ministers within the Department of Industry tend in their rhetoric to say that hon. Members make too much of the problems associated with the Common Market. I do not believe that we are overstating the problems of the EC. Those who are daily associated with the steel industry in their constituencies, meeting unions and management at various levels, cannot fail to be impressed by the statistics that are available.
My hon. Friend the Minister of State said he felt that the EC regulations, like a cartel, protected the United Kingdom. I have always understood a cartel to mean everyone acting together. It is, in fact, a price ring. If a cartel means that there is no difference in price between Italian, German and British steel, there should be no price advantage in EC steel entering this country. Therefore, it is plain that the cartel arrangements in which my hon. Friend has some confidence are not working to protect the British steel industry. A cartel means that there should be no advantage to any customer in Britain taking supplies from a member of the cartel outside the United Kingdom. But those supplies are being imported. The EC arrangements are therefore not satisfactory in protecting the British Steel Corporation.
I have no confidence in the so-called policing arrangements of the European Community. There have been delays in getting the Departments of Industry and Trade to accept that there is a case that should be taken to the Commission. During the three and a half years that I have been associated with the steel industry as a Member of Parliament, the arrangements that have been agreed within the European Community have not been
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satisfactory in protecting and preserving the fair competition that the British Steel Corporation and the private sector of the steel industry are entitled to expect.
My hon. Friend drew attention to the recent discussions between my right hon. Friend the Secretary of State and his European colleagues in Copenhagen. From what I have read, I do not have much confidence that those discussions will solve the problem. The Government are entitled to suggest to the EC that unilateral action is in order for the British Government if we have no confidence that the Commission's policing arrangements are delivering, or rather not delivering, the steel goods to this country.
Mr. Crowther: The hon. Gentleman may not appreciate that the prices recommended by the European Commission are not enforceable. They are not mandatory. All that is mandatory is that suppliers shall not discount from the published price list. No penalty can be imposed on anyone who sells steel at a price less than the Commission has recommended. It is only for breaches of the quota that penalties can be imposed.
Mr. Brown: I acknowledge the remarks of the hon. Member for Rotherham (Mr. Crowther), who has experience of the damage caused by imports to the fine products produced in his constituency. The hon. Gentleman implies that there is not the actual protection that supposedly operates under the cartel suggested by my hon. Friend the Minister of State. I believe that the problem stems to a greater degree from imports of European Community steel than from Third world imports. It is to Europe that we should devote the bulk of our attention.
I shall be fair to my right hon. and hon. Friends at the Department of Industry. I shall resist the temptation to suggest that they are apologists for the European Community. However, they sometimes tend to give the Community the benefit of the doubt. This results perhaps from all the negotiations that they conduct—my hon. Friend performs this role with great skill—in endeavouring to obtain from the Community all sorts of regional funds and aids and moneys supposedly for the steel industry, but purely, in the end, for redundancy payments. Is it necessary for us to pussyfoot around? Must we be kind and polite to the European Commission, because otherwise we might prejudice regional assistance or money from the European social fund? I wonder whether it is worth selling our steel industry down the river simply to obtain that money.
My view, at one time, was that it was right for Ministers to obtain everything possible from Europe to help hard-pressed, high unemployment areas of Britain. I am now starting to wonder whether it is worth while co-operating with the Community if the price to be paid for obtaining these moneys—with all the strings attached—which seem to do nothing more than provide the Government with the cash that they would otherwise have to find for redundancy payments, also means selling our steel industry down the river. Should we not forget about the money that is theoretically available from the European Community and concentrate instead on fighting the Community over the imports that damage our steel industry?
I have always endorsed and defended the views of my right hon. and hon. Friends within the Department of Industry. I have experienced some of the unpopularity that goes with defending difficult decisions. I acted on the basis

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that there was a long-term future for the 14·4 million tonnes of capacity in the British Steel Corporation. Nothing has happened during the past few months to change that view. If anything, my view has been strengthened. Since the MacGregor proposals have been implemented, backed with massive sums of taxpayers' money, the steel industry unions and the work force have delivered the goods in terms of competitiveness and capacity per man hour compared with German and Japanese workers.
The steel industry is now competitive on every criterion that can be applied. Indeed, I suggest that our industry is more than competitive when one acknowledges and takes into account the unfair subsidies towards energy and freight charges that unfairly sustain the German steel industry. My hon. Friend the Minister of State shakes his head. What statistics does he want us to produce to his Department?
Mr. Norman Lamont: I draw my hon. Friend's attention to the remarks of the chairman of the British Steel Corporation, who has stated that the problem of the corporation is still lack of competitiveness.
Mr. Brown: I acknowledge that, but I am constantly told by the local BSC management in my constituency about the high price of electricity from the Yorkshire electricity board. I am constantly provided with statistics that clearly show the difference in price between what the BSC pays for its electricity and what the German steel industry pays for its electricity. I take on board what my hon. Friend says, but I want to draw his attention to the lobbying that is done by Mr. MacGregor's senior management in my constituency.
In considering our share of the market, we must acknowledge that the whole cake is smaller this year than it was last year, but that the proportion of the cake taken by foreign suppliers today is much greater than the proportion that they took last year.
If we are told later this year that steel making will continue in Scunthorpe in future, I shall be greatly relieved, but I shall look carefully at the manpower and future capacity that will be involved. I shall also have regard to the capacity and number of workers in steel plants in the rest of the country. Only then will I decide, if as a Member of Parliament I am called upon to endorse whatever my right hon. Friend the Secretary of State puts before the House, which way to cast my vote.
5.51 pm
Mr. James Hamilton: I have always been opposed to Britain's membership of the European Community. However, I realise that we are in the Community and that until we withdraw we must get the best possible terms that we can for our industry.
Labour Members are fighting for the retention of the five major plants. There is no difference of opinion on that issue. Nevertheless, I trust that I shall be forgiven if I mention Ravenscraig, which is in the constituency of my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray), because the demise of Ravenscraig would mean the demise of the steel industry in Scotland. I, too, have steel in my constituency, and I shall refer to that during my speech.
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All those who have spoken so far in this debate have referred to the production figure of 14·4 million tonnes. I have met Mr. MacGregor on several occasions and I have never lost faith in his ability, but I have lost faith in the possibility of getting a straight answer to questions put to him. At a meeting in Glasgow only last Sunday he spoke about Ravenscraig in a way that made me despondent. Ravenscraig has invested £240 million, and it would be ludicrous if the British Steel Corporation were to decide to spend money on other plants.
We in Scotland talk about Ravenscraig, but the steel industry in Lanarkshire has almost been decimated. Clydebridge has virtually closed. The Clyde ironworks has closed, and in my constituency the engineering side, which came under the aegis of the BSC has been closed. The Imperial works in Airdrie published a long redundancy list only the other week. On the tube side of the industry in my constituency, the workers are working two on and two off.
The money that we are getting from the European Community is being used, as it were, to sell the jobs of all the workers in the steel industry. Once the workers in the industry hear about the juicy carrot that is available to them, the consequence will be quick closures. I am convinced that without those inducements many of the workers in the industry would fight tenaciously to retain their industry, because once that goes, virtually the whole industrial belt of Scotland will go.
In case my hon. Friend the Member for Motherwell and Wishaw is not called to take part in the debate, I shall say a word about the Craigneuk works in his constituency, because many of my constituents work there. The workers have until Friday of this week to put a case for the works to remain open with the existing work force. If they do not succeed, 427 jobs will go. The Craigneuk bar complex has made significant profits. This year, even in the depths of a world recession, there is a projected loss of only £0·8 million.
Low activity is the greatest factor in the loss. Owing to the lack of orders, the plant is producing only 16,000 tonnes a year. The projected loss of £0·8 million is offset by the fact that the mills contribute a total of £1·7 million to the finances of the corporation, in the form of £1·4 million as a contribution to the fixed costs of the Sheffield billet mills and £0·3 million to headquarters and divisional overheads. Closure of the works would result in a net loss of £0·9 million to the corporation. The divisional organisation puts the selling effort and the financial gains from billet purchasing outwith the group. As a result, the group management of BSC Holdings sees only an operating loss for the mills and could make decisions based on incomplete information.
I hope that Conservative Members, particularly the Secretary of State for Scotland and the Minister who is responsible for industry in Scotland, will join us on Friday at those works to ensure that the greatest possible pressure is put on BSC, because there is no justifiable reason why 427 men should be paid off.
Britain has been told that its plans to cut back the steel industry do not go far enough. The EC Commission has told all the EC countries to reduce production, with further losses of jobs, but no details have been given. Since 1977 the United Kingdom has cut capacity by 37 per cent., France by 1 per cent., Belgium by 3 per cent. and Germany by 0·5 per cent., while Italy has actually increased its capacity. Over the same period 100,000 jobs

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have disappeared in the United Kingdom, compared with 33,000 in Germany, 53,000 in France, 11,000 in Belgium and only 200 in Italy.
About 3 million tonnes of steel have been imported from Europe—this relates to what my hon. Friend the Member for Rotherham (Mr. Crowther) said—at prices below those that were agreed by the Commission. There is a distinct possibility that the British Steel Corporation will make recommendations to the Government. The Secretary of State for Industry will then tell the House that none of the five plants will be closed, but that certain furnaces will be put into mothballs. We all know that when Beecham carried out his railway closures he used the same terminology. He said that the railways were being put in mothballs, but we know that none of those lines have been reopened. Unlike the hon. Member for Brigg and Scunthorpe (Mr. Brown), I am very worried about what is happening, because I want the five plants to be retained, and, together with the steel workers of Lanarkshire, I shall fight with all the vigour at my command, for the retention of the Ravenscraig works.
For a long time, Clydesdale Tube Works in my constituency has been making a profit. Three weeks ago, together with the shop stewards, I met the management of that company. I was told that because Clydesdale Tube Works did not have a Concast plant, 1,000 tonnes of steel would have to be purchased from Italy. I asked why we did not have a Concast plant. If we do not have one, Clydesdale Tube Works will have to be closed because it will not be competitive. That fact has come from people in the industry—management and trade unions.
Import controls are a must—if not permanently, at least temporarily. We now find that 30 per cent. of the steel used in the home market comes from other countries. Last week I discovered that some of that steel was coming from South Africa—a country whose habits and way of life are anathema to us. We should draw the line at that and do something positive about it.
We have also been informed that of the 30 per cent. of imports into Britain, two thirds come from Common Market countries. That means that there is something radically wrong with the so-called cartel system.
It is not only the steel industry that will suffer. I worked in the steel construction industry, and that is dependent upon steel coming from various mills. We are told by senior management, shop stewards and other union officials that many customers have requested that their steel should come from the Ravenscraig works. The Secretary of State for Scotland has said that closure is a matter for the Government, but that the mothballing of one of the furnaces, is a matter for the management. I find that difficult to understand.
Clydesdale Tube Works, Ravenscraig and Craigneuk Bar Company are the heart of Lanarkshire's industry. Local authorities and railways will be the losers, as will the Polkemmet colliery, which supplies coal to the Ravenscraig works. Therefore, we are entitled to examine the social consequences of any closures.
Mr. David Lambie: Does my hon. Friend realise that the disaster will be greater than he has forecast? If Ravenscraig and Gartcosh close, Glasgow, under the ECSC Treaty, will no longer be a price basing point for steel. We are dealing not only with the 14,600 jobs in the steel industry, as my hon. Friend has mentioned, but with the 230,000 jobs in the steel-using
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industries in Scotland, which will be uncompetitive as a result of increased transport costs. The loss of those jobs would decimate industrial Scotland.
Mr. Hamilton: I accept everything that my hon. Friend says. It is worth consideration and I am glad that the Secretary of State for Scotland has heard that.
In fairness to the Secretary of State for Scotland, it must be said that he is on record as saying that he will fight, and fight tenaciously, for the retention of Ravenscraig. At a meeting convened by the Scottish Trades Union Congress, the hon. Member for Edinburgh, South (Mr. Ancram) also said that he would fight for the retention of Ravenscraig, and I congratulate him on that. None of the Scottish parties will tolerate the closure of the Ravenscraig works. I hope that they will also fight to ensure that none of the mills are mothballed.
I hope that the Government accept that it is vital that we get to grips with the problem of imports as quickly as possible and that we show our fangs to the EC in relation to the so-called cartel system. In the final analysis, it is the Government's responsibility to ensure that no holds are barred in the fight to retain the British steel industry.
6.5 pm
Mr. John G. Blackburn: This afternoon there is great unanimity of view across the Chamber. Genuine concern has been expressed regarding the five major steel plants in Britain. Hon. Members have spoken in firm and clear tones about the problems of those five plants. The matter is serious.
The position in Dudley is critical—not serious. For the past 125 years my constituency has been dominated by the Round Oak steelworks. It is a fine modern plant, and it produces excellent products. It has reduced its labour force from 3,500 in 1979 to 1,286 today. There is a genuine desire by the trade unions to reduce it to 900, but to retain its clout. Industrial relations in that company are a model to the industry. There is advanced technology, and the management and the unions work together in complete harmony. That reflects the greatest possible credit upon both.
In 1981–82 that company produced 304,000 tonnes of steel. In 1980 it received the Queen's award to industry for its export achievement. The Minister's speech this afternoon was a sincere cry not only to reduce imports but to increase our export potential. The Round Oak steelworks won the Queen's award for an export penetration of about 43 per cent. of its production. In essence it is a good steelworks and it should be retained.
I applaud what the hon. Member for Bothwell (Mr. Hamilton) said about steelworks in Scotland. He is entitled, for reasons that he holds dear, to object to steel imports from South Africa. The hon. Gentleman holds that view most sincerely. I hope that he will allow me to say that I object to the quota of 12,000 tonnes that is imported from Russia. That steel represents a corporate loss of production to Britain's steel industry.
Mr. James Hamilton: The hon. Gentleman need have no illusions about me. I am in favour of import controls on steel from any country. I have no great love for Russia, and certainly not for South Africa.
Mr. Blackburn: I described the excellence of the Round Oak steelworks, and I am not alone in expressing that opinion. The Department of Industry, in conjuction

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with the British Steel Corporation, decided on 15 November 1982 that the steelworks had great potential for the production of slab ingots and that trials would start. The potential production was 55,000 tonnes a year. It is important to remind the House of the date of the decision—15 November 1982. On 17 November, notice of closure was delivered to the steelworks. At 1 o'clock in the afternoon, the British Steel Corporation announced that the Round Oak steelworks would cease production on 23 December.
I hold the view now, and I expressed it publicly at the time, that the manner in which the announcement was made was nothing short of a disgrace. Hon. Members on both sides of the House would expect better treatment and courtesy from a nationalised industry than a telelphone call at 2 o'clock in the afternoon telling them that the steelworks in their constituency was to be closed. It is of added interest that there was five weeks' notice of closure. The Corby steelworks had 12 months' notice. I understand—I put it no higher—that the redundancies in Scotland will be completed by February or March 1983. We had only five weeks' notice, which is a great insult to the steel workers in my constituency, who have been tremendously loyal over so many years. Such treatment is unacceptable, and I invite the House to share my view.
I have been received with great courtesy on two occasions in the past seven days by Mr. MacGregor, the chairman of BSC. When he recently visited the Round Oak steelworks—at my invitation—he paid a warm and generous tribute to my constituents for their spirit of co-operation, which was self-evident in the works. The workers have a flexible working arrangement in the mills that many steel companies throughout the country would envy.
The Round Oak steelworks has the Concast system and the ability to produce bearing steel. This modem plant must remain open. It would be a different argument—one that I could not possibly defend in the House—if I were talking about a plant that needed modernisation, that had poor labour relations and a limited means of production, but it has none of those defects.
It is impossible fully to outline the social consequences of the closure of the works. I shall not dwell on them because, as recently as 24 hours ago, a deputation from the local authority in my constituency visited my right hon. Friend the Secretary of State for Industry and presented fully documented evidence of the likely social consequences. I shall merely say that they would be grievous.
Last evening I addressed an audience of 1,800 at the Dudley town hall. Mr. Bill Sirs was on the platform. I was talking to my people. When I know that 1,800 of them will be losing their jobs before Christmas, I have a solemn and moral responsibility to associate myself with them, and I do.
There are very few hon. Members who, on a closure issue, can say that they have the full support and endorsement of the trade unions for the way in which they are handling the issue. I have been given a vote of confidence by the unions for the way in which I am handling it. I have the full support of the Dudley local authority and I am delighted to have the support of the
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West Midlands county council. I also have the full support of the community. Nothing has ever bound it so closely together with one purpose as the closure of the steel works.
The Round Oak steelworks operated in the private sector for 124 years. When it was taken into the safe custody of the corporation in 1981, a covenant was entered into, to which I subscribed. It was covenanted that the company would return to its natural habitat in the private sector and would form part of the Phoenix II operation. That pledge must be honoured. The company is the kingpin of the private sector. It would be the largest manufacturer in the private sector. Without it, the political philosophy of Phoenix II lies in shreds. If that happens, it will be one of the darkest days in the industrial record of the Conservative Party, of which I have the privilege to be a member.
We must have a private sector. It will take political valour on the part of the Secretary of State to accept this statement and it will take courage from the Treasury Bench to implement it. I stress that the covenant must be honoured. The Round Oak steelworks is the jewel in the crown of the industrial West Midlands. There is talk about steel production of 14 million tonnes. I am interested only in the special steels sector for the engineering industry. With the demise of the company, BSC will have the ability to produce 1·7 million tonnes a year. It is ironic that the engineering industry will require at least 4 million tonnes when it returns to full capacity. I leave it to hon. Members to ponder sadly on where the remainder is to come from. We all know that we shall be subject to further import exploitation.
A parliamentary assurance was given that no closure of any of the five major steel plants would take place without a debate in the House. That was an honourable assurance. The House of Commons has a sovereign responsibility to debate such a decision. If so, I say with all the power at my command that exactly the same should happen with the Round Oak steelworks, which would be the foremost steelworks in the private sector.
I appear before the House not with a begging bowl. The opposite is the case. The plant does not need unlimited subsidy. It does not need money to be spent on modernisation. It has the Concast system, smelting shops and casting and rolling facilities.
Since 1977 the numbers employed in steel making have fallen from 182,000 to 79,300. I have outlined to the House the position at the Round Oak steelworks. I am dedicated to my constituents. I go to the employment exchanges and speak to the men who are signing on for benefit. Few Members of the House of Commons do that. Probably even fewer Conservative Members do so.
Mr. Lambie: Some of them will be signing on after the next election.
Mr. Blackburn: Steel workers in my constituency who have been made redundant say that they only hope that their sacrifice has not been in vain and that the steelworks will continue. With all the power at my command, I beg my right hon. Friend the Secretary of State to retain a private sector within the steel industry and I say that it is crucial that the Round Oak steelworks should form part of that sector.
I am, without shame, a Conservative because I want to hold on to all that is good in our industrial society.
Mr. Lambie: That is a contradiction.
Mr. Blackburn: The Round Oak steelworks represents all that is good. I am bound by all the ties of personal loyalty to attempt to retain that steelworks. The only reward I seek is that the House should share my view and dedication.
6.22 pm
Mr. Stan Crowther: I listened with great sympathy to the speech of the hon. Member for Dudley, West (Mr. Blackburn). I fully understand his feelings. It will be no consolation to him or to his constituents to learn that many constituencies have suffered a similar fate and, in some cases, an even worse one. All Members who represent steel constituencies live in fear of a similar fate. A disaster is a disaster, whether it descends suddenly or creeps up. In Rotherham we have lost thousands of jobs in the steel industry. The figure is not 100 jobs, 1,000 jobs or even 5,000, but about 15,000 or 16,000 in one constituency over a number of years.
It is no doubt a coincidence that we are holding this debate just two days after the announcement of a further 1,709 redundancies at the BSC plants at Sheffield and Rotherham—794 at the Rotherham works. That will bring the total number of job losses in the steel industry—public and private sectors—in the Sheffield and Rotherham areas to 9,704 in a mere 18 months. Those redundancies have occurred—with 100 here and 500 there—at different plants throughout the area, but the total of 9,704 represents the closure of one large steel works. The fact that the redundancies have occurred in comparatively small numbers, without producing the same impact, does not mean that the effect on employment prospects in the area is any less severe.
The new agony of the past 18 months is piled on top of the loss of many thousands of jobs in the previous two years, and the process continues. Although I said that it is no doubt a coincidence that we are having the debate just two days after BSC's announcement, whatever date the Government had chosen we could be sure that it would have been within a few days of yet another announcement somewhere in the country of further job losses in the steel industry.
This is not only a human tragedy, but an appalling waste of the nation's resources. We are throwing skill and experience on to the scrap heap. That should cause us the gravest anxiety, because we cannot afford to lose the skill and experience of those people. Within the next few days, or the next few weeks, we shall no doubt hear Mr. MacGregor's latest survival plan and the Secretary of State's decision on it. No doubt there will be further announcements of more massive cuts in the work force of the British Steel Corporation. Will there be an end to this slaughter before BSC is wiped off the face of the earth? The slaughter goes on and on and there is no let up.
During a previous debate on the steel industry—it was a long time ago—I said that I feared that Mr. MacGregor would find himself in the position of the surgeon who said that the operation was a complete success, but unfortunately the patient died. That is precisely what is happening.
I listened with considerable interest to the hon. Member for Brigg and Scunthorpe (Mr. Brown). I admired the honesty with which he told the House of his own change of opinion. The hon. Gentleman was a great admirer of the first corporate plan, with its loss of 22,000 jobs, but he is now beginning to realise that the problems of an industry
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are not solved simply by putting people out of work. A great deal must be done to put the industry back on its feet. Simply to say week by week that another 1,000 jobs must go here and another 100 jobs must go there will not, in the long run, solve any problems.
The Secretary of State for Industry, unlike his predecessor, who had no interest in the steel industry, has at least made sympathetic noises. He has assured the House time after time that he wants to ensure a satisfactory future for the steel industry. The only problem is that he never does anything about it. He cannot point to one thing that he has done during his time in office to improve the market for the steel industry in Britain. The right hon. Gentleman and his Cabinet colleagues will not take the necessary steps to create the economic environment in which the steel industry, both the public and private sectors, can hope for survival—I intended to say in which it could hope for success. My right hon. Friend the Member for Salford, West (Mr. Orme) drew attention to those matters at the beginning of the debate.
Ever since the Government came to office they have assured us that their policies will make British industry more competitive, especially British manufacturing industry, but precisely the opposite has happened. Industry has become progressively less competitive during the past three and a half years, yet the Government obstinately stick to the same course. They are heading for disaster, and after three and a half years they must know it, but they will not do anything about it, despite pleas from Conservative Members, which we have heard once again today.
We have heard several hon. Members asking for intervention and Government action to improve the position of our manufacturing industry. Are the Government blind? Why cannot they see the evidence right in front of their noses? Why do they refuse to understand—as everyone else understands—that their polices are leading Britain into the depths of a depression from which many of our industries will never recover? Everyone tells them that. Industrialists and trade unionists point that out, but they resolutely follow their course, however disastrous it may be for Britain.
As hon. Members have said, the fortunes of the steel industry are obviously and inextricably bound up with those of the steel-using industries. The steel industry does not sell its billets and bars across a Woolworth counter. It can sell its products only to other industries. If those other industries are sinking—as they are—the steel industry will sink with them.
Changes in Government policy could transform the position almost overnight. I refer, for example, to energy prices, which the hon. Member for Brigg and Scunthorpe rightly mentioned. The Minister did not seem to accept what he said, yet industrialists all over the country complain week after week about energy costs, and particularly about electricity charges.
In a recent written answer my hon. Friend the Member for Flint, East (Mr. Jones) was told:
"The most recent details of prices paid for energy by European steel producers were contained in the energy task force report published in November 1981. The Government are considering what further action can be taken in the light of the report".—[Official Report, 8 November 1982, Vol. 31, c. 70.]
It is now December 1982. A year has gone by and the Government are still considering what action to take, while British industry suffers a disadvantage of at least 30 per cent. compared with the energy costs of its European

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competitors. A year later the Government are considering what action to take. No wonder British industrialists despair.
Within the last few weeks we have had still further demands from the European Commission for another massive cut in our capacity. I was pleased to hear the Minister's comments on that. However, we still have not had a cast-iron assurance from the Government that they will reject those demands.
I must take issue with the Minister—I am sorry that he is not in the Chamber at present—on the number of jobs lost in the steel industries of the Community countries. He kindly allowed me to intervene on that matter, but he denied the truth of what I said. I remarked that since 1974 the steel industry in Britain had shed more manpower than the steel industries of France, West Germany and Italy put together. The Minister said that that was true from 1979 onwards, but not since 1974. In view of that denial, I must briefly burden the House with figures to show that I was right and that the Minister was wrong.
The Eurostat "Quarterly Iron and Steel Bulletin" has published the following figures in the form of monthly average figures of employment. They show that during that period 113,600 jobs were lost in the United Kingdom. The total for West Germany and France was 106,600. As Italy increased the number of those employed by 1,900, the total for the three countries is 104,700. That is about 9,000 fewer job losses than occurred in the United Kingdom. I hope that at some stage the Minister will explain how he managed to get his figures wrong.
All the arguments about further capacity reductions at the insistence of the Commission will be purely academic if we continue along this path, because there will be no steel industry left in Britain. My hon. Friend the Member for Rother Valley (Mr. Hardy) and I have often drawn the attention of the House to the world production records set in various departments of the Rotherham works of the BSC. We are very proud of those achievements. We have shown over and over again that, given a chance to compete on equal terms, British steel makers can beat anyone in the world. I ask only that the Government give the British steel industry a chance to compete on equal terms. Unfortunately, they have not shown any willingness to take the necessary measures, but I hope that they will do so now, because time is very short indeed.
6.35 pm
Mr Michael Ancram: Perhaps the most useful and constructive aspect of the debate is that it is being held before a decision is taken by the Government on any plan put forward by Mr. Ian MacGregor and the BSC. It must be evident to those who sit on the Government Front Bench that the House is very concerned about the future of the steel industry and is united in the feeling of crisis that surrounds the industry.
I make no excuse for following the example set by the hon. Member for Bothwell (Mr. Hamilton) in referring to the situation in Scotland. Hon. Members will know that in the past few months the plant at Ravenscraig has been starred as a possible candidate for closure both by rumour and now by statement from the BSC. In Scotland, we are talking not only about the restructuring of the steel industry and the large and appalling job losses that would
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be occasioned by the closure of Ravenscraig—important though they will be—but about the very survival of the Scottish steel industry.
If Ravenscraig closes, steel making in Scotland will come to an end. That is why the hon. Member for Bothwell was right to say that all the political parties in Scotland are united in the view that Ravenscraig should not close. Indeed, I go further and say that the rest of Scotland is also united in that view. Since becoming involved in the political world in Scotland I have never before seen everybody from the CBI, the Scottish Council (Development and Industry), all the churches, the trade unions and the chambers of commerce holding the same view. I hope that in particular the Under-Secretary of State for Industry will understand the strength of feeling in Scotland. I believe that my hon. Friend the Under-Secretary of State for Scotland is already aware of it.
None of us questions the difficulties facing the steel industry and we have heard explanations for those difficulties this afternoon. Some say that the problems are still structural and that there is a lack of competitiveness and others say that they are occasioned by the state of the international steel market. The latter point is perhaps the most important to my argument. It was only in March that Mr. MacGregor announced—I think that I quote him correctly—that British Steel had turned the corner. Since then, there has been no structural alteration. However, the state of the world-wide steel market has changed. Although it may take some time for the market to readjust in our favour, the alteration that we have witnessed is not permanent.
Therefore, if it is not a permanent cause of the problem we should not provide permanent solutions. On any view, the closure of Ravenscraig would be permanent, because, once closed, it is inconceivable that it would reopen or that any other steel plant would open again in Scotland.
None of us can pretend that everything at Ravenscraig is easy. We realise the current problems that face the plant. One of the plant's difficulties is that so few of its products are consumed in Scotland. That is something that we must face up to. I should be interested to hear from the Minister who replies to the debate how much of its production is taken up furth of Scotland and in what areas. I do not believe that Ravenscraig is analogous to Linwood. It was sad to see Linwood close, but the closure was inevitable because it had no future. I believe implicitly that the argument about Ravenscraig is not so much about the present but about the future, particularly the future industrial prospects of Scotland.
I shall pose one question on inward investment to the Government. We as a country and a Government in Scotland have talked for a long time about the possibilities of industrial regeneration and how we would be able to attract industry from overseas to Scotland partly because of our associations with the Common Market. It is clear that, if we were to depart from having a steel-making capability in Scotland, the chances of our attracting any business or industry of merit to Scotland would be slight.
Perhaps it is invidious to look at the past. I remember the hopes that were raised last summer when Nissan was looking around the United Kingdom and came to Scotland to look at one or two sites there. Would such a firm even bother to come to Scotland if it thought that the only place it could get the steel that it needed was further south?
It is not just the inward investment that matters but the domestic infrastructure. The skills of Scotland are

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basically engineering skills. However much we hope and believe that in future we shall be able to provide employment through the new technological industries, none of us can pretend that they will match all the employment demand of Scotland or fulfil more than, at most, a quarter of it. We shall still be dependent on engineering not only in the present industries that require steel but in the industries that we hope will be built in the years to come.
When we look at the oil-related industries that use steel, the oil companies that are beginning to move towards gas collecting in the North Sea, the pipelines that will be required, and the need for steel in that respect, and at the Energy Bill at present before the House, which we hope will open up a new energy generation area with private companies coming in to generate electricity, again requiring steel, how can we say that we believe that that will happen if at the same time we remove the means for those companies to get the steel at competitive prices? It is vital to retain a steel-making capability in Scotland on which we can build. I am certain that the closure of Ravenscraig would destroy that.
When the Government come to make the decision, they will have the opportunity to demonstrate their faith in the ability of Scottish industry to survive and regenerate. If they fail to do that, many of the harsh sacrifices that we have demanded of Scottish industry over the past few years will be questionable. People will wonder whether they were worth while.
That is why the decision has to be taken by the Government. The British Steel Corporation must look at its balance sheet and profit and loss account. It is interesting that BSC is only marginally required to consider future demand that might occur. The Government can take a stronger and longer view than that. They should do so. The Government must ask themselves what industrial structure they foresee in Scotland. If we are right in saying that Scottish industry can regenerate in years to come, there is only one decision that the Government can take on that basis.
Adjustments must be made to meet the current crisis. None of us with common sense could deny that. Inevitably some jobs will be lost, but I hope that we avoid competition between the big five plants about which plant is to close, with a closure taking place because there has been another before it. The right hon. Member for Stockton (Mr. Rodgers) spoke of equality of sacrifice in a European context. Just as we need that in a European context, if there is to be a readjustment in the United Kingdom steel industry, there must be equality of sacrifice, too.
Perhaps Ravenscraig in Scotland is a symbol as much as an industry. It has been the repository of a massive investment of public money and also of the confidence of Governments in the past which we cannot afford to write off. It is also the massive repository of Scottish hopes for the future which it would be disastrous, in every sense, to destroy.
6.45 pm
Mr. Martin Flannery: The Minister of State's speech gave us no hope at all. It was in stark contrast to most of the speeches from the Conservative Back Benches. There must have been a crisis of loyalty about which many of them agonised before they made their speeches. I welcome those speeches as they
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were realistic and faced up to the terrible and harsh facts that our steel industry is having to face. The hon. Members who have spoken, with the exception of the hon. Member for Sheffield, Hallam (Mr. Osborn), are facing reality.
There was a contradiction within some of the speeches. In two speeches—one by the hon. Member for Brigg and Scunthorpe (Mr. Brown), which I admired, and the other by the right hon. Member for Taunton (Mr. du Cann)—it was said that we were united. They were talking utter nonsense. Of course we are not united. We have a policy of hope for the steel industry and the Conservative Party has a policy of death to the industry. There is no unity. Until those speeches were made there was the unanimity of the graveyard on the Conservative Benches. Those speeches made me think that we should have had a vote after the debate.
Those speeches embody the future for all of us. However, let us face the fact that they were made by hon. Members who have backed the entire policy of monetarism in the Tory party up to the hilt. The logic of that policy is that we have landed in dire straits. We cannot isolate the steel industry from the devastation that the monetarist policy is causing to our economy.
The Conservative Government seem determined to preside over the liquidation of the entire British steel industry. Everything shows that that is so. They are the greatest demolition team in the business at present. They are destroying whole cities. If they do not waken up to that, the fabric of our society will be rent when it is too late for us to do anything about it.
The Conservatives' stated aim is to slim down the industry, make it leaner and fitter. They have used such words throughout the terrible demolition of the steel industry that is now well under way.
That reminds me of an anecdote that I heard about a man who sold another man a donkey. He was given the advice that he should not feed the donkey too much because if he kept it leaner and fitter it would work much better. When the man saw the other chap later he said "I did exactly what you said, but when I got the donkey used to living on no food at all, it went and died." That is happening not merely to the steel industry but to all our industry.
The Conservatives talk about balancing the books. If we produce nothing and sell nothing, the books will balance beautifully. That may be what the Conservative party wants, but we do not want it. Time and again the Government have made Mr. MacGregor start the process. Mr. MacGregor knows the American steel industry well. He is a great entrepreneur. I should love to know how many shares he has in that industry and how many he has in ours. He is a smooth operator. He is an able man. He is cool and never loses his temper, no matter how many sackings there may be. Every time we meet him he tells us that there will not be any sackings. Then the reality comes through to our steel-producing cities and we realise that Mr. MacGregor came here as the top agent of the demolition group. He is here first to denationalise the industry and then to demolish it. If any Conservative Member can prove that that is not what is happening, I shall be delighted to hear his case.
Mr. David Lambie: Is my hon. Friend suggesting that Mr. MacGregor is an industrial mole?
Mr. Flannery: I am loth to say anything too harsh about Mr. MacGregor, but one pays one's money and one takes one's choice. We have all seen what he has done. It has not been in favour of the British steel industry. The American steel industry is in nothing like the plight of the British industry. At first, he tells us that there will be no redundancies. Then there are some redundancies, and then the whole factory closes down. But that is not all. In places such as Consett and Corby the whole town closes down, never mind the factory. The Government's excuse is always the slump, as though the slump is an act of God. It is an act of capitalism and politicians. It is not an act of God. We do not lie down in front of it and act as though it came from nowhere. It came from the failure of capitalism to grasp the reality that if people are paid miserable wages they cannot afford to purchase the commodities that they produce. If that is the case, those who make the commodities will be laid off.
If, as my hon. Friend the Member for Rotherham (Mr. Crowther) said, the commodity is large and cannot be sold over the counter at Woolworth's but is sold to other factories, everything is closed down. It means that shopkeepers no longer get money from those who go shopping. In Sheffield, it means that the largest store in the city closes down, as happened last week.
Capital from Conservative Back Benchers is flying by the thousands of millions of pounds to places such as Hong Kong and Taiwan where there is no trade union movement and where profits are high. At the same time, the big drum of capitalism is being beaten by those who are selling Britain short rather than investing their money in their own country where it is urgently needed.
Conservative Back Benchers pretend, as they did with Argentina, that they hate Fascism, yet they invest their money in Fascist countries. They invest it in Latin American countries or anywhere else where the Right is in control and big profits can be made. They never understand, or pretend not to understand, what causes slump. They have a love for South Africa which, on examination, they own, but they pretend that they oppose apartheid. What is more, they damn everyone who fights against apartheid and asks for the freeing of the miserable prisoners there. They stab their own country in the back while pretending to be patriotic. No wonder that Dr. Johnson once said that
"Patriotism is the last refuge of a scoundrel."
The slump is caused by what is happening in Britain—holding wages down to the extent that the workers cannot buy what is being produced. Conservative Members do not seem to have learnt that simple lesson.
Even that stupidity is not the whole story—it is for the rest of the world but not for Britain. On top of the slump about, which something could be done, the wretched Government have created unemployment that is twice as great as almost anywhere else and is pushing Britain into worse circumstances than it has ever experienced. Our economy is far more sick than those of the rest of the EC.
The slump is not the problem. The Government, superimposed on the slump, are the problem. Our people and our steel industry must suffer not only the slump but this execrable Government who do not know what they are doing. Everything is out of control, yet, with one or two exceptions, Conservative Members pretend that everything is wonderful and that we will emerge from the slump because of the Government's policies.
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It is time that the Conservative Party woke up to what its Front Bench is doing to the British economy. The British public are beginning to do so and we shall see the result of that.
The Common Market lingers in the background. We were told recently that there were 110,000 sackings in the steel industry throughout the Common Market since the Government came to office. I could scarcely believe it, but only 10,000 of those redundancies were in the EC. The remaining 100,000 were in Britain alone. We suffered 10 times as many job losses in steel as the rest of the Community. If there is any reply to that point, I am eager to hear it. Even if the figures are not correct, the stark reality is that the EC is siphoning off our blood supply. It is doing almost unheard of things to our economy. That malign influence is now percolating through to the Tory Benches.
The combination of the EC and Tory policies will lead to the closing down of the bulk of the British steel industry. There used to be 18,000 employees at the Scunthorpe steel works. There are now only 11,000. That represents a drop of 61·1 per cent. It is appalling. I hope that the hon. Member for Brigg and Scunthorpe believes what he says. If he does not, God help him when the steel workers of Scunthorpe vote at the next general election.
I am told that Britain produces 14·4 million tonnes of steel a year. We have cut our production by 33·2 per cent. in the past two years. France has reduced its output by 15 per cent., West Germany by 0·5 per cent. and the rest have done nothing. Italy increased its production by 1·3 per cent. We have been cheated by a combination of the Tory Government and the Common Market. In 1979, we imported 17·4 per cent. of our rolled bar requirements, compared with 24·7 per cent. in 1980, 21·8 per cent. in 1981 and 29·5 per cent. to August 1982. The main source·75 per cent. of it·came from the EC. Thirty-three per cent. of that came from Italy.
As my right hon. Friend the Member for Salford, West (Mr. Orme) said, 20,000 jobs in steel have been sacrificed in Sheffield. The east end of Sheffield is like a desert. One can identify the great factories by their signs and see that their roofs are falling in. I understand that if one knocks in the roof one does not have to pay rates. In the meantime, we are importing GATT steel. That is what it amounts to—it is subsidised steel that is being dumped here. The Government do not have enough guts to stand up to the EC to stop that happening.
As long as that continues, the effect in British steel and engineering works will be horrific. The local Sheffield newspaper has a headline that runs "Steel bombshell·17,000 jobs to go." The whole of Sheffield is deeply shocked by the news. Mr. MacGregor has been telling the city that nothing like that would happen. Thank God a couple of Tory hon. Members have shares in private steel industries in Sheffield. We would like them to help us. If a man is sacked, irrespective of whether he is in the private or the nationalised sector, he is out of work. We want to help the private industry and the nationalised industry to get our people back to work.
Through their shop stewards, the work force in Sheffield have said that they believe that the 1,700 redundancies are merely a beginning and that the factories in Sheffield, Stockbridge and Rotherham will close.
If the upturn comes we will not be able to grasp it. What has happened in the EC means that European steel industries are virtually intact while ours is moving towards

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ruin. We are waiting for the upturn like Mr. Micawber. We are hoping to God that somehow the slump will handle itself.
It being Seven o'clock, and there being private business set down by the direction of THE CHAIRMAN OF WAYS AND MEANS, under Standing Order No. 7 (Time for taking private business), further Proceedings stood postponed.

British Railways (Liverpool Street Station) Bill
Order for Third Reading read.
Mr. Deputy Speaker (Mr. Ernest Armstrong): I remind the House that this is a Third Reading debate and, therefore, hon. Members must confine their remarks to what is in the Bill.
7 pm
Mr. John Hunt: I beg to move, That the Bill be now read the Third time.
The main proposals in the Bill originated more than six years ago. It is worth recalling that the Bill received an unopposed Second Reading on 11 February this year and went before a Select Committee in June. As a result of the Select Committee's deliberations, certain undertakings were asked of British Rail and were willingly given.
Indeed, a feature of the long history of these proposals has been the extent to which British Rail has been prepared to consult and discuss with all the interested parties and, whenever possible, to meet the various objections that have been raised. London Transport, the Royal Fine Art Commission, British Rail's various customers and many hon. Members have been kept closely in touch with the progress of these proposals throughout this period. I believe that British Rail has been exemplary in the way in which it has carried out the consultation procedure.
The main features of the board's proposals are, first, the complete rebuilding of Liverpool Street station at the existing low level with improved interchanges between British Rail services and bus and underground services; secondly, the closure and demolition of Broad Street station and the diversion of the North London line service via a new link line at Graham Road, Hackney; and, thirdly, an extensive property development on this site, providing 1¼ million sq. ft. of office space and some shop provision. I am happy to say that the Great Eastern hotel is to be retained and will continue to provide its impeccable services for the city and beyond.
It is important to stress that the timing and financing of this major British Rail scheme depends directly upon the related property development which is an integral part of the scheme. The total cost of the scheme is estimated at £260 million, of which the railway element is £120 million. Without the finance that will be generated by the property development, the railway improvements would not be able to proceed. Therefore, the proposed total scheme represents an exciting partnership between the public and private sectors which will produce tangible benefit for the travelling public. For that reason, the scheme has been widely and warmly welcomed throughout London.
It is worth recalling that of the four petitions that were originally lodged against the Bill, only one was pursued into Committee. That concerned Hackney council's objections to the proposed closure of Broad Street station and the plan to run the City link services of the North London line into a rebuilt Liverpool Street station by way of a new curve at Graham Road.
I understand that Hackney council would prefer the North London line services to continue to run along their existing high level approach viaduct into new high level platforms rather than to be diverted, as the Bill proposes, into the low level platforms in the new station. However,

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Hackney council did not object to the low level proposal at the public inquiry five years ago. It seems that its objections are of more recent origin.
The Select Committee did not feel able to accept Hackney's alternative proposals, but it asked British Rail to give an undertaking that, subject to the continuation of financial support from central Government for rail passenger services, the board would divert the North London line services via the proposed Graham Road link line. That undertaking has now been given. It is a firm assurance which should provide a substantial reassurance for Hackney council and for any hon. Members who remain worried by these proposals.
A Third Reading tonight is not the end of the story. The Bill then goes to the other place. Within this period British Rail will be happy to continue discussions with Hackney council and hon. Members who continue to have objections to or reservations about any features of the proposals.
I hope that it will not be necessary to go through the Bill clause by clause, but perhaps I should comment briefly on the most important provisions.
Clause 5 deals with the various major works to be carried out in connection with the scheme. In particular, I draw the attention of hon. Members to work No. 6—the short connecting railway between the North London line west of Hackney Central station to the Cambridge line into Liverpool Street. It will include two bridges—one over Graham Road and one over Wilton Way. The new curve is designed to provide a route into Liverpool Street via Bethnal Green for the Richmond trains on the North London line that at present use Broad Street. The board is firmly committed to that work following the Select Committee's deliberations.
Mr. Robert Hughes: Following the assurance given to the Select Committee, has the board considered the possibility of shortening the time scale over which the temporary station at Worship Street will be needed?
Mr. Hunt: The board is conscious of the need to shorten the time scale as far as possible. The predicted period has already been shortened from 10 years to six years. The board will look at the matter again to see whether further reductions can be made. I assure the hon. Gentleman that the board is conscious of the need to reduce to the very minimum the amount of inconvenience caused by this temporary arrangement.
Clause 5(2) deals with the reconstruction of Liverpool Street station and its enlargement on the Broad Street site. The plan is to create 22 new platforms in place of the present 18 and generally to provide improved services and facilities for passengers.
Clause 9 provides for the building of a bus station within reach of Liverpool Street station to facilitate interchange between road and rail transport. This will be a major amenity for the travelling public using the station.
Clause 10 deals with the provision of the temporary station at Worship Street to which the hon. Member for Aberdeen, North (Mr. Hughes) referred. This will remain in use until the completion of work No. 6, to which I have already referred.
Temporary arrangements will be necessary to facilitate the demolition of Broad Street station. The temporary
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station at Worship Street will be about 600 yards from Broad Street. Some, but by no means all, of the passengers now using Broad Street station will have a little further to walk. That is a minor inconvenience compared with the major improvements that will flow from the scheme. My hon. Friend the Member for Harrow, Central (Mr. Grant) may take a slightly different view of these arrangements. I shall listen to him with interest and seek to respond sympathetically to his remarks on behalf of his constituents.
The redevelopment of Liverpool Street and Broad Street stations will be of immense benefit to the travelling public in this part of London. The present facilities are acknowledged to be antiquated and inadequate. The Bill will provide for a modern and efficient terminal at Liverpool Street. The proposals were submitted to Parliament only after prolonged consultation and discussion. I hope that the House will feel that they represent the most sensible and economic way of providing a major and much-needed improvement of London's travel facilities.
I hope that the Bill will be given a fair wind tonight and allowed to proceed on its parliamentary way.
7.12 pm
Mr. Ronald W. Brown: I congratulate the hon. Member for Ravensbourne (Mr. Hunt) on his very fair and helpful presentation of the Bill on behalf of the sponsors. I, too, pay tribute to British Rail, which could not have been more courteous and helpful to anyone who wished to discuss the project. The divisional manager, Mr. Pettit, took great care to discuss with me and those whom I represented all the details of our various criticisms, on some of which he shared our concern. His project manager, Mr. Etherington, also spent a great deal of time not only talking to people in the immediate area but coming into Hackney to see the results of his work and accompanying those of us who were keen to point things out to him. I pay great tribute to them.
I agree with the hon. Member for Ravensbourne about the need to modernise the railway terminal and transport interchange at Liverpool Street. In all my conversations, I have come across no one who wishes to frustrate that objective. Users of the area, whether they drive down Bishopsgate by car or use the stations, know that the present situation is chaotic and there is clearly an overwhelming demand for something to be done. Nevertheless, that should not blind us to all the other issues that flow therefrom.
In the view of Hackney borough council, the proposal to terminate the existing high-level City link at Dalston and divert it round what is known as the Graham Road curve will have serious consequences. From a railway point of view, there is no problem. As a railway expert explained to me, it is neat, tidy, relevant and has all the virtues that a railwayman seeks. It is almost like setting up an OO guage system on the dining room table. It is all just right, the lines will come into Liverpool Street station at just the right level and everyone will be happy. If it was indeed an OO gauge system, I should favour the curve over Graham Road, because there would be no people, no blocks of flats and no industry or commerce to worry about. In reality, however, all those things must be taken into account.

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If the area through which the present line runs from Dalston down to Broad Street were a green field or derelict site, I would understand the desire for a clean, tidy curve. That is not the case, however. It is a dynamic area, striving to become more so. Through the partnership scheme, the Government and the borough council are working extremely hard to regenerate the area, to improve its industrial and commercial prospects, and to make it environmentally desirable. The furniture, boot and shoe and leather industries of the past have gone, due to the activities of successive Governments, for good and bad reasons, but the area is being regenerated with new technology, new printing works, microcomputers and security and other groups attracted by the partnership scheme. The Government and the borough council are striving to regenerate not only industry and jobs but the travelling facilities that the people there will need.
The partnership plans to spend about £4¼ million in Hackney and £1 million has already been spent on regenerating the Shoreditch area. The validity of the decision to truncate the line and not to run it through the south Shoreditch industrial improvement area must therefore he questioned in view of the enormous amount of work that has been done by the Government and the council, under the chairmanship of the Minister, to create the best possible conditions in that part of my constituency.
The other index to be considered is the unemployment index. There is already 15 per cent. unemployment in that part of my constituency. If the area is deprived of the conditions required for viable, thriving industry, unemployment will increase still further. The council and the Government have produced proposals geared to provide 40,000 jobs in the coming years. That is a tremendous opportunity that we should pursue, but its achievement depends enormously on the accessibility of the area and the means of transport available for people to get to and from their place of business.
It should be borne in mind that there are no tube lines in my constituency; there are only the buses. I read with interest the evidence given to the Select Committee by Mr. Pettit. In this respect, we should all pay tribute to the hon. Member for Dunbartonshire, East (Mr. Hogg), who chaired the Committee, and to his colleagues. The minutes of evidence show that they did their best to examine all aspects of the proposals and we in Hackney were satisfied that they did all that we could hope of our parliamentary colleagues in examining a private Bill.
Mr. Pettit was asked about the alternative bus routes, and gave a description of them. However, his description came out of the timetable, and any relevance to the timetable is purely coincidental. If the bus services happen to be the same as the timetable, one is lucky, as other hon. Members will know. While I appreciate that Mr. Pettit was giving what he thought to be the answer, given to him by London Transport, it does not have much relevance. There is not a bus every few seconds if one waits, as I know from having tried it.
This area will have no real alternative transportation if the railway is taken away. We had two stations on the Dalston to Broad Street line—the Haggerston station and the Shoreditch Church station. Both were useful and had been open a long time. Shoreditch was opened in about 1856 and was in business to 1940. It was bombed during the war and thereafter it was not replaced, for good reason. Some people may think that financial problems began in
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1979, but we have always had financial problems, and reasons have always been found why things could not be done. The two stations remain derelict.
We now have the chance of regeneration with the partnership, and the refurbishment of that station is necessary. There is the advantage of the line corning down, and there could be a service for people getting off right in the centre of the industrial development area. That is the right thing to provide. In addition, 50 metres from the station is a school that is only 18 to 20 years old and in first class condition but which is to become vacant because of the reorganisation of the ILEA schooling programme. The City of London polytechnic has decided to move into the school, and I was delighted when we persuaded it to do that. As a result, 50 metres from the station, about 2,600 persons—staff and adult students—will be using the station a great deal. That is the way that they will come and go. On those two grounds alone, it will be of immense importance to have the Shoreditch Church station reopened and to retain the rail link.
Another factor is the environmental argument. For years the viaduct has been the location for many small industries, some of which are good and some of which are not so good. Some argue that they are not so good because they do not have the proper facilities. British Rail does not provide the facilities, but simply provides a cheap stable to occupy, underneath the arches. On the last count that was taken, which is fairly notional, over 700 persons were employed under the arches.
In a joint effort, Hackney council and British Rail management came together. I commended them then, and I do so again, for their joint initiative to carry out a refurbishment of railway property. They have earmarked £300,000 over three years for painting bridges and £150,000 over three years for environmental improvements in that area. If it were decided to abandon the link, there would be one and a quarter miles of viaduct needing something to be done, and much money to be spent. British Rail wishes to get rid of the viaduct and dump it on the Hackney borough council. The council will say "No thank you very much". It will not be interested in that because more money will be needed for the upkeep. There will be much dereliction in just the area which the Minister, as chairman of the partnership scheme with Hackney council, is desperately trying to make into something worthwhile.
If we get rid of the line from Dalston to Broad Street there will be a viaduct of no value, seriously deteriorating over the years to the point of becoming dangerous. Hackney borough council will not want it and British Rail will be left with it for no purpose. Somebody will have to spend a vast amount of money. Therefore, I challenge and have challenged the decision of BR and its argument that that part of the line is less important than the rather nice concept of the curve going round the Graham Road.
There is little doubt that there is a need to keep the link through Shoreditch, but what of the BR proposals? The reasons for going low seems to hinge on reasons that I, as a railwayman might agree with. It makes the journey comfortable and easy. From time to time the arguments change. When we asked the board why the line could not go in at a high level, the answer was that one could not come in to Liverpool Street from Dalston at a high level to a low level. The Department of Transport railways inspector argues that he does not like trains coming down

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a gradient into a station. However, there does not seem to be much evidence that that is so in this case because the gradient is not so different from other gradients. Therefore, we need more evidence as to why the inspector of railways considers it to be an unsafe practice.
The other argument about why the line cannot go down into Liverpool Street from a high level is that it is not very nice, and BR prefers the line to be all on one level. I understand that argument, but in practice it would not break up anything. If the train comes in at a low level, one has in any event to go to street level, and if one comes in at a high level, one has to go down to street level. That would not seem to create much of a problem. On the contrary, there could be some argument for breaking up the flow of passenger traffic at the hectic peak hours.
There is no doubt that if we were to leave the line as it is at the moment and took it through into Liverpool Street, it would satisfy everybody's feelings, apart from those who aesthetically believe that it would not. An architect could argue that if all the lines came in at the same level that would be a nice block. However, we are dealing with human beings and issues of importance.
When I was discussing the line, I was given all the arguments about why it could not come in at a high level, but it came to my knowledge that for some time there had been negotiations going on between British Rail and the GLC to divert the north London line from Dalston out to north Woolwich. If that were to happen, all the arguments about the advantages of the curve or the high level would come to naught because there would be no city link anyway, either by the Graham Road curve or by the high level.
I should like to know a little more about that. Are the negotiations continuing? Are we looking for this link? If so, what will it do to the Graham Road curve? I think that there would be no Graham Road curve and I challenged British Rail about that. British Rail tells me that it is not true and that there will be the Graham Road curve, and I accept its undertaking, given here. We are told that British Rail has cut the time for the scheme to six years. If I were a gambler, I would bet that it would be eight to 10 years before it is completed. There could be a change of Government, financial control, and a whole series of other matters including retirements.
I guess that Mr. Pettit is about as old as I am—40 or 50 years—and 10 years may see him retiring early. Mr. Pettit will not have to answer then if circumstances have changed. Mr. Etherington may not be able to discuss why they are not fulfilling the undertaking given in 1982. I do not suggest that they are being other than straightforward. The scene they paint is the one they understand and the one put forward by their political masters in British Rail as correct. They will not be the arbiters then.
Mr. Freeson: Would not the matter be resolved if British Rail undertook to provide the high level station within the development area at the start of the project instead of providing temporary accommodation at Worship Street station?
Mr. Brown: I am grateful to the right hon. Gentleman; I am corning to that point. He has pinched my line. He and I are intelligent: we can see a solution.
I do not suggest bad faith, but changing circumstances may make the undertaking given in 1982 invalid in 1989.
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British Rail is talking about putting the temporary station at Worship Street. I have been there with Mr. Pettit and Mr. Etherington. We have looked at the site. There is no doubt that they are doing their best, given their remit, to minimise disruption to the travelling public.
I visit Worship Street frequently. In the morning there is a great deal of traffic up and down that road and it would be impossible for passengers to walk across it. When I mentioned the problem to British Rail, they took steps to see what could be done to protect passengers crossing that extremely busy road.
There is no doubt that during the construction there will be large numbers of travellers who will get fed up with that hassle every morning. It has been said that it is only 600 metres from Broad Street, but if it is pouring with rain one can get extremely wet going to work and get fed up. I am worried that not only will people get fed up and stop travelling by rail, but many of those people who go into the City have cars and they will finish by bringing their cars to work and parking them in my constituency, which becomes then the biggest car lot in the business. There could then be further aggravation for Hackney borough council and myself, because I shall have to go down frequently to resolve the difficulties that arise when cars park on the pavement and outside shops and houses.
In Committee Mr. Pettit was asked whether he thought that the temporary station would affect the travelling public. With his customary frankness, he said that there would be a loss of passenger traffic. He felt, however, that if once the project were completed it was to be marketed properly and people told that they could get to Liverpool Street a few minutes earlier that lost traffic could and would be regained. History does not show that. When buses have been re-routed and there have been temporary public transport measures, people have found alternative means of travelling and have seldom returned to their original ways. Although Mr. Pettit was right to say that there would be a loss of traffic, I do not think he could gaze into the crystal ball any more than the rest of us to say what chance there would be of recovering that lost traffic.
When the curve is built, a financial director in British Rail may ask whether it is necessary because of the falling traffic. He will say that it cannot be afforded because there is no money. There is no reason to believe that things will be different in 1989. There will be a board meeting and other projects will be suggested—for example, a railway bridge across the Thames. Reasons will be found for not constructing the Graham Road curve. No one will want it any more and the link will be made with North Woolwich station. The railway through Shoreditch will be lost and so will the curve round Graham Road into Liverpool Street. The result will be that we shall stop that City link from the day the Bill is passed.
I challenge British Rail's proposal. I understand the arguments. British Rail would like to stop the world, get off and get back on when the work is finished. British Rail is happy to undertake double glazing at the nearby block of flats because it knows it will never have to do it. The curve halves the distance between the council flats and the railway line. Councils always build blocks of flats around railway stations, cemeteries and sewerage works. I went to the flats with Mr. Pettit and his colleagues. We knocked on the doors and talked to the people and saw the effect of the proposal. I am convinced that the project will never be completed. Therefore, British Rail's voluntary

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undertaking to provide double glazing for the frontages of those flats overlooking the lines will not have to be fulfilled.
No one seems to be in favour of the Bill. It must have a friend somewhere, apart from Mr. Pettit and his colleagues, who are convinced that it is right; but a friend is difficult to find. Although I have not always been a strong supporter of the transport users consultative committee, it is a good barometer. It has considered the concept closely and rejected it. It is not at all happy with Worship Street. The matter is before the Minister. It is a warning when an independent body in whom the Minister has faith and which has examined the issue closely is against it.
The GLC is not in favour of the concept. It has been an issue for some time and is non-political. None of the councils wants it, even as far out as Harrow. No one is willing to get in bed with the British Railways Board to claim paternity for the scheme. A scheme that was of benefit would have supporters, but that is not the case.
The high level link should be allowed to go straight through into Broad Street, as at present. A convenient site has been identified by the TUCC and Hackney borough council. That situation could remain until the end of the project. It would have three advantages. No customers would be lost, at the end of the project the location could be knitted in directly to the new development, and it would be an additional incentive in an area where large public funds are invested to regenerate industry and commerce.
A powerful reason would be needed to discard those arguments. Two stations could be opened. It is the right time to open Shoreditch Church station to feed into the area of regeneration. In four or five years there will be the option in any case.
We should secure the comfort of the travelling public during the development work and afford the opportunity to develop Shoreditch and to open Shoreditch Church station and Haggerston station. We should help to breathe life into what was once a bustling and thriving community.
Only British Rail disagrees. Let me say that I am in favour of its whole scheme and disagree with only one part. My view is shared by a large body of opinion, including Hackney borough council. It is in its favour that during the 1976 inquiry Hackney borough council did not take that view. I was the only person who raised the query, and I had a vested interest, as the leader of the council told me. But the council was eventually persuaded that the other scheme was right. A great deal more evidence is now available. In 1976 there was a paucity of information.
I acquit the council of the charge of not doing its work. It argued the case inside the council and with myself. It did not make a great issue of the matter as it wanted to see the development of broader issues and felt that it was important to develop the whole Liverpool Street complex.
I hope that the House will endorse what I say to ensure that British Rail plays its part in a challenging area of London. We are trying to provide jobs in an area that has higher than average unemployment. The life of the area will fade and die unless we do something. I hope that British Rail will at this late stage change its decision. There are no financial, operating or engineering implications. I hope that our debate will have focused attention on the fact that there are no real reasons to say "No".
7.46 pm
Sir Julian Ridsdale: I, too, pay tribute to Mr. Pettit. He has dealt with an enormous number of complaints from my constituents about overcrowded and delayed trains, particularly to and from Liverpool Street station. The new station will help considerably to alleviate the problems. Four additional platforms and two additional approach tracks from Bethnal Green, where the peak services are used by 170,000 people daily, will help to solve the problems of delay and overcrowding.
Liverpool Street station handles slightly more trains than Waterloo station, but has three fewer platforms and two fewer approach tracks. Those facts are fundamental to the difference in reliability and punctuality between the two stations. The new platforms and tracks will be of great benefit to my constituents. At peak times, even with facilities being used to their maximum, with old electric trains and signalling difficulties, if one thing goes wrong, great disruption and inconvenience results.
Only seven of the 18 platforms can take 12-coach trains, and that is a major cause of overcrowding. The situation has been made worse by the large increase in new housing in Essex. Twenty-two platforms will help. hope that we shall hear how many will take the 12-coach trains.
The proposal will be the biggest single improvement for the travelling public since electrification of the railway 30 years ago.
Dr. Edmund Marshall: The hon. Gentleman is properly concerned with the interests of the travelling public, the commuters, in his constituency. Does he accept that, when new rail developments take place, the interests of residents in areas surrounding the railway can be adversely affected? Some hon. Members find that the environmental effect of new railway development can be disadvantageous.
Sir Julian Ridsdale: I understand the hon. Gentleman's concern. I hope that he will balance his concern against my concern. Some of his constituents have come to live in my constituency in Essex from where they commute to work. Therefore, we have a common interest in seeing the building of Liverpool Street station I agree, of course, that environmental conditions are important.
The building is to be carried out without using scarce British Rail capital. It is a marrying of private and public enterprise. Representing a rail port, I welcome any project that marries private and public investment. I recognise its value in advancing facilities.
There will be problems while the building goes ahead. I know that Mr. Pettit and the excellent staff of British Rail will do their best to overcome the problems. I appeal to British Rail, during this period when delays will occur, to restore the buffet service on the line between London and Clacton-on-Sea. If these facilities cannot be provided by British Rail, perhaps private enterprise might be invited to fulfil the task. This would be a small contribution to overcoming some of the difficulties.
I have much pleasure in supporting the Bill. I hope that it will have a speedy passage through the House so that the new station can be built as quickly as possible.
7.52 pm
Mr. Reginald Freeson: I shall be brief. The development of Liverpool Street station is long overdue. I do not wish to traverse history and to recount

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how long it has taken to reach this stage. Hon. Members who have followed the matter over the years will know the time that it has taken. The project should have been in hand many years ago.
I do not wish to say or do anything that will hold up the project. However, like others who have made representations, I have reservations about the manner in which certain aspects of the procedure are to be proceeded with. I understand that if, at the outset of the project, the proposition is that the north London line should be continued to some site, whether the TUCC site or another, so that it is guaranteed to run into the City, there are those within British Rail who take the view that it will be necessary to go back to the drawing board, thereby putting the whole project at risk. I do not wish to debate the details. If, however, this is why British Rail has not been prepared to programme the project from the start to provide for a station within the precincts of the development, instead of the Worship Street station site 600 yards away, for the termination of the north London line, I do not accept it. I do not believe that it is necessary to go back to the drawing board. I do not believe that the total financial negotiations, involving the public sector and private enterprise, would be put at risk.
Fears and anxieties of that sort are often raised. If the anxiety and the fear are not well founded, or if those within British Rail do not take the view that I have outlined, I do not understand why there is resistance to providing an alternative to the Worship Street station. There will continue to be opposition in general to certain aspects of the project. Some doubts have been expressed by the hon. Member for Hackney, South and Shoreditch (Mr. Brown). The main objection has come from many people who have, rightly, campaigned for the retention and the development of the north London line for passenger services. There is fear among those people that the line will be damaged by falling short of Worship Street station.
I cannot understand why that main, single objection to the project is not conceded and an alternative approach adopted. The alternative is not impractical. It will not make a fundamental difference to the money that will be required over the years to complete the scheme, but it will no doubt make some difference to the times at which that money will be required. I do not believe, however, that it will be impossible to sort out the difficulties.
If there is a risk to passenger use of the north London line and the likelihood of serious inconvenience to a large number of people using the line because of the temporary introduction of the Worship Street station, and if there is a fear that the introduction of a temporary stop 600 yards away from the new development will mean that the project will never be completed into the City, why do not British Rail complete the north London line into the development area by temporarily siting a station within the development if that is practical? That would resolve all the criticisms, including the most serious and justifiable criticism, not of the ultimate objective, but of the manner in which British Rail has gone about it.
I hope that there will be support for my plea that, whatever the reservations about certain aspects of the scheme on the one hand, and whatever grand support may exist for the project on the other, from the start of the project British Rail should introduce a temporary facility within the development area for passengers now using the
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Broad Street Station, in place of its proposal for the temporary station to stop further up the line. That is my plea. It is a serious one, and it is the one that has been put to me by those who have voiced criticisms and anxiety.
I have heard no criticism from my many constituents who use the north London line about British Rail's general proposition, but I have received many criticisms about the programming, which, in their judgment, puts at risk the future of the north London line running into the City, and which will create in the meantime serious difficulties and inconvenience for people travelling from my constituency into the City if they have to stop short at a temporary station for up to seven years while the project goes ahead.
I make no general criticism of the general proposition, and I hope that it goes ahead. I give my full support to British Rail. Development of the Liverpool Street and Broad Street sites is long overdue. However, I hope that British Rail will recognise the genuine anxiety about the programming of the project and the temporary station arrangement, and agree to run the service into the Broad Street-Liverpool Street development area while the project is going on, and not wait six or seven years before doing that.
8.1 pm
Mr. Anthony Grant: I agree wth the right hon. Member for Brent, East (Mr. Freeson), my hon. Friend the Member for Harwich (Sir J. Ridsdale) and the hon. Member for Hackney, South and Shoreditch (Mr. Brown) that the broad principle of rebuilding Liverpool Street is excellent and it should not be opposed. In six or eight years, when the work is completed, it will be a monument to British Rail technology and a splendid asset for all. I join the hon. Member for Hackney, South and Shoreditch in paying tribute to the courteous way in which British Rail has conducted consultations. I have had exactly the same experience as the hon. Gentleman.
I shall not pursue the argument about high level, low level or the Graham Road curve, because those bones have been well gnawed. Indeed, a powerful argument was put forward by both the hon. Member for Hackney, South and Shoreditch and the right hon. Member for Brent, East in that respect. I shall deal only with the concern of my constituents and explain why I object to the Bill.
My constituents, like those of the right hon. Member for Brent, East—although my constituents have a little further to go—use the Watford line into Broad Street to get to their work in the City. Incidentally, concern is also felt by people in Watford, and my hon. Friend the Member for Watford (Mr. Garel-Jones) has been active on their behalf and expressed their concern. This line into the City is of great value, because many of my constituents work in the City, mostly south of Broad Street, in banks, insurance companies, and commercial or professional offices.
Commuting to the City is not fun. Indeed, it is hellish. However, travelling on the British Rail line has been marginally less hellish and slightly cheaper than the alternative nightmare of travelling by London Transport. Therefore, I agree with those hon. Members who say that there may be a departure from the line if travelling conditions to Broad Street and Liverpool Street over the next six, eight or 10 years are made more hellish. Indeed, as the hon. Member for Hackney, South and Shoreditch said, the departure from that line might be permanent.
My constituents' concern has been taken up not only by me, but by the transport users consultative committee. I

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had a most helpful meeting with British Rail representatives, who were kind enough to come here to discuss the matter with me. The high level proposition is extremely expensive, and British Rail's finances are such that one would not want to increase its burdens. However, two other courses were discussed at the meeting. One was to make it easier for commuters to travel to Highbury and change there so that they could get on to the line to Moorgate. At present, that is a most unpleasant interchange. The second course was to improve the bus service from Worship Street to take them into the Broad Street area.
I agree entirely with those hon. Members who described what I call the "hardship"—as does the transport users consultative committee—and what British Rail calls the "inconvenience" of the journey from Worship Street to the south. It may be 600 yd, but whichever way one looks at it, it is nearly half or a third of a mile. It is not fun in bad weather or in the rush hour. It is not fun if one is old and perhaps unsteady on one's legs. It will not be fun in the dark when all the development work is going on. It is not like a pleasant walk through St. James's Park. It is therefore incumbent on British Rail, in embarking on this exercise, to do everything possible to minimise the hardship—or, as British Rail says, the "inconvenience"—to my constituents and others who have to use this means of getting to their places of work.
British Rail considered the two propositions and wrote to me. On the proposal to improve the direct stairway and subway link between different platform levels at Highbury so that people could more easily change to get on the Moorgate route, it said that the £1½ million cost would not be justified. I am not certain that that is correct, nor am I certain that every conceivable alternative has been fully explored. British Rail, in its letter, said:
"the Board are currently examining an alternative method of making the existing interchange arrangements"—
that is, at Highbury—
"more convenient for passengers."
My constituents think "So far, so good", but that that alternative is a little feeble. I think that it is rather wishy-washy. When my hon. Friend the Member for Ravensbourne (Mr. Hunt) replies, I hope that, with his customary courtesy and thoughtfulness, he will consider hardening up some of the loose undertakings that have been given.
A second course—to improve the bus service—was also mooted. British Rail seems to doubt whether any additional bus service is necessary. It has done some research. So have I, although not in such detail. I took the trouble to go to Worship Street as near to the rush hour as possible. I found that the buses were infrequent. When they did come, there was the usual bunching, and they were crowded, with many people waiting in considerable discomfort. No one would like to experience that for even a year, let alone six, seven or eight years.
That service should be improved. An improvement could be made at a cost of only £200,000 per annum—more modest than the alternative expenditure. However, there is some doubt whether existing services should be supplemented or whether there should be a specially designated service. The letter that I received was a little flabby on that subject. I hope that either my hon. Friend the Member for Ravensbourne or British Rail will say point blank that something will be done about the interchange at Highbury to make it easier to travel to
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Moorgate, and to enable my constituents, and those who have to come from that area, to get from Worship Street to the City with the minimum of discomfort.
Mr. Ronald W. Brown: I am sorry that the hon. Gentleman did not let me know that he was coming. I would have given him a coffee and accompanied him. The problem is that the streets are narrow. A single-decker bus would have difficulty trying to filter its way through Sun Street down into Bishopsgate. It is generally chaos there. If a supernumerary service is injected, it will pay people to walk because they will arrive at their destination much sooner.
Mr. Grant: How it is to be done I do not know, but it is not right that for the next six to eight years people should be expected to walk that distance. As the hon. Gentleman suggested, people may bring their cars and park them in his constituency. He is putting ideas into my head. However, many people cannot travel by motor car and have to go to London by train. I look for something rather more positive from British Rail if the matter proceeds.
We are now on Third Reading, but the Bill has yet to go through all its stages in another place, where no doubt what has been said here will be considered. I am not impressed by the argument that this matter has been discussed in great detail and diligently examined by the Private Bill Committee. My constituents and many others do not read the proceedings of the Private Bill Committee every day in the same way as they read the Daily Mirror. Therefore, they did not realise the consequences. They do now, and many responsible people have taken the trouble to write to me to express their anxiety about the future. They have not filled in a form from a special lobby. British Rail should take that into consideration.
The Minister will have to consider the proposals made by the transport users consultative committee. In addition, I have made representations to my right hon. Friend the Secretary of State. I ask my hon. Friend the Under-Secretary of State to accept that there will be hardship to people if the proposal goes forward. I shall sit down in the hope that my hon. Friend and my right hon. Friend the Secretary of State will be sympathetic to the cause that I have advanced on behalf of my constituents.
8.13 pm
Mr. Ernie Roberts: I speak on behalf of the citizens of Hackney who will be affected by this development. I shall oppose the Bill unless there is an agreement to provide a high-level platform at Liverpool Street station. In spite of the excellent development that will take place in the Liverpool Street area as a result of the general scheme, there will be too much hardship if it goes ahead without that high-level platform.
Furthermore, for the people of Hackney the Bill will bring an end to the quickest and cheapest transport link with the City. Hackney is already a deprived area. It has high unemployment, 5,000 one-parent families and a high proportion of the old and infirm. These are the people who will suffer most as a result of the closure of the link line and Broad Street station.
It is estimated that about 1·3 million passengers use the link line each year and that about 180,000 a year travel to and from the Dalston Junction station. The termination of

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the train service at Worship Street would mean that they would have to walk 600 yards. That is a considerable distance for the infirm, for the very young and for those who, for various reasons, are unable to walk easily. Workers are likely to get soaking wet during wet weather and will have to work in wet clothes. They will have to spend extra money on bus fares if they choose not to walk the 600 yards, and many of those who live in the Hackney area will not be able to afford that.
In any event, travelling by bus is a great problem, because of the traffic congestion in Kingsland Road and the road that leads down to Liverpool Street station. The extra passengeers will make the present conditions even worse. The problem will be permanent, as it is intended to close the City branch of this line in seven, eight or 10 years' time.
I received a letter from the Hackney public transport action committee, which reads:
"For at least seven years those who use Broad Street will have to make an additional journey to reach their City destination. This journey will either have to be walked, along muddy roads around what will be one of the largest building sites in Europe, or made via bus. In both cases some 10 minutes extra journey time and in the latter case, extra cost, will be involved. To walk the journey will be particularly unpleasant when dark as no main thoroughfare leads directly to the proposed temporary station which is, in effect, in a backyard (Plough Yard) off Worship Street."
The effect of the cutback to Worship Street will be to kill off passenger traffic on the City link and along the rest of the Northern line. About 17 per cent. of all journeys start or end at Broad Street. The GLC estimates that up to 50,000 passengers will be lost if the line ends at Worship Street. The consequent loss in revenue will lead to service reductions, station closures and further hardship for Hackney citizens.
The Hackney borough council has examined the problem in great detail on behalf of its residents. It says that it does not support the proposed closure of the link line because it forms an essential part of the transport infrastructure of the borough and provides an important link between the City and the borough's strategic centre at Dalston. In an area totally without London Transport underground services, the importance of such a facility cannot be over-emphasised. The City Link also contains two stations, at Haggerston and Shoreditch, which, although closed, could, if reopened, contribute to a significant enhancement of the rail network in the borough. This is particularly true of the latter station which lies at the centre of the borough's principal employment area, South Shoreditch. Closure of the City link line would, of course, pre-empt that.
Furthermore, a rail service via the Graham Road curve would be less attractive than the existing City link in both time—three to four minutes longer—and reliability terms. It is also likely that an increased fare would be charged between Dalston and Liverpool Street. Nor are bus alternatives in the City link corridor an attractive prospect. They are slower, more expensive—60p compared with 20p—and less reliable than the City link service.
Despite BR assurances over its intentions to build the Graham Road curve and its undertaking to the House of Commons Select Committee, this is conditional upon future public service obligation grants being sufficient for any necessary future service support. It is the concern of
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the council that the unsatisfactory conditions associated with the proposed temporary station at Worship Street will so undermine patronage on the line that BR will use this as a reason not to build the Graham Road curve and that Dalston will thus be left without any direct rail link to the City. Hackney borough council agrees with my views.
The proposals in the Bill will jeopardise the urban aid partnership schemes for the areas of Islington, Hackney and the City. Furthermore, the future City link can be secured only by building a high-level platform, as suggested by the transport users consultative committee, by Hackney borough council and by the citizens who are represented on the various transport committees in that area.
British Rail accepted as feasible the building of a high level platform but said that it would cost about £500,000 more in capital costs than the Graham Road curve scheme. That is an infinitesimal amount compared with the £300 million estimated total cost of the whole scheme. If the high-level platform were built, Broad Street passengers would be treated in the same way as the Liverpool Street passengers and would receive no worse a service.
The Greater London Council has agreed to examine the possibility of providing capital and revenue for British Rail for a high level platform in the event of the latter agreeing to it. Therefore, British Rail need not even be faced with increasing costs.
Environmental problems will arise in Hackney as a result of the Bill. Hackney has a commitment to work with British Rail in undertaking substantial works to the board's property. As an example, a total of £300,000 has been earmarked over the next three years for the repainting of railway bridges, and this is additional to the current level of spending under both the environmental and transport programmes. In total, it is expected that about £150,000 per annum will be spent on environmental improvements alone to British Rail property over the next three years. Despite all the work that has been done, dirty, unmaintained railway viaducts and bridges remain a major environmentally detrimental failure of the borough landscape.
The City link viaduct arches accommodate a variety of small industrial firms, last surveyed in 1981, employing 722 persons. The annual rental value of the premises is estimated at £400,000. The arches are let by British Rail at low marginal cost rents and only minimal maintenance is undertaken.
British Rail's expressed desire to dispose of the viaduct to Hackney or the GLC shows that it has no intention of undertaking any improvement. This negative attitude will leave Hackney with a 1¼ mile long industrial and environmental problem, which requires comprehensive planned attention to internal repair, cleaning and improvement of the local environment of the viaduct. Hackney council would be unlikely to accept responsibility for the viaduct if the railway service were withdrawn.
I urge the House to reject the Bill unless there is an agreement to build a high-level platform at Liverpool Street station for those who use the Northern line.
8.25 pm
Mr. Neil Thorne: I wish briefly to support my hon. Friends the Members for Ravensbourne (Mr. Hunt) and Harwich (Sir J. Ridsdale). I fully understand the concern expressed for their constituents by

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my hon. Friend the Member for Harrow, Central (Mr. Grant) and other hon. Members, particularly those who represent seats in Hackney. There is a problem and they are right to say that it can be very inconvenient to have to walk an additional 600 or 700 yards in inclement weather for several years.
However, several glowing tributes have been paid to Mr. Pettit, the divisional manager, and to the Eastern Region Railways Board, for the way in which they have tried to meet the problems and criticisms. Therefore, we must listen to what they have said. They have pointed out that for sound operational and financial reasons and in the interests of customers, it is important that the project should go ahead. It has also been made clear, in their own words:
"To impose alternative ways of redevelopment, and in particular a high level option would in the Board's view frustrate the scheme and imperil the Bill."
My constituency owes much to Liverpool Street station. I have already mentioned in the House that the construction of stations at Ilford, Seven Kings, Goodmayes and Chadwell Heath, on the London to Harwich line, involved British Rail's predecessor company in requiring guarantees of income from the developers of houses in my constituency before agreeing to build them. Therefore, when the houses were built they were designed to accommodate those who worked in the City. For many years, and particularly since the last war, conditions at Liverpool Street deteriorated. Indeed, for some of those years I commuted from Seven Kings station to Liverpool Street myself. Therefore, I can say that it is essential that the scheme should go ahead without delay.
The hon. Member for Hackney, South and Shoreditch (Mr. Brown) said that he had not heard of anyone who was in favour of the Bill. I think that he meant only from his constituents. I can think of many people who are in favour of the Bill. As recently as this afternoon, a lady constituent telephoned me to say that she hoped that the Bill would receive a Third Reading tonight.
Mr. Ronald W. Brown: If I said that, it was not what I meant. I meant that no one was in favour of the low-level curve going round Graham Road. In the preamble to my speech I said that we were wholly in favour of the scheme as such.
Mr. Thorne: I assumed that that was what the hon. Gentleman meant. But I did not hear him say that. However, I am grateful to him for making it clear that he is in general in favour of the scheme.
I can vouch for the fact that my constituents are very much in favour of the scheme. The Bill still has a long way to go. It must next go to the other place. I should be sorry if it were held up on its way. There is plenty of opportunity for further consideration by the British Railways Board, but I believe what it says, which is that unfortunately inconvenience will be caused to some passengers, but we must accept that as the price of progress. Therefore, I hope that the House will now give the Bill a Third Reading.
8.31 pm
Mr. Robert Hughes: I enter the debate with trepidation because I freely concede that my knowledge of the area is not exactly intimate. Having listened to hon. Members who have a close constituency interest, I find my task more difficult to contemplate.
It is a great shame that agreement could not be reached before the Bill got to this stage. British Rail freely
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concedes that it has the best of relationships with London boroughs on the different developments. It is a pity that there is now total disagreement on one aspect of the Bill.
I am convinced that there is a great need to develop Liverpool Street station. There is common agreement that the development of the station and its immediate surrounds is urgently required. London Transport has proposals for its station on the other side of the street, if I remember correctly where it is. All parties involved believe that it is necessary to move as quickly as possible on the development of the station.
It is a sad comment on the financial resources available to British Rail that it cannot finance the project from its own budget. That is relevant because it affects how quickly the development can proceed. The blunt truth is that, without the injection of private capital to finance the commercial developments, there would be no development of the station complex. It would be much better if British Rail could wholly fund the project so that any profits would be British Rail's. If the railways had sufficient finance it might be better if the choice of development and phasing were within their control, although that is not a matter that I can state definitely.
There is shifting ground even between the discussion of the evidence that took place in the Private Bill Committee and the discussion today. Broad Street station is at the core of the argument. We are discussing the level of the line and the consequent building of the Graham Road curve.
Hon. Members have referred to the problems facing travellers at the temporary station at Worship Street. If that were the only matter at stake, it would not be so important because other arrangements might be made. I understand that the real problem, although it has been challenged by the hon. Member for Hackney South and Shoreditch (Mr. Brown), is that British Rail management does not believe it is feasible to bring the existing line of route down to the lower level that is proposed for the redeveloped station. The management says that the gradient between the end of the viaduct and the end of the station would be too great to contemplate. In such matters we have to take the word of the railway engineers. It is not a matter with which we can deal.
One issue at stake is the strength of British Rail's commitment to maintain the service. Will the Graham Road curve ever be built? There are two other arguments. One is that the Graham Road curve, even when built, will not provide as good a service to passengers as at present. The other argument, which has been put both by the hon. Member for Hackney, South and Shoreditch and my hon. Friend the Member for Hackney, North and Stoke Newington (Mr. Roberts) is that the change of route will gravely affect the prospects for people who live and work in Hackney.
On my understanding of the evidence, the level of service to be provided seems to hinge on the length of the journey time. It is argued that the Graham Road curve would involve between three and four minutes extra journey time. That is not a matter of great importance. If one argues that one of the reasons for maintaining the existing line of route is to provide additional stops at either Haggerston or Shoreditch, extra travelling time would follow.
The core of the discussion is the grave suspicion that the termination of the line at Worship Street by way of a temporary station may lead to the abandonment of the

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service to Liverpool Street and that despite the assurances that were given to the Private Bill Committee, the Graham Road curve will not be constructed.
What assurances were given and what is their standing? The hon. Member for Hackney, South and Shoreditch said that some of the people who gave the assurances would not be around. That is true.
I shall refer to that part of the evidence where the hon. Member for Nantwich (Sir N. Bonsor) asked Mr. Mann, counsel for the promoters of the Bill:
"I have just one question if I may. Mr. Mann, I wonder if you would be very kind and help me with one matter, as to the undertaking given by British Rail regarding the Graham Road curve. Am I right in assuming that that has no strength in law, given, of course, that it is a bona fide? There is no reason, because of that undertaking or, indeed, any other reason, why they should go ahead with the Graham Road curve in due course, is there?"
In reply, Mr. Mann said:
"Sir, I think it would be binding, but it is what is known as a parliamentary undertaking, and parliamentary undertakings by statutory undertakers are commonly observed because, if they are not, the next time a particular promoter appears before a Committee of the House he may expect short shrift for his proposals … the British Railways Board appears annually. That is the legal position."
I can only say that some of the parliamentary undertakings that we are given in the House are not worth the paper on which they are written. We can only hope that outside promoters have a much stronger view of them.
British Rail comes before the House annually with various projects but it will be seven or eight years before those undertakings are expected to be complied with. Much can happen in that time.
The issue is whether the time scale for the building of the Graham Road curve has been re-examined. The hon. Member for Ravensbourne (Mr. Hunt) said that the need for a temporary station at Worship Street has been reduced from 10 years to six years. One of the best ways to remove doubt about the future would be to accelerate the proposal to build the Graham Road curve by altering the timing of the Broad Street closure. British Rail has gone a long way to meet local doubts. Indeed, it has agreed to pay for the double glazing on the railway side of the Boscobel House block of flats.
I become worried when I see experts talking of the need for the provision of special lubricated flanges and sections of line in which there will be no joints. I do not wish to insult the promoters or those who gave evidence with the best of intentions, but it reads like gobbledegook to me. When they go to that length, I begin to think that the argument about the increased noise as a result of the railway will be significant.
The issue at stake is whether British Rail can fulfil the commitment to build the new line.
Why does British Rail appear to be so adamant that the high level entry proposal is not on in any circumstances? This matter was discussed at considerable length in the evidence to the Committee. There appears to be no engineering objection. There seem to be two objections, one of which is that the additional cost of providing a permanent high level entry at Liverpool Street would be £2½ million in what is described as "discount cash flow terms". I am not sure what that means, but I do know what an extra £2½ million means.
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My hon. Friend the Member for Hackney, North and Stoke Newington has pointed out that on a project that might cost £400 million by the time it is built, £2½ million is not much. On the other hand, the board seems to argue that, if it provided a high level entry, there would be a 12-month delay.
It is difficult to assess those claims, because all the evidence suggests that the schemes as a whole will proceed simultaneously. In other words, it is not a question of the office blocks being built first and the cash generating therefrom being used to develop the station. The board argues that the two phases will go hand in hand. Why, then, cannot the board change its mind over the high level project? It argues that that would require a new Bill. I am not apprised of the technicalities, but I do not see why the board cannot introduce an amending Bill. Nevertheless, if the board wishes to see the projects proceed simultaneously, why not start the building of the Graham Road curve first without closing Broad Street station?
Mr. Ronald W. Brown: The hon. Gentleman said that the two phases would go hand in hand, but I understand that the board must first generate all the office development within the City area before it can get the money to build the line.
Mr. Hughes: I am grateful to the hon. Gentleman for raising that point. I looked at the evidence carefully. At one point the board said that it would not be waiting for the commercial development to be completed and that there would be simultaneous development. "Tandem development" may be a better way to describe it, because obviously different phases are involved. I am sure that the hon. Member for Ravensbourne will get a nod from the appropriate quarter to confirm whether I am right.
That leads me to the difficulties facing the House. As the hon. Member for Ravensbourne properly pointed out, this scheme has been under consideration for about six years. The development proposals are well advanced, and I understand that negotiations are taking place to secure the private finance. That has not yet been secured. Therefore, will the additional cost of a high level entry for Broad Street break the scheme? British Rail seems to think that it would.
Two other issues may yet affect the decision. First, Broad Street station cannot be closed without the Minister's approval. Apparently, the TUCC is against the closure of the station. Not having seen the recommendations, I am not sure whether that means on a permament or temporary basis. In any event, the views of the TUCC are now before the Minister. Has the Minister decided to allow the station to be closed? He should give us a decision today.
Secondly, there seems to be some argument about two listed buildings. I think that agreement has been reached that one of them should be removed, but that no agreement has been reached on the other. This will require consent either from the Secretary of State for the Environment or from the GLC. I do not know which will be the final arbiter.
What is the future of the scheme? I am as keen as anyone to see the development proceed. We cannot know how long the scheme would be delayed if changes were made. The argument seems to be that there could be a delay of a year because a new bridge would have to be built over Worship Street if we kept the high level entry. There

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seems to be some suggestion, too, that the period for completion of the project would be extended from nine years to 12 years. I have not studied the evidence closely enough to know why one year should suddenly become three. It may be a matter of procedures.
We can only accept or reject the Bill. It is a pity that we cannot vote on the technical motion to defer the decision on Third Reading for six months, which would allow a reasonable time for further discussions.
The borough of Hackney, since it began to discuss these matters, has not only changed its mind but hardened its attitude. I cannot properly recommend to my hon. Friends that they should vote against the Bill, but I believe that we should give as much weight as possible to the views of local authorities and local communities which have given very serious consideration to this matter.
I sometimes wonder how the railways were ever built. If we were trying to build a new railway system, the complications of planning consents, public inquiries, TUCCs and Bills would be such that nothing would ever be built. I accept that Private Bills were appropriate at the time they were introduced to curb the power of landlords who tried to stop the building of the railways. I am not sure, however, that this is the best way to deal with these matters now. It is certainly not fair to the House of Commons and to hon. Members who do not have a detailed interest in the matter. If we do not receive from the spokesman for the sponsors the strongest possible assurances about the future, some hon. Members may be forced to vote against the proposals.
8.48 pm
The Under-Secretary of State for Transport (Mr. Reginald Eyre): I think that we all recognise that Liverpool Street station needs modernisation and reorganisation. No one would deny that the present facilities are far from satisfactory. I am sure that many people who use the station, including Members of the House, will welcome in general terms the proposed redevelopment. In this regard, I appreciated the support given by my hon. Friend the Member for Ilford, South (Mr. Thorne). The hon. Member for Aberdeen, South (Mr. Hughes), too, was very fair in his comments on the importance of redevelopment.
British Rail's proposals and procedures, so ably described by my hon. Friend the Member for Ravensbourne (Mr. Hunt) in opening the debate, will improve the environment and facilities for passengers and enable the board to operate a more reliable and efficient service—all of this with no capital outlay for British Rail or for the taxpayer. In this regard, my hon. Friend the Member for Harwich (Sir J. Ridsdale) made a number of valuable points in his speech supporting the proposals. I also noted that he commanded tremendous support for his comments on the importance of the catering arrangements.
The property development is intended to pay for the new station and its associated railway works. I also welcome the proposed joint participation by the public and private sector in carrying out this development. Having said that I recognise that many people are concerned, particularly as the board's plans entail the closure and demolition of the adjacent Broad Street station and the provision of a temporary terminus for the Broad Street services at Worship Street, some 600 yards to the north. I have noted in particular the concerns expressed by my hon. Friend the Member for Harrow, Central (Mr. Grant),
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who was speaking on behalf of his constituents, on behalf of residents in Harrow more generally, and also, as he made clear, on behalf of Watford residents, all of whom travel to Broad Street as regular passengers.
The suggestions and concerns expressed by my hon. Friend the Member for Harrow, Central will be reported by me in great detail, as will all other points, to my right hon. Friend the Secretary of State in connection with his considerations of the closing procedure. My hon. Friend the Member for Eye (Mr. Gummer) has also expressed his concerns to me in this connection.
It will, I hope, be reassuring to those hon. Members when I say that these proposals are now going through the statutory procedures governing rail passenger closures, and this provides the opportunity for all aspects of the closure to be considered in detail. The transport users consultative committee has a responsibility to report on any hardship that may be caused by the proposed closure. It held a public hearing in April of this year, and its report went to my right hon. Friend in June. The hon. Member for Aberdeen, North raised this point. My right hon. Friend is now considering all aspects of the question, and I know that he hopes to announce his decision in the near future. Therefore, I hope that right hon. and hon. Members will understand that there is little that I can say at the moment, as to do so might be seen as prejudicing my right hon. Friend's decision.
However, it may be useful to the House if I emphasise that the closure procedures are quite separate from the Bill now being discussed. Indeed, the Bill contains a clause, clause 12, that makes it quite clear that its provisions do not override the statutory closure procedures in respect of Broad Street station.
The TUCC report concentrated on hardship, but I must explain that my right hon. Friend the Secretary of State had a much wider brief. In arriving at his decision, he is required to have regard to all relevant matters, including social and economic considerations. Since receiving the TUCC report, we have had to seek further information, mainly but by no means exclusively from the British railways board, partly on the TUCC's recommendations and partly on wider aspects. This process is now more or less completed although we are still awaiting comments from the GLC.
Mr. Anthony Grant: My hon. Friend has said that the Secretary of State's responsibilities are wider and embrace social matters. Will that include hardship or inconvenience to long-term users of the line?
Mr. Eyre: I am glad to confirm that that is so.
The House will realise that the proposal to close Broad Street has raised a number of complex issues and differing and conflicting arguments have been put forward. Those have to be considered with care and with regard to all the points that have been raised this evening. It would be no service to British Rail or to those who object to its proposals if we were to reach an early decision at the expense of careful consideration. I assure the House that we are considering the case urgently. I hope that my right hon. Friend the Secretary of State will be able to announce his decision before long.
I recognise that deep fears remain about the future of the services which now run into Broad Street. I acknowledge the points raised by the hon. Member for Hackney, South and Shoreditch (Mr. Brown), who spoke

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on behalf of Hackney borough council, and described its point of view as well as his own and that of local residents. I noted the reservations expressed by the right hon. Member for Brent, East (Mr. Freeson) as well as those which were expressed strongly by the hon. Member for Hackney, North and Stoke Newington (Mr. Roberts). I undertake to bring those views to the attention of my right hon. Friend the Secretary of State. Because of the effects of clause 12, the fears that have been described are not sufficient reason to delay the passage of the Bill. I hope that my assurances will have helped the House to decide to allow the Bill to proceed.
8.57 pm
Mr. John Hunt: I should like to respond briefly to the speeches that have been made. We have had an interesting and helpful debate and I know that all the speeches will be read with interest by British Rail, which will seek to respond sympathetically to the pleas that have come from both sides of the House. Most hon. Members have given a general welcome to the Bill, although there have been a number of reservations expressed about specific parts of it.
The hon. Member for Hackney, South and Shoreditch (Mr. Brown) spoke of the regeneration of Shoreditch, and I am sure that we all share his hope that that will proceed. I did not entirely agree with him when he seemed to base his claim for the high-level service on the fact that it would be required to stimulate such regeneration. He must recognise that 80 per cent. of travellers in that part of London use the bus rather than the train, despite the fact that train fares are lower than bus fares on the Kingsland Road route.
The hon. Gentleman pleaded for the reopening of Haggerston and Shoreditch Church stations. Both have been closed since the days of the blitz more than 40 years ago, so I contend that the regeneration of Shoreditch does not depend on their reopening. British Rail says that it would not be viable or economic, and that view is supported by the independent study by Hackney's consultants.
My hon. Friend the Member for Harwich warmly welcomed the Bill, as did my hon. Friend the Member for Southend, East (Mr. Taylor) in a whispered conversation with me before he left the Chamber. He assured me that he supported the Bill, although he could no longer remain in the Chamber.
My hon. Friend the Member for Harwich (Sir J. Ridsdale) said that the new station at Liverpool Street would alleviate the delay and overcrowding on trains that his constituents suffer. He made the point that Liverpool Street has a significantly poorer punctuality record than Waterloo. I hope that the scheme will get under way and that Liverpool Street will move to the top of the London league for punctuality. I assure my hon. Friend that the new platforms will take 12-coach trains.
The right hon. Member for Brent, East (Mr. Freeson), my hon. Friend the Member for Harrow, Central (Mr. Grant) and a number of other hon. Members concentrated on what they felt would be a serious inconvenience resulting from passengers having to terminate their journey at Worship Street. My hon. Friend conceded that the high-level alternative would be extremely expensive.
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British Rail is prepared to improve the facilities for interchange at Highbury to allow easier travel to Moorgate. British Rail is also satisfied that the existing bus service should be able to take the extra load but is prepared to consider running, in conjunction with London Transport, a short working bus to cover the journey from Worship Street. It would probably not be specifically between Worship Street and the City but more likely, for example, from Shoreditch to London Bridge. The possibility is being actively considered. I hope that what I have said will reassure my hon. Friend and his constituents.
The right hon. Member for Aberdeen, North—
Mr. Robert Hughes: I am delighted that the hon. Gentleman promotes me. I am not yet a right hon. Gentleman.
Mr. Hunt: It is only a question of time.
The hon. Member for Aberdeen, North (Mr. Hughes) raised a point that has exercised the minds of a number of hon. Members—whether the Graham Road curve would ever be built. He asked whether British Rail could deliver. The undertaking is firm and specific and is as far as British Rail can be expected to go. It is impossible to give completely firm commitments for eight or 10 years ahead. The undertaking is firm so far as it has been given in response to the Select Committee's deliberations.
Both phases of the development will go ahead concurrently. The objection to the high-level entry is partly on grounds of cost but also on grounds of delay. I am told that extra parliamentary powers would be needed together with additional engineering works which would be likely to set back the project for two years.
My hon. Friend the Member for Ilford, South (Mr. Thorne) made a plea for the Bill not to be held up and rightly argued that further undue delay could prejudice the scheme. I echo those words. The discussions will not end tonight. They will continue during debates in the other place and will also cover the recommendations of the transport users consultative committee and the Minister's decision on them.
Mr. Freeson: There has been reference to the excessive cost of building a high-level station to replace the concept of a temporary station at Worship Street. Is the hon. Gentleman aware of any consideration being given by British Rail to bringing forward the Graham Road curve so that the part of the project where it terminates within the development can be advanced to a time a great deal earlier than the end of seven years? Why should we be left with an uncertain undertaking of seven to 10 years from now before it is known whether the north London line link into the City is guaranteed?
Mr. Hunt: I am sure that British Rail is fully seized of the need to bring forward this development as quickly as possible. I shall see that the right hon. Gentleman's comments are drawn to the attention of the board. I cannot go further, but the right hon. Gentleman makes a vaild point.
I hope that the House will be prepared to allow the Bill to proceed. This has been a useful and helpful debate.
Question put and agreed.
Bill accordingly read the Third time and passed.

Steel
Postponed Proceedings on Question, That this House do now adjourn, resumed.
9.7 pm
Mr. Flannery: I am intrigued by the sublime irony of the Government with their plan to join the private and public sectors of industry. It is, of course, a backdoor method of denationalising steel. That is happening in Sheffield, involving the River Don works of the BSC and Firth Brown. I do not know whether it is a trial. It has certainly had many people wondering what is going on. The code name intrigued me. It is called Phoenix I, II, and III.
I took part in the discussions on a Bill that dealt with this issue. The phoenix, I gather, is a mythical bird that rose from the ashes. I can only assume that the Government are intent on creating the ashes for the mythical bird to rise from. The devastation and official vandalism of the industry should be seen by everyone. The damage brought by the Government is massively greater than anything achieved by Hitler in this country.
If anything is more dreadful than vandalism, it is the official, coolly and and coldly planned vandalism that is destroying our industry and putting millions of people out of work. We are in the presence of the most merciless Government that this country has ever had. The workers have been strained to breaking point. It is our duty to inform the Government just how strained to breaking point the working class now is, because, unlike Conservative Members, it does not have dividends coming in from foreign shares. Many of the workers have to live on social security, with all the abuse and insults that they get about that from the Conservative Party.
Workers now have to contend with what is known as the Tebbit Bill. That is law. I have talked to various groups of working people in various unions about that legislation, and they are only just realising what a horrifying thing it is and the blow that it is striking at the trade union movement. It is part of the reason for the collapse of the steel industry, and the fight against it will now begin.
We shall have many winters of discontent if the Conservative Party remains in power. Conservative Members may look smug and pretend that they have done no damage, but they know the terrible devastation that they have caused. They have lost their way. They should try to get back on the rails, because it will be a difficult job for the country, never mind their party, to get back on the rails.
What then should we do? I believe that selective import controls should be imposed immediately. They should deal, in particular, with the Common Market, which is a deadly enemy of this country, and which is in the process of being dealt with in a democratic way by the votes of the people. In particular, there should be import controls on steel from the Common Market. In my view, many in the Tory Party now see the necessity to do that, and only a minority believe in the Common Market.
Secondly, we should immediately halt closures and redundancies. That can be done. An example should be set to industry generally by proving that it can be done. If it is not done, the devastation will be even more terrible.
Thirdly, we should commence reflation of the economy as the only way out. There is no other way. If we do not do that, we will get deeper and deeper into the trough.
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Fourthly, we should consign monetarism to the dustbin of history, where it belongs. As I have said, we are in the presence of the most merciless and doctrinaire Government that we have ever had. They make any ultra Left-wing group of Marxists look mild in their dogmatism and doctrinaire approach.
Lastly—but, in fact, first—we should get the Tories out, because that is the only way in which we shall achieve the other four proposals.
9.12 pm
Mr. Patrick McNair-Wilson: Inevitably, a debate on the steel industry—like, perhaps, a debate on the coal industry—is about jobs, and I am not convinced that a debate about jobs will necessarily throw up the correct solutions to the problems of the British steel industry today. I have listened with interest and admiration to those hon. Members who have spoken about their constituency problems. Nevertheless, this debate is about the steel industry, and we must therefore address our minds to the future of that industry.
First, I declare my known interest in the steel industry. I left the privately owned pre-nationalisation industry almost 20 years ago, and I think it can be said with some satisfaction about the days before nationalisation that the production of liquid steel has never been higher since the State started to take an interest in an industry of such vital importance to this country.
There is no optimum size for the British steel industry. Those hon. Members who have talked about the collapse of the British steel industry should one part either be reduced or closed are not facing reality. Targets for industries are always likely to be proved false and can have no effect other than to destroy the morale of those who work in them.
I well remember that when I came to the House in 1964, one of the first actions that the Labour Government took was to reduce the size of the coal industry. The chairman of the National Coal Board at that time, now Lord Robens, made it clear that in his judgment any coal industry below 200 million tonnes would not be viable and would spell the end of the British coal industry. We are far below 200 million tonnes now and we have the most efficient coal industry in Europe.
Those who talk about the end of the British steel industry if another plant closes are not talking sense. They are merely putting fear into those who work in the industry. We must realise that no optimum sized industry exists.
I remember the debates on what is now the Iron and Steel Act 1972, when hon. Members talked about whether 35 million tonnes was enough. What rubbish that all turned out to be. That was based on computer models, extrapolating from experience to create graphs which automatically went up, and it has all been proved to be complete eyewash.
We must recognise that an industry must be run on the basis of the market size and what the industry can hope to perform. Therefore, when hon. Members complain about the possible mothballing of a plant—whether it be a furnace or a whole works—we should not be too jaundiced in our view. After all, the Hunterston direct reduction plant, which was opened and closed by the Labour Government, may, if oil prices world-wide continue to fall and gas prices follow them, once again be a fashionable way to make steel.

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We do not need to worry about whether Britain will lose its steel industry. It will have a steel industry of the right size to take advantage of existing markets. I am wholly committed—as I am sure my hon. Friends are—to ensuring that Britain continues to have a primary steelmaking capacity. It is a strategic necessity, and I have never heard any Conservative Minister suggest that it should be wound up.
However, having said all that, we must recognise that competition is extremely fierce. It is not fierce in the historical sense, because the problems that the industry is facing today are not new. Anybody who has any knowledge of the steel industry's history will recognise that. What is new is that there are now 76 world producers of steel. I remember going to a small country—Qatar—in the Arabian Gulf about 10 years ago. It has a national population of 150,000 people—not 150,000 people in the capital city. That country now boasts an integrated steel plant. Such countries are not only satisfying their own needs, but are selling into the world market.
When my hon. Friend the Minister of State tells us that we have a capacity for 21 million tonnes but a market of about 10 million tonnes, one can see that that imbalance must be corrected. How will that be done? There are real opportunities for the industry which are being ignored.
First, I acknowledge the work done by Viscount Davignon. He has attempted to bring the European steel industries to a point at which they can survive together. It is not exactly a cartel, but it has been an attempt to provide some sort of price plateau from which they can operate. It is obviously a high-risk policy to try to raise prices during a recession, as has been tried in Britain in recent months. It is reasonable for any business to try to get the best possible price for its products, but we require greater price flexibility from the British Steel Corporation.
My hon. Friend the Minister of State told us of the reply that he has given to a written question from my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) about stockholders. No doubt hon. Members will read the reply in Hansard tomorrow. The fact is—I speak with some experience on the subject—that stockholders who have outlets in both Britain and elsewhere would like to buy and stock British steel, but they require from British Steel prices that are comparable to those that they obtain in other supplying countries.
It is up to the BSC's sales force to match overseas figures where possible. Oportunities are being missed because of an attempt to maintain a price structure and to go for the highest price. There are two options—either to go for the highest price, or to maximise on the capacity available. In the present temporary situation, I should prefer to maximise the available capacity.
What else can be done? The cost of electricity is of special relevance to Sheffield, the home of electric melting. The announcement of a reduction of the work force at Sheffield, about which hon. Members have reminded us during the debate, is disturbing. Sheffield's electric melting shops used to be second to none—perhaps they still are—in their efficiency, but they use a lot of electricity.
My hon. Friend the Minister of State failed to take on board the point made by my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown). If my hon. Friend the Minister believes that the electricity prices that the British
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steel industry has to pay are on all fours with those of its competitors, he is not facing facts. I quote part of a letter from a large electricity user in Sheffield, who sets out the difference between the prices charged to him and those paid in other parts of Europe:
"As bulk electricity users ourselves with a peak demand of 34 megawatts … we are able to directly compare electricity prices with like … plants in France and Italy which for the second half of 1982 are"—
these are per kilowatt hour—
"France 1·12; Italy 2·16; United Kingdom 2·52.
It should be noted that in the United Kingdom figure we have full advantage of the new bulk tariff structure. This position is made worse when we learn that our Italian plant is now to take advantage of a state supported scheme for large electricity users which will reduce their price by 50 per cent.!"
The reason why no price change has been made, or can be made, without an interruptible content is that the statute prevents it. Therefore, I appeal to my hon. Friend to see whether it is possible, under the terms of the Energy Bill going through Parliament, or in some other way, to alter the statute to enable industries such as steel to be treated differently from everybody else. They should be treated, not on the basis of a furnace that has to be closed down at 10 minutes' notice, but on the basis of enjoying a continuous supply of electricity at a different price. The existing statute forces the CEGB to have an even-handed approach to all customers. Until that statute is revised, talks about making concessions to bulk electricity users will never reach the heart of the problem. I ask the Government seriously to consider the legal obstruction.
Secondly, there are businesses in Sheffield and elsewhere which are paying more in rates than they are making in profit. I am not suggesting that we should start rating agricultural land or buildings—there are some who argue that agriculture is the largest industry in Britain—but if the Government are likely to introduce relief for certain domestic ratepayers, I urge them to treat industrial ratepayers similarly. They are carrying the colossal extra burdens of rates and high electricity charges in addition to the competition problems to which I have referred, and we are doing ourselves an injury which we could well do without.
Thirdly, there are two ports of entry in Italy for steel products. We have heard much about import penetration. I am delighted to hear from my hon. Friend the Minister that the overall figure is 30 per cent. However, if we were able to remove that percentage altogether, the industry's problems would vanish at a stroke. If we try to sell British steel in Italy, for example, from points other than the two ports of entry, the steel will lie rusting on the quayside. If one tries to sell a video recorder in France and it does not go through Poitiers, which is in the middle of France, one cannot get it into the country at all.
Fourthly, if that is what European co-operation is all about, we, too, will have to play the game or face being destroyed by those who are playing it. The suggestions in the written answer to my hon. Friend the Member for Selly Oak about stockholders is merely evidence of the same problem all over again. It seems that we are creating a web of controls which will be applied and understood by the British steel maker or stockholder and ignored by the competition overseas, be it in Europe or anywhere else. The time has come to ascertain from Europe whether we can get even-handed treatment, and if not, to start playing

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the competition at the competition's game. If we do that, the four items that I have mentioned will lead to a positive sales pitch for the industry.
Morale in the British steel industry is extremely low. That is because those in the industry wrongly believe that no one in the Government is interested in the industry's problems. However, problems such as the one that I have mentioned about electricity charges, which have been hammered at Ministers ever since 1979, appear always to be brushed aside. I ask that my four proposals concerning rates, electricity, points of entry and a flexible sales approach by BSC are implemented immediately, to try to correct some of the grave problems that now face British Steel.
9.30 pm
Mr. Bill Homewood: I am glad to follow the hon. Member for New Forest (Mr. McNair-Wilson) because in some respects some of his arguments run parallel to what I wish to say.
I am puzzled by the fact that when the Government discuss unemployment they consistently talk of competitiveness. They believe that if competitiveness in industry—steel or any other industry—can be increased, there will be no problem in arresting the decline in employment opportunities—indeed, increasing them. I am suspicious of that theory because of the state of the steel industry.
Over the past three years there has been an enormous increase in steel production. We have lost 112,000 jobs, but no one now disputes that our productivity is equal to—indeed surpasses—most of the productivity levels in Western Europe and the Common Market.
Only two factors are involved in price competitiveness: first, the level of productivity and, secondly, wage costs. If those factors are favourable to an economy, it should have no difficulty in rebutting imports and its export industry should have an enormous advantage. Productivity in Britain is equal to the rest of Western Europe. Wage costs, as everyone knows, are lower than in most Western European countries, but we are still unable to cope with the import menace. Over the past seven months, imports into Britain from the EC have increased by about 48 per cent. I have come to the conclusion that something is wrong, although Ministers have denied it in every steel debate in which I have taken part. The hon. Member for New Forest touched on most of those points.
We have told Ministers time and again that our competitiveness must have been eroded by energy costs, transport costs or even by Government intervention in the steel industry. Only electricity costs were quoted in detail, but if gas, coal and transport costs were examined, it would be found that our subsidies are almost at the bottom of the league compared with Western Europe.
It is time that Ministers started to believe in the philosophy they preach. They should not imagine that there exists in Europe a perfect competitive market in which everything is equal. There would be if the rules of the game were adhered to. But the rules of the game are not being adhered to and the sufferers are our steel workers. It is no use hon. Members saying to me now, as they were able to say three years ago, that our industry is overmanned and underemployed and that steel workers do not work hard enough. That is no longer true. Yet we are still suffering from the burden of unfair competition—we
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should be leading the race—because of factors outside the control of the workers and management of the British Steel Corporation.
I shall repeat figures which were given this afternoon because Ministers constantly ignore them in their negotiations within the EC. In the past three years we have shed 33 per cent. of our productive capacity. The only EC country that has shed anywhere near that amount is France, which has shed 15 per cent. West Germany has shed 5 per cent. Italy, as has been stressed virtually all afternoon, has increased its productive capacity and is laying down a new integrated plant which will further increase its productive capacity. We do not mind being competitive, provided that the rules are fair, and it is up to the Government to ensure that they are fair. The British steel worker is sick and tired of being told that he must lose his job, because he knows that there is no equity in the system.
The hon. Member for Dudley, West (Mr. Blackburn) spoke about the Round Oak steelworks. I know more about the Round Oak steelworks than that hon. Gentleman—I am not boasting—because I dealt with it for about 10 years. Indeed, I negotiated all the job reductions when the new plant and capacity were installed. It is one of the most modern steelworks in Europe. Capital equipment for that plant cost £25 million. It replaced its open arc furnaces with electric arcs and put in a new 850mm reduction mill. It is probably the most efficient plant in the United Kingdom in terms of its particular type of output. Nevertheless, that plant is going to the wall. The reason is that the name of the game is not fair trade. It is being subjected to unfair competition from the EC, and that is unjust.
About four weeks ago I had a meeting with top management in Corby. I was told that another 600 jobs were to go at the tube works. Yet that is one of the most modern mills in Europe. It was built about three years ago at a cost of £50 million. The only mill like it in Europe is in Italy.
That brings me to the second thing that is wrong with the Government's thinking. Supply side economics cannot solve the steel industry's problems, no matter how gently they are infused into British business. If demand is reduced in practically every sector of British business, the steel industry will suffer. The management in Corby made no bones about the problem. We were told that the contraction in the construction and engineering industries and the contraction facing almost all its customers had led to the loss of 600 jobs.
The funny thing is that three years ago the Corby iron and steel works was closed, because it was losing £10 million a year. Now there is only the tube works left. Another 600 jobs are to go because the plant is still losing £10 million a year. The figure is exactly the same. I suppose that we should consider ourselves lucky, because next time £10 million is reached, only two or three jobs will be lost if there is a proportionate reduction in jobs.
It is nonsense to continue to pretend that we shall have a steel industry for ever—no matter what the hon. Member for New Forest may say—if there is no demand for its goods. That is why Opposition Members say that there should be some form of import control. We are entitled to an answer from the Government on that point. If competition were fair, we would not urge import controls. If trade within the EC were equitable, we would not ask for such controls. All the good is on our side. We should slam EC countries to death and expand our steel industry,

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while theirs declines. However, that is the Ministers' responsibility. We are asking for import controls because it seems to us that that is the only way that we can hold our own with the Common Market's steel industry and producers.
The hon. Member for New Forest said that the number of steel-producing countries had increased enormously. In the past seven or eight years the increase has been from about 33 to 76, but 75 per cent. of our imports come from the Common Market. Third world countries are not helping us. However, they are not damaging our steel industry as much as the Common Market. It is up to Ministers to give us selective import controls against those products to enable us to stabilise our industry until, as the hon. Member for New Forest said, we can adopt the practices that EC countries have used for so long and which have destroyed much of our steel industry.
It does not matter what we do about selective import controls. Unless the Government change their policy with regard to expanding the economy, there will be no future for the British steel industry. It will go down and down. I suggest to the right hon. Member for Taunton (Mr. du Cann) that it does not matter whether the industry is publicly or privately owned. The industry will go down if there is no change in the Government's economic policy.
9.41 pm
Mr. Hal Miller: The House is indebted to the hon. Member for Kettering (Mr. Homewood) for his knowledge and experience of the industry and the moderate and constructive way in which he spoke. I share many of his views about fair competition. However, I am not so happy about some of his remarks about production, but I shall endevour to deal with that in my speech. I remind the House that I have an interest to declare in the steel industry. It is sufficiently well known, but it is fair that I should draw it to the attention of the House again.
The debate is alive with the noise of chickens coming home to roost. One of the chickens is undoubtedly the rise in unit costs in our manufacturing industry under the Labour Government, when our unit costs rose by 100 per cent. as opposed to 13 per cent. in Germany, four per cent. in Japan and 35 per cent. in the United States of America. That devastated our manufacturing industry in competition with the products of other countries. It explains largely, but not wholly, the reason why our steel industry had so few customers left to supply.
Since 1979 there have been further reductions in the offtake from our industry by our steel users. As my right hon. Friend the Member for Taunton (Mr. du Cann) said, there was a 30 per cent. reduction in offtake from the motor vehicle industry, 18 per cent. in the construction industry and 15 per cent. in the engineering industry. There has been a total change in the pattern of trade and in the outlets for our industry. We must face up to that fact.
When we talk about user industries, we must realise that they employ a much larger number of people than the steel-producing industries. That is one of my main quarrels with the Government, as I mentioned in my resignation speech in May 1981—a fairly sizeable chicken is coming home to roost there. In that speech, I referred to energy costs, which have rightly been mentioned today by my
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hon. Friend the Member for New Forest (Mr. McNair-Wilson). I referred to the absence of any proper basis of competition between private industry and the State industry that my right hon. Friend the Member for Taunton (Mr. du Cann) mentioned today. I referred to the need for a national trade policy to ensure that we supported our own industries and that the conditions of trade were fair, equal and open. I also referred to doubts about the European Coal and Steel Community cartel.
I must tell my hon. Friend the Minister openly that my doubts about that cartel have been more than justified. There is no prospect of his maintaining, let alone raising, the price levels in that cartel when there is so much surplus of production and when user industries are unable to raise their prices to their customers.
No drop forger in Britain has been able to increase his price to our motor industry. Our motor industry has not been able to raise its price to the customer. There is literally no room for the steel price to be raised in those circumstances. The cartel is a vain occupation.
I do not know how a Conservative Government—in fairness my hon. Friend the Minister declared his embarrassment—came to be locked into that type of arrangement. It passes belief. Even more astonishing, if that is possible, is that the conditions of that cartel were not seen to be made to operate. We suffered the inequality of reduction in capacity and the inefficacy of the price fixing in our EC partner countries that has led to so much trouble with imports from the EC.
We shall have belatedly to tackle those problems. I make no apology for referring to them again. There must be a recognised and agreed basis of competition between the BSC and the private sector. It is no good the hon. Member for Workington (Mr. Campbell-Savours) arguing, as he did in an intervention earlier, that it was recognised that all the BSC subsidy was spent on restructuring costs. How would the hon. Gentleman explain, for example—the matter touches my right hon. Friend the Member for Taunton as a supplier—the BSC undercutting a private supplier in the West Midlands by £20 a tonne on a price that was previously agreed? That contract had been held for 15 years. The result was a loss of 5,000 tonnes of business by the private supplier. There is no reduction of BSC losses in such a case. Losses are only being added to and a private firm is being put out of business. There is no sense in that. That is part of the industry's structure problem.
I recognise that the Government are faced with an appalling problem when they consider the five major units. But it has already been argued most convincingly that customers will not be tied to the BSC as a monopoly supplier. They are bound to look for steel elsewhere. The more the private sector disappears, the more users of steel will look for it elsewhere. That is why I must question the philosophy behind trying to save the five major units at all costs. It will lead to great inflexibility in production and lack of service to the customer, whereas efficient units such as Round Oak, about which my hon. Friend the Minister is rightly worried, were able to supply effectively, flexibly, locally, rapidly and cheaply. But that company has deliberately been put out of business to save larger BSC plants elsewhere.
I foretold all that in my speech in May 1981. I said that attention should be directed to retaining a unit for the supply of engineering steels in the West Midlands and that the assets and facilities were there for that purpose. But as

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soon as an attempt was made to put that proposal into operation, the BSC immediately closed the ingot route at Round Oak. There is at present no basis for competition between the private sector and the BSC.
No wonder that there is such a lack of confidence and no possibility of investment. With respect to the Minister, whose efforts on behalf of Round Oak I admire, there is no prospect of private buyers taking over Round Oak unless the conditions for competition between the private sector and the BSC are defined.
My hon. Friend the Member for New Forest has dealt in detail with energy costs, but I should like to tie that subject in with what the hon. Member for Kettering (Mr. Homewood) said. I believe that he accepts that we must be competitive on the same ground rules, but there is no question of the ground rules being the same in respect of energy or trading policies. Industrialists in the West Midlands are becoming sick and tired of being lectured on the need to compete when the Government are responsible for so many of the conditions of competition.
That is why I have tried to be positive, helpful and supportive to the Government by outlining the essential need for a competition policy. There should be freedom of competition inside the country, which means no more discrimination against the West Midlands.—[Interruption.] I shall not be lectured by Labour Members about unemployment. Unemployment in the West Midlands is higher, both absolutely and relatively, than in Scotland. Therefore, I shall listen to no more special pleading from the Celtic fringe on the Labour Benches. We want freedom of competition both inside and outside the country so that we get a fair crack of the whip in trading practices. The Spanish tariff on motor vehicles is an obvious example. Only this morning, eight West Midlands Members went to the Department of Trade to urge such actions.
We are asking that the Government should be seen to be concerned. They should be seen to be standing up in defence of the British national interest. That is what people expect. I support the Government's policies. I wish them to succeed. I believe that their policies are capable of development to ensure that success. But we must be seen to be standing up for the British interest.
We want the same rules of competition to apply to energy, rates, water, telecommunications and so on. We must be able to compete on the same basis.
When the Government deal with this grave situation, they should stick to the principles that they have followed so far. If that decision is to be skewed on political grounds and there is to be a departure from the commercial basis of decision, truly we shall be swept away. The Government have in large measure—and I support them most strongly in this—made it clear to the people of this country that there is no escape from the need to compete internationally. By all means let the Government see that the rules of competition are fair and are observed, but at the end of the day there is no escape. Just as the consumer industries have to compete, so it is no use keeping employment and capacity going in the steel industry if the steel cannot be used. There must be users, so there must be competition and the decisions must be taken on that basis.
If it is perceived that the Government are giving way on their policy and that other, short-term considerations are to come into play, I am afraid that all the hard work and sacrifice of the past three years will be swept away.
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I understand only too well the regional and other pressures, but I urge the Government to stick to principle arid to uphold the national interest.
9.56 pm
Mr. James Tinn: At the beginning of the speech of the hon. Member for Bromsgrove and Redditch (Mr. Miller), I thought that the Minister could at last sit back and relax and listen to a few kind words from a Conservative Member. By the time the hon. Gentleman concluded his speech, however, he had disabused the Minister and the usual brickbats were flying.
It is significant that not one speech has given firm support to the Government's efforts on behalf of the steel industry. Some hon. Members have expressed appreciation of one or two attempts that the Government are making and expressed confidence that the Minister is doing his best, but no one expressed confidence in what the Government have achieved. The confidence of a few hon. Members in what the Government were likely to achieve thus rang a little hollow.
A few short months ago, no one would have thought that we should so soon be debating steel in such an atmosphere of crisis as we do today. The industry seemed to be set fair on course for recovery, although a very heavy price in jobs had been paid. Productivity was higher than ever and comparable with the best anywhere in the world. The chairman of BSC himself confirmed that. Energy costs—another major bugbear—were being reduced, although more needed to be done in that respect. Finally—and very important—in the larger plants, at least, the industry was running at 95 per cent. of its admittedly savagely cut capacity. Although no one at that time was rash enough to assume that the industry was finally clear of the rough waters through which it had been passing, the ship was answering the helm and making progress. That is not an argument. Those are the plain facts.
Now, however, just a few months later, the situation is transformed. The industry is limping along at only 63 per cent. of its much reduced capacity and productivity has crumpled, not through any failing on the part of the work force but as an inevitable consequence of the lower output. This has happened despite all the efforts of men and management which earlier in the year were showing good results.
I stress the sudden as well as the massive nature of this transformation. I urge the House to remember that we have a heavy responsibility to ensure that nothing is done that will have the effect of throwing away all that has been achieved to safeguard the future of the industry in some reaction caused by the disruption because of the recent massive surge—
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Steel

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Motion in the name of the Prime Minister for the Adjournment of the House may be proceeded with, though opposed, until Twelve o'clock.—[Mr. Lang.]
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]
  Mr. Tinn: There has been a reaction in response to the disruption caused by the massive and sudden surge in imports, a surge that must be, should be and can be short

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  term in its nature. I was relieved to find recently that the Secretary of State seemed well seized of this point. It is vital not only to the well-being but to the future existence of the industry and requires repetition.
  The Secretary of State agreed last week that the future size and shape of the British steel industry should not be determined by short-term order book considerations. I wholeheartedly agree, and profoundly trust that he will not allow himself to be pushed by the Treasury or anyone else from this manifestly sensible position. It is so clearly right that it should not require emphasis. Yet in this mad hatter world of monetarist economics, it certainly and sadly requires all the emphasis that we can give to it to drive the simple and obvious point home.
  So far I have spoken without referring to my constituency of Redcar, where one of the five large steel plants still left to us is situated. This is no oversight or negligence on my part but simply because I wanted to stress that the crisis now facing the industry is greater than any that has gone before. It is national, even international, in its scope and consequences.
  As I said to the Minister last week following his statement to the House, the days of what might be argued as healthy slimming in the steel industry are long past, and the time for surgery has long gone. What was once the surgeon's saw is now more the butcher's cleaver because the industry has been so trimmed and so slashed to the bone that any further substantial closure would call into question whether we can continue to have a steel industry at all.
  If the worst should come to pass, Sir Richard Marsh and his steel consumers will bitterly rue their desertion of British steel for imports that are subsidised and consequently cheap in times of depression. They will prove to be unreliable in price, availability and quality when economic activity and manufacturing activity eventually get going again.
  I owe it to my constituents to put before the House the full extent of their predicament. Up to now, I have been talking about what might come to pass in the steel industry if effective and well-judged action is not taken soon. However, the problems are not all in the future. Much of the misery—I am choosing my words with care and avoiding exaggeration—is with us now.
  Although it could be rather rash, if the Prime Minister were to visit Teesside she could meet any of the 12,000 youngsters who have no regular occupation and hear their tales of hopeless searching. The youth employment officer for Cleveland says that on an average day there will be no more than six vacancies in the area—12,000 youngsters after six jobs. They do not need good luck; they need a miracle if they are to find one.
  It is not just the young people who suffer. Teesside has the highest unemployment rate on the mainland of Great Britain after three years of Conservative Government. Many of us will have read the harrowing but accurate accounts in the Daily Mirror series earlier this month and the Financial Times on Monday. There has been a transformation and disaster in an area which a few years ago was the only growth area in the Northern region. I do not want to compete on Teesside's behalf for top place on some dismal league table of disaster. Other hon. Members are conscious of the massive problems in their areas. The stark facts have been spelt out not just in the newspaper
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  reports to which I have referred and in television and radio reports but most objectively and incontestably in reports published by Government Departments.
  I have touched upon the disaster that has already affected Teesside. A major closure in Redcar would be the equivalent, in social and economic terms, of a nuclear disaster. It does not bear thinking about. The result would be indescribable. Teesside has suffered job losses, but we are not alone. The devastation about which we have heard this afternoon ranges far and wide, but today we are interested in the steel-producing areas.
  I want to ram home to the Government the plain and simple truth that the people in those areas have had all that they can stand. A heavy price in human misery and worry has been paid to make the industry efficient. It will not be paid again. No steel industry in the world makes a profit without subsidies or some other form of Government aid. No one can expect the British steel industry to do the impossible under those conditions. Its collapse must be unthinkable. Its survival is essential. The Government must find the way and must consider the Opposition's proposals.
  10.9 pm
  Sir Anthony Meyer: I fully agree with the hon. Member for Redcar (Mr. Tinn) that it would be a mistake to base decisions affecting the steel industry on short-term considerations. In case anything that I might say suggests otherwise, I assure the hon. Gentleman that I fully share his vividly expressed anxiety about the hundreds of thousands of school leavers seeking a job in vain, which is particularly apparent in steel areas.
  It has been a remarkable debate. No speech has been more remarkable than that of my right hon. Friend the Member for Taunton (Mr. du Cann). He set an example of parliamentary good manners to us all in being present throughout a debate in which he spoke at an early stage. There is another right hon. Gentleman who does not appear to be here.
  However, I was surprised at some of the things that my right hon. Friend said. Let me summarise what I took to be his argument. He argued, first, that there must be no more steel closures and that the British steel industry had been clobbered enough.
  Mr. du Cann indicated dissent.
  Sir Anthony Meyer: I understood my right hon. Friend to say that we should not accept a plan that involved massive closures of our existing capacity.
  I fully accept my right hon. Friend's assurance that he is not a protectionist, but he then said that we should make arrangements to shut out subsidised imports. In a breathtaking transition, he then demanded that all subsidies to BSC should cease forthwith. I agree about that, but his first and last points are inconsistent.
  It is unwise for a major trading nation to embark on what must necessarily be the wholesale exclusion of imports. But if my right hon. Friend can explain how an unsubsidised BSC can maintain the vast bulk of its existing capacity, with or without protection against imports, I shall give him the "Stan Orme" prize for political lucidity.
  Each of us will defend jobs in our constituency. When speaking of the threat of imports we shall do so in unison; when speaking of the disproportionate cuts that our region has had to bear, we shall do so with harsh dissonance,

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  which was most noticeable in the speech of my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller). I am no exception.
  Steel making and processing in North Wales has been clobbered more savagely than in any other region. The shut-down of steel making at Shotton was the single biggest closure in Europe. When it was in the air, the steel plants of South Wales got off more lightly; their comeuppance came a good deal later. Although they did their best to fight for us in North Wales, understandably they were more anxious to save their jobs. I would not want to see Motherwell devastated, as North Wales was. I am more anxious to ensure that the all too few steel jobs left in North Wales in steel coating are safeguarded.
  My motivation is not only local patriotism; it is rational. The finishing operations at Shotton are competitive, but the steel making at Ravenscraig, for reasons that have everything to do with geography and nothing to do with any shortcomings of the labour force, will have the greatest difficulty in remaining competitive. But Shotton's production will cease to be competitive and on occasion, in the past, has ceased to be competitive when the hot rolled coil provided by other parts of BSC is too high in price, too low in quality or too late in delivery. There have been occasions when Shotton has had to use coil from other EEC suppliers. I cannot say that the comparisons have always been to the advantage of British coil.
  Mr. John Pennington of BSC says that BSC could be competitive without subsidy if raw materials and energy were supplied at prices as cheap as those paid by their competitors. I have no doubt that if BSC could import cheap coal from Australia it would be able to make much cheaper steel. A number of my hon. Friends have pointed out that BSC would be greatly helped if it could obtain electricity more cheaply. If, however, electricity suppliers were to provide BSC with cheap electricity they would presumably have to supply more expensive electricity to someone else. Otherwise they would run into a massive deficit to be funded by the taxpayer.
  Mr. Michael Brown: If the electricity industry does not take steps to ensure that its electricity is competitive, with the result that steel works shut, the electricity industry will have lost a customer.
  Sir Anthony Meyer: I take my hon. Friend's point. If it can be demonstrated that a lowering of tariffs to British steel will enable the electricity industry to achieve greater efficiency and reduce its costs I shall listen to what my hon. Friend says. I find his argument a little too glib to be true. It is, however, a valid argument.
  The argument that steel can be competitive if its input costs are lowered may be valid. But it cannot be confined to steel. The British car industry, most of the engineering industry, and also shipbuilding, as my hon. Friend the Under-Secretary of State for Scotland says, could improve competitiveness if they were able to obtain steel as cheaply as some of their competitors and if the tax bill for all those industries was not increased by the need to finance the deficit of the steel industry.
  Of course the steel industry is important. We need at all costs to maintain a steel industry that is big enough to meet our national needs in times of war or emergency. Above this minimum level, steel is merely one among many manufacturing industries. If the price of keeping
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  steel production at anything like its present level involves a crippling burden on the rest of British industry, we are getting our priorities wrong. The hundreds of millions of pounds needed to prevent any loss of jobs in the steel industry could possibly be used to create more and better jobs in newer industries.
  It is in this context that we should study allegations that our EEC partners are cheating on the Davignon arrangements. If they are cheating, they are spending their taxpayers' money, directly or indirectly, on propping up steel jobs that could be used in promoting newer industries.
  For us now to indulge, as hon. Members on both sides have done, in an orgy of recrimination is to divert our energies from both long-term and short-term measures to meet the crisis. In the long-term, we have to face the fact that the steel industry in western Europe will decline further as more and more developing countries turn to this labour-intensive, wealth-creating activity, for which many of them have the raw materials on their doorsteps. The long-term answer is to speed the process of industrial reconversion to the sunrise industries.
  In the short-term, we have to devise ways of making the transition as orderly and as painless as possible. That surely means using subsidies and protection to defend only those operations which are genuinely competitive and which are threatened by unfair competition strictly defined. Even that limited protection will require resources which will impose burdens on the rest of industry. It would be mad to squander those resources on seeking to fend off competition from within the EC, where the steel industries face exactly the same long-term problems as we do. To try to apply protectionist measures on a purely national basis, as was urged by hon. Members on both sides, would invite retaliation which we could not possibly meet on our own. The outcome of the negotiations with the United States over its attempted ban on steel exports from Europe surely proves that time and again.
  Greatly to my surprise, I find myself to some extent in agreement with my hon. Friend the Member for Southend, East (Mr. Taylor) who, in an article in The Times of 26 November concluded—it did him great honour, because it must have hurt him to reach this conclusion—that m the short-term the only effective way to protect the European steel industry was to have an effective European cartel—an effective one with a procurement agency centrally. In the short-term, it is the only answer. I emphasis "short-term", because in the long-term we must accept the fact that the steel industry is a poor bet in terms of saving jobs.
  We should be thinking about how we can bring about an efficient steel industry of the size that the economy of this country can afford. Quite separately, we should he thinking about how we can provide jobs for those who hitherto had drawn their living from the steel industry but for whom there is no long-term future. If anyone cares to come to north-east Wales, he will see the process already under way. It is a long, slow and painful process. The old jobs went out with a hideous rush, and the new jobs are coming in painfully slowly, but there is no mistaking the growing atmosphere of hope in the future which is beginning to spring up on the ruins of the old steelmills at Shotton.
  10.22 pm
  Mr. Robert Litherland: To me, as a newcomer, this has been a remarkable debate. I wonder how many right hon. and hon. Members can remember such a one-sided debate. Because there is not to be a vote, we have heard Government Back Benchers in particular speaking their minds. Speaker after speaker condemned the Government's policies, and the right hon. Member for Taunton (Mr. du Cann) and the hon. Members for Brigg and Scunthorpe (Mr. Brown) and for Dudley, West (Mr. Blackburn) adopted solemn moral attitudes because of the effect on their constituencies. Government Back Benchers have tonight begged their Front Bench to take action to save the steel industry.
  I trust that the Government have seen the light. Conservative Back Benchers have seen the devastation that their Government are causing. The speeches that we have heard tonight are not just symptoms of election neurosis. The hon. Member for Brigg and Scunthorpe sees his position waning, and the hon. Member for Dudley, West, who told us that he went to the dole queue, is getting in some practice for the general election.
  Mr. Michael Brown: The hon. Gentleman is new to our debates, but his contributions are always welcome. However, if he thinks that there is any electioneering by those hon. Members who represent a steel constituency, as I have done for some eight years, let me assure him that we judge the issues purely on the merits of the industries in our constituency. We are not worried about our popularity. I have never given a damn for my popularity in Scunthorpe or elsewhere. I am concerned about the steel industry.
  Mr. Litherland: I thank the hon. Gentleman for that assurance. It is a pity that we shall not go through the Lobbies tonight, because had we done so we should have seen which side he was on.
  I come from a part of the world—Manchester—that has had famous metal-based industries. There used to be heavy engineering in Manchester, which was world renowned. I am afraid that the Trafford Parks of this world have been decimated and are part of history.
  The debate is epitomised by the position of two firms in my constituency—Manchester Steel Limited and Richard Johnson and Nephew Limited. The future of both those companies is in doubt. Manchester Steel Limited teetered on the brink of closure only a few short weeks ago, having suffered from the world recession in steel, which was compounded by the Government's monetarist policies and the problems of import dumping, high energy costs and high exchange rates. Urgent action had to be taken.
  The board of directors was presented with two options. It could accept an offer of £16 million by a private unnamed consortium, assisted by Government money, to close down. That would have meant a loss of 810 jobs. Alternatively, it could accept a survival package which was put forward by the management, the workers and the trade unions. Even that entailed about 170 redundancies—one-third of the work force. It would also have required a wage freeze, an increase in efficency, and a saving of between £2½ million and £3 million in the coming year.
  Manchester Steel Limited, like other firms that have been mentioned tonight, was viable. As a result of a recent
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  outlay of millions of pounds of capital expenditure, it was an efficient steel-making firm with a high productivity rate. However, that efficiency and capital investment could not compensate for the high subsidies that were being enjoyed by steel industries in the EC and elsewhere. The managing director told me that the selling price for bar and rod was £170 per tonne in October. That dropped dramatically by £30 per tonne in November.
  Manchester Steel Limited is owned by Elkem—a Norwegian-based firm. The local management went to Oslo and invited the full board to visit Manchester to look at the firm for itself. It came to Manchester to evaluate the two proposals that had been put forward. It had to decide whether to accept the survival package or the £16 million, which must have been a tempting offer. It was thought that it would grab the money and run.
  However, the board met the trade union representatives, the local management, the workers, Members of Parliament and also members of Manchester city council, which had thrown its weight behind the company. Manchester city council knew that if Manchester Steel closed down there would be a rate loss, more people would be on the dole, more people would want social services and there would be more in need. It also knew that when such services are provided by the rates the Government engage in a clawback operation. The council, therefore, had a vested interest in what happened.
  After a top-level discussion, the survival plan was accepted. The workers had met the criteria set down by the Government. They had rather reluctantly accepted wage restraint, redundancies and rationalisation. They had made every effort to save the firm. They had made the sacrifices about which the Secretary of State for Industry keeps talking. What could they expect in return? My right hon. Friend the Member for Manchester, Openshaw (Mr. Morris), along with Councillor Flanagan, who is a member of the city council and employed as a personnel and training officer at a steel works, and myself met the Minister. He merely said that the action by Elkem had put the cat among the pigeons and that the company would have to slug it out in the market place. In spite of all the efforts that had been made, the company's prospects still appeared gloomy.
  Only a few yards away from the company there is Richard Johnson and Nephew, a firm that is over 200 years old. It is a renowned family firm, producing some of the finest wire. It has a unique technique of making galvanised steel, and if it closes, it will not be possible to reproduce that technique.
  It is cheaper for Richard Johnson and Nephew to import steel from South Africa, Poland, Japan, Spain and the rest of Europe than to go to a steel-producing firm only a few hundred yards away. We have listened to Conservative Members talking about competition, but they are not comparing like with like. We cannot compete. The arguments of Conservative Members are merely excuses.
  As part of the rationalisation programme, a commission was set up to assess the conditions of the market and the future of the wire manufacturing industry. The object was more rationalisation. The consultants, Touche Ross, have produced a document which is being reviewed. Richard Johnson and Nephew fears, and the workers fear, that there could be a closure. That will mean that the rationalisation programme will have hit Richard Johnson and Nephew.

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  Richard Johnson and Nephew are owned by a South African company—Cape Gates. It is feared that the South African company will be in the same situation as Manchester Steel's Elkem board was a few weeks ago. Will it accept a money offer and close down Richard Johnson and Nephew? No survival package has been assembled by the South African parent company. Mendle Cape has has been in possession of Richard Johnson and Nephew for about 18 months of its 200 years of existence. It will have paid back only a fraction of the loan debt in purchasing the three mills of Richard Johnson and Nephew, Ambergate and Steelrods.
  If the Government's money is accepted, Richard Johnson and Nephew will be closed and the money will be used to buy outright the other two firms which came into the company's ownership, which are Ambergate and Steelrods at Derby. In other words, public money will be given to a South African firm to close down a firm of 200 years' existence and to purchase two wire manufacturing firms in Britain. Can it be in the public interest to use public money in that way? How can our companies exist following the signing of the Treaty of Rome and the abolition of import controls? We know that imports are flooding into Britain.
  The Joint Industrial Council has given its views. It says:
  "British steel makers whose products were defined under the Treaty of Paris enjoyed assistance from the EEC whereas British wire manufacturers whose products were defined under the Treaty of Rome were not eligible for such assistance."
  The importing of steel and the price increases have had serious effects on the wire industry. The Joint Industrial Council says:
  "There was a real chance that wire prices would deteriorate still further in 1982 having regard to the extremely keen competition from overseas wire manufacturers, weak European currencies against sterling and substantial overcapacity in the United Kingdom. The United States market was very depressed and overseas wire manufacterers were looking for other markets. The United Kingdom market was very attractive to them."
  The Joint Industrial Council is gloomy about the future. It says that wire imports of hard and mild steel for 1971 were 8·7 per cent. and in 1982, 53·2 per cent. and rising. The Government talk about competition. What chance has Richard Johnson and Nephew to compete in that atmosphere, and what does that mean to Manchester Steel? If Richard Johnson and Nephew closes, Manchester Steel's efforts for survival will have been in vain. It will mean a reduction of 20 to 30 per cent.—400 to 500 tonnes each week—in the amount that Richard Johnson still takes from Manchester Steel. If the firm closes, it will be disasterous for the community.
  In my constituency, more than 34 per cent. of the people are unemployed. Manchester, like Sheffield, is becoming an industrial wasteland. It is estimated that the closure of just one firm will mean another 2,000 lost jobs in allied industries. If that figure is multiplied by the number of people in the families involved, one gets an idea of the effects of the closure.
  As my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) said in his excellent speech, we are seeing not only the closure of factories but the deaths of whole industries. This is not like the slumps of the past, when the machinery and skills were still there. When the trade cycle had been completed, skilled men were taken on again. Those days have gone. Not only firms and industries but whole communities are closing down.
  The Minister, especially in a statement of a week or so ago, spoke of sacrifice. Manchester Steel has made the
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  sacrifice, but if such firms are not allowed the same facilities in competition they will surely go to the wall. That is criminal.
  A great deal has been said today about survival. Under this Government Britain is committing suicide. Our children and inheritors will never forgive us. We want, not good intentions, but action from the Government. The workers in the steel industry live in fear not only for their own future but for the future of their families.
  I hope that the speeches that we have heard today are sincere and not simply platitudes, and that the bouquets handed out are not just flowers on the grave of the steel industry.
  10.38 pm
  Mr. Richard Page: In the late 1970s, it was my privilege to represent a steel constituency and I gained a great interest and concern for the industry. That genuine concern has been expressed by both sides of the House.
  In my brief contribution tonight, I shall refer to the past. In the past decade, and particularly before 1979, the steel industry has become a political shuttlecock that is lobbed backwards and forwards by both major parties to the detriment of the steelworkers and the management. The industry is paying for those political decisions now.
  Vast sums were invested and billions of pounds of taxpayers' money were spent, although there was little interest in efficiency or in whether the man-hours were right. The penalty is now being paid.
  I could produce many examples. One need only consider the Beswick closure programme and the rime that that took. It was far too long. On the question of price controls—this point tells against us on this side of the House—controls were imposed on our steel products, so stockholders sent the goods abroad and the same steel was then reimported. Our steel users were thereby paying more for the products that we were producing. Hon. Members should consider the slowness of investment decisions. It cost us more when we eventually got round to introducing the much-needed improvements.
  I shall take the year 1977–78, although I could give many other examples. We lost a mere £443 million and BSC said that 40 per cent. of that loss was due to overmanning, that 20 per cent. was due to the slow implementation of the Beswick review, and that 40 per cent. was due to the recession. Efficiency was bad and the man-hours per tonne produced were appallingly high. That was a byproduct of politics, and I do not blame the steel workers or the industry. During that period, the private sector was operating and sheltering under that umbrella of prices provided by the BSC.
  However, in 1979 Mr. MacGregor arrived to do a most difficult job at probably the worst time that could have been chosen. Losses were running at about £10 million a week. I pay tribute to the wonderful work that Mr. MacGregor has done and to the difficult decisions that he has made. [Interruption.] If the hon. Member for Sheffield, Hillsborough (Mr. Flannery) will allow me to make my point, I may move a little way towards the aims that he has in mind. However, I do not think that there will be a meeting of our minds, because I do not think that they will ever come together.
  At that time, it was taking 14 man-hours to produce 1 tonne of liquid steel. Since 1979 there have been dramatic improvements, and the man hours are now in single

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  figures. Such an improvement in three years is, indeed, dramatic. The latest figures that I have for the amount of crude steel produced per process worker are for 1981. We produce 250 tonnes per process worker. We have a long way to go before we catch up the opposition. West Germany produces 297 tonnes per process worker, and Italy produces 313 tonnes. However, a few years ago we would have been nowhere near that 250 tonnes. Therefore, there has been a remarkable improvement.
  Unfortunately, those improvements occurred during a world recession. There are now about 76 countries producing steel. In the 1950s, only 32 countries produced steel. Another factor to consider is the lack of production capacity curtailment within the EEC. Let us compare our production levels with those in Germany. We have roughly the same size populations. We produce about 14 million tonnes per annum, while the Germans produce 37 million tonnes. Some curtailment will have to take place across the water in the EEC, rather than in Britain.
  If we look at the closures that have taken place over the past three years, we see that we started from a basis of more inefficiency and more manpower, but our manpower has now dropped by about 41 per cent., Germany's has dropped by 11 per cent. and manpower in France, which is the nearest to us, has dropped by 16 per cent. We started from a higher inefficiency, but others in the EEC should start to take the brunt of some of the closures of capacity.
  My worry is that, if what we are doing is allowed to continue, it could become a self-defeating spiral when lower demand means lower efficiency of the plants, lower efficiency of the plants means lower production, lower production means losses and losses mean closure. We could find that we spiral downwards to zero.
  My hon. Friend the Member for Flint, West (Sir A. Meyer) mentioned the sunrise industries. I am all for seeing our industries develop and grow in new areas of technology. I know that new technology means jobs. However, in new technology, other countries are already there. The new areas that we will have to fight in will be just as tough as steel. When we start to take on Japan at its products, there will be a tough fight. Therefore, we must stay in the production of steel for motor cars and white goods. As my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) said, our steel must be used. That is the only way in which we shall use that steel.
  That means that we shall have to retain a bedrock level of production. I have great sympathy for my hon. Friends on the Front Bench. They have been deluged with advice, cajoled and in some cases almost bullied about what they should do. I am unhappy about import controls. They would not work. They are usually a short-term solution. They are not often used so that there can be reconstruction, but they become a reason why improvements should not be carried out. That provides only a temporary respite before the problem returns in a greater and more virulent form.
  We have made more sacrifices than anyone else in the EC. Of course, we must continue to improve our efficiency. That is only natural. However, our production per head is the lowest in the EC. The obligation is now on the EC to provide a market with more favourable competition for our British steel industry to survive. It must show the people of this country that it means
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  something. Our steel production can stay in existence if the EC, with Ministers pushing it, can give our steel industry a chance on the capacity levels. We have made the sacrifices so I urge my hon. Friends the Ministers to make the EEC confound the sceptics who have been critical of it this evening.
  10.47 pm
  Dr. Jeremy Bray: There was a meeting this afternoon between Iron and Steel Trades Confederation representatives and the British Steel Corporation in the preliminary round of the annual wage negotiations. At the meeting the representatives were told that BSC's aim—which was carefully phrased by the corporation's spokesman and carefully noted by the ISTC representatives, and of which I have seen the written record—is to reach a cost structure that breaks even at 200,000 tonnes per week, which is 10 million tonnes a year, at 70 per cent. capacity working, assuming retained capacity of 14·4 million tonnes, to be achieved with further small closures and a further reduction in manpower, with production pauses likely to continue. In other words, the representatives were told that BSC is not contemplating a major closure as the outcome of the review.
  I have never believed that a major closure would be the consequence of the present review. I welcome the realism of BSC representatives effectively telling that to ISTC members while the Government go through the pirouette of pretending that they are going through a major review with cataclysmic possibilities. But that conclusion leaves many questions unanswered. The first is that of mothballing. That is effectively closure, as no mothballed steelworks is ever reopened. It has been dismissed as an unacceptable solution for any of the big five, certainly Ravenscraig. Then there is partial closure. It is suggested that the second blast furnace at Ravenscraig might be closed or that the strip mills at Ravenscraig and Gartcosh might be closed. That would leave Ravenscraig as a plate producer which would be quite unviable in cost terms. Nor would Ravenscraig be viable simply as a finishing plant without steel-making capacity.
  The other possibility that might be aired is to cut off all of the ancillary processes which are unique to Ravenscraig to make it the most highly equipped steel plant in Europe. The de-sulphurisation, argon flushing, vacuum degassing, and secondary steel making are precisely the facilities that equip Ravenscraig to supply products that cannot be supplied from elsewhere within the BSC and, indeed, hardly within Europe.
  Ravenscraig is the best located steel works in Britain to supply 64 per cent. of its market. If it were closed, 64 per cent. of its present deliveries would have to travel a greater distance than they do at present.
  In the second quarter of this year, when Ravenscraig still had a decent order load, it achieved 4·45 man-hours per tonne in output on the EC standards compared with the best corporation average for any month in this year of 8·8. On present plans and on a 1·8 million tonne order load, Ravenscraig will be achieving four man-hours per tonne by the middle of 1983 which is easily the best in the United Kingdom and comparable with the best in the world.
  With regard to other associated costs, the Scottish Office has achieved a small reduction in the cost of

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  electricity, and freight charges are in the process of being negotiated downwards. A considerable cost reduction is possible right across the board from suppliers.
  The Minister of State challenged my right hon. Friend the Member for Salford, West (Mr. Orme) to say how much steel would be produced under a Labour Government. My right hon. Friend wisely refused to give him an off-the-cuff answer. Nevertheless, it was a good question that deserves a properly researched reply. My right hon. Friend the Member for Stepney and Poplar (Mr. Shore), the Shadow Chancellor, has produced a far more detailed and closely argued case for industrial recovery than any previous Shadow Chancellor.
  The Minister of State asked us to go further. We should do that. He asked what the implications of that plan were on the demand for steel. I shall do my best to persuade my right hon. Friend the Member for Stepney and Poplar to answer that question. It is necessary—it is helpful to us—to demonstrate the complete credibility of the recovery strategy that my right hon. Friend has demonstrated and which privately some, perhaps not all, Ministers in the Department of Industry believe to be possible and necessary.
  The answer is needed to show the voters where the jobs will come from. That should also be examined industry by industry. I am confident that the answer will fully justify the retention of 14·4 million tonnes of capacity. Looking at the matter off the cuff, which I am glad that my right hon. Friend the Member for Salford, West did not, there is scope for a 25 per cent. increase in output due to a recovery of market share and scope for a 25 per cent. increase in the market. That is the increase in manufacturing output over the five years under the strategy that my right hon. Friend the Member for Stepney and Poplar published recently. It compares with an increase in manufacturing output under the Tory policy—simply the EIU basic medium-term forecast on the assumption of continued present policies—of only 6·8 per cent. in the next five years. That gives a 50 per cent. increase to 15 million tonnes a year, which fully justifies the retention of the nominal 14·4 million tonnes at which BSC capacity has recently stood. We recognise that even if steel output was increased to 20 million tonnes a year—which is possible—from the retained plant inventory, there would be precious few more jobs in steel. Steel areas such as Motherwell and Wishaw entirely accept that recovery from the 25 per cent. levels of unemployment—50 per cent. in some parts of the town—from which they now suffer will come only from the growth of other industries. It would, however, be murder to destroy such steel jobs as are left.
  Having attempted to respond to the Minister's challenge, I pose an equivalent challenge to him. I referred to the absymal economic case in the document on the closure of the bar mill at the Craigneuk works. I asked Mr. Derek Bray, who is, I am afraid no relation of mine, to confirm that this document came from the BSC headquarters. He said "Yes." If we wish to deviate from these figures, we must make the case for doing so. Furthermore, the figures have been seen by the Department of Industry as part of the annual review of cash limits for the nationalised industries.
  That document contained appallingly stupid statements, such as that there would be no change in the exchange rate and that there would be a continuing increase in the import penetration of cars and so on. I have
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  never seen a more pathetic set of arguments. The extraordinary thing is that that document, on which the BSC is now working in making these closures that have been left to its discretion, is based on only one GDP forecast—the medium-term EIU forecast which my right hon. Friend the Member for Stepney and Poplar described as the Tory case.
  There is no use in the document of any model that could have traced the impact of alternative exchange rates or rates of growth on the pattern of growth in different industries and on the level of steel demand. That has not been examined by the BSC as the background for any of the closures that it is now making. It is outrageous that the Government should be giving BSC a free hand when they know that this kind of thing is going on. It has occurred because of the defeatist atmosphere that the Government have generated in British industry, such as the appalling attitudes to the maintenance of the broad economic strategy.
  The Government propped up the exchange rate in September last year and did so again last week. The Prime Minister said that it was simply a response to market forces. I am astonished that intelligent people such as the Minister of State should consent to remain in a Government who murder British industry in that way. People such as the Minister of State will look back on their membership of this Government just as others did on their membership of the Government responsible for Munich, only this is a far greater betrayal because it is done consciously and deliberately. They have destroyed British industry right across the board.
  The Department of Industry should take up the challenge mounted by my right hon. Friend the Member for Stepney and Poplar. It can have the full computer printout of all 64 tables in the Treasury forecast. It can trace that through to the inter-industry effects in the Cambridge Econometrics model which the Department of Industry uses but which the BSC does not. It should produce the levels of steel demand that will result from that, and it should say whether, with a 50–50 chance of its Labour strategy that is implemented after the next election, there is not a cold economic case that steel closures should be stopped forthwith.
  I do not believe that the Government are doing that kind of work. Nothing that any Minister has said gives me any confidence, and none of the inquiries that I have made in the economic trade suggests that the Department of Industry is asking that kind of question.
  The case is overwhelmingly for leaving the basic capacity of the industry intact, but there is also the specific case of the small works that many of us have in our constituencies. In addition to Ravenscraig, my constituency includes Craigneuk works where 427 steel workers are to be made redundant with the closure of the bar mills. Those workers have until Friday to produce an alternative solution. I believe that such a solution is fully justifiable if the special market which they supply is understood. In the small-batch, under-one-tonne market for engineering steels, the big bar mills simply cannot compete. It might be different if the big mills had large warehouse stocks and quick deliveries, breaking down 100-tonne lots, but history has proved that Craigneuk has a loyal band of customers and there is certainly a market for its products.
  The pessimism that the Government bring to this review of the steel industry, their irresponsibility in having landed

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  the industry in this condition and the suggestion that the decisions that they will undoubtedly make to preserve the big five are merely political decisions when they are absolutely necessary if there is any shred of confidence in the economic future of Britain have gravely damaged the morale, the performance and the prospects of one of our basic industries.
  The Conservatives, for all their cackle about new technology, seem not to understand anything about the challenges that will face the world as oil supplies run out at the end of the century. If the introduction of the hydrogen cycle, the replacement of oil, and so on, are faced by a poor, badly organised and industrially disrupted world, the necessary world-wide adjustment will be a very difficult process. The Government do not begin to understand the meaning of that challenge, which our children will have to face, with the policies that we have to follow today.
  11.1 pm
  Miss Joan Maynard: I am pleased that the Minister of State who opened the debate is present, as he said a great deal about overcapacity when he should have been talking about under-consumption caused by the Government's actions in destroying our industry and making it impossible for it to buy the steel that is produced.
  The right hon. Member for Taunton (Mr. du Cann) made a very interesting speech. It seemed odd that he should complain of the hostile environment in which our steel industry has to operate, as that seems to be the natural environment for the kind of society that he supports.
  The gravity of the situation in the steel industry cannot be overstated, as speeches from both sides have made clear. If capacity falls much further, we shall no longer have a viable steel industry. As my right hon. Friend the Member for Salford, West (Mr. Orme) said, if production falls below 10 million tonnes the industry will no longer be viable. I believe that that is generally accepted throughout the industry.
  Much has been said today about saving the five major plants, but surely we need to save the whole of our industry and not just those five plants. Indeed, many of us believe that we might have done better to develop our industry differently and, rather than building those huge plants, to have had smaller, more flexible units. However, it is always easy to be wise with hindsight.
  Whenever we meet Mr. MacGregor, we are told that with one more closure or so many more redundancies we shall be able to balance the books. It seems to me that we shall be able to balance the books only when we have closed the steel industry. That would be a tragedy, because the steel industry is a basic industry of our industrial society. Therefore, our wealth as a nation is based on it.
  We know that there is a recession in the capitalist world, but the position in Britain is made much worse by two things—our membership of the Common Market and the Tory Government's monetarist policy. The lack of demand for steel from our home market flows from lack of investment in our railways and the lack of demand from mines, cars and the aero-space industry. What has been done to our industry by the Government has had a dramatic effect on demand for steel in the home market.
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  The crisis is not due to striking workers. One of the most serious issues for Britain is the import of steel from EC countries. Imports of steel on a massive scale are destroying the British steel industry. From January to July 1981, as compared with January to July 1982, there has been an increase of 40 per cent. in steel imports. Of the total imports of steel to Britain, for example, of an average of 349,000 tonnes a month, 233,000 tonnes—or 67 per cent.—were from the EC.
  There has also been a problem of imports from the United States. However, the real problem comes from the EC countries. Since we joined the EC, industrial output in the United Kingdom has fallen by 16 per cent. Under the rules of the so-called free competition of the Treaty of Rome we have suffered an unrestrained onslaught of industrial competition from the strongest economies in the EC, notably, West Germany and the powerful multinational companies, which have been facilitated by the EC.
  In the past few days, many more jobs have been lost in our steel industry. Whether the jobs are in Scotland, Sheffield or wherever, we must stick together and not allow them to split us up, remembering always the truth of the statement that an injury to one is an injury to all.
  The steel workers should seriously consider sit-ins at plants that are threatened with closure, for once they are outside the factory, how do they get back inside? I appreciate that this means stopping taking redundancy money, but this is very important. I know that it is easier to say this than to do it. However, taking redundancy money is not only selling out their jobs but selling out the jobs of the next generation.
  If the steel industry and the jobs are to be saved, the battle has to be conducted. The triple alliance must be made a reality. The workers and the labour movement, including all Labour Members, must be as single minded for our people, the working people, as the Government are for their class, and the Government have given us an object lesson in how to work for one's own class.
  A Scottish steel union leader describe this accurately when he said that what is going on is
  "industrial gangsterism at its worst."
  That puts accurately what is happening to our industry as a whole, and particularly to the steel industry.
  Davignon is now making it plain that his thinking on the future of European steel has evolved into a strategy that goes well beyond the safety net. What is behind this thinking? Does it mean that much more money can be made by producing steel in south-east Asia and South America where wages are low and safety regulations much less tight than they are in the Western world and this country?
  The United Kingdom has taken more than its fair share of cuts in capacity and jobs in order to restructure the industry. Great Britain's closure drive has put it far ahead of its EC partners and accounted for one in every two redundant steel workers. When will Ministers stand up for Great Britain, not just over the Falklands, but to protect our jobs and industry? We have closed down at least 33 per cent. of our capacity, France 15 per cent. only and the remaining EC countries have made hardly any closures. That is scandalous and a sell-out by those people who are always telling us what good patriots they are.
  If the import-export ratio continues at the present rate we are heading for a large deficit in our trade in steel products which is astounding. There has been increasing

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  penetration by special steels. Sheffield excelled in special steels, but the city has become a desert and the work force is being destroyed.
  When Great Britain joined the Community, United Kingdom producers had to increase their prices to bring them into line with the EC ruling. Great Britain's EC membership exposes the British steel industry to powerful competition from European producers who are generally larger than all the United Kingdom producers except the British Steel Corporation. That company had not then brought its major new investment projects on stream. That meant that from the start the British steel industry was in a weak position compared with its European competitors. As the crisis began to deepen, the producers' response was to strengthen their cartel. There is an inherent tendency for the strongest members of any cartel to exceed their quotas and cause problems for the weaker members.
  Lack of Government support for the British Steel Corporation economically and politically has further weakened the position of the British Steel industry within the EC.
  We do not need Gaston Thorn and his well-funded circus to come here to tell us of the so-called benefits of our membership of the EC. We know from hard and bitter experience what it has meant to our workers and industry. We have lost our sovereign control over investment. It is shocking that we are being told that we must make further cuts in our steel industry or we shall not be given the investment that we urgently need.
  Unless the Government are prepared to fight to retain our steel industry—capacity cannot fall much lower or it will not be viable—we shall be in a sorry state. The best thing that the Government could do to help our steel industry would be to take Great Britain out of the Common Market. As that is not likely, we ask for import controls. I do not like to ask for them. I should prefer the Government to give the same help to our industry as is given to that of our competitors. We have modern works and excellent workers. They can and will compete if they can compete fairly, and if there is anyone to whom they can sell their products. The solution rests with the Government. If they will not act, they will be removed; and that cannot be too soon.
  11.14 pm
  Mr. Allen McKay: I wish to reinforce the arguments of my colleagues, particularly those from Sheffield. Like all last speakers, I shall leave the best bits of my speech for another occasion. I shall bring them out of mothballs while the steel industry is in danger of going into mothballs.
  For a long time the Government have been warned of the growing crisis in BSC, not only by the unions but by chairmen of BSC and representatives of the private sector in the British Independent Steel Producers Association. The Government had information about the imports which have now turned into a raging flood from Brazil, South Korea, Austria, South Africa and other EC countries. Imports from Brazil have risen sevenfold, from Korea two and a half times, from France and Italy by over 50 per cent., from Spain by 89 per cent. and from Poland by 95 per cent. The import of tooled and special steels upon which Sheffield depends now covers 82 per cent. of the British market. The import of steel of all categories is about 30 per cent. Our car imports bring the total up to 60 per cent. Those imports have sounded the death knell of
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  our steel industry as we have known it, both in the public and private sectors. Sheffield's industry has been based on 50–50 co-operation between the public and private sectors, which have worked well together.
  The factors behind the problem are a lack of control over the steel stockholding which allowed imported steel to be offered at discount prices; foreign suppliers using extended credit facilities; the fact that foreign supplies could be taken now and paid for when the product was sold; the issue of credit notes against alleged poor quality claims; and transmission from port of entry to site at no extra cost. Those factors have combined to offer even cheaper steel to the United Kingdom market. Other countries also have considerable energy and transport subsidies, and training and research costs are borne by their Governments, whereas for us they are a cost on the industry.
  Imports have risen by 25 per cent. since 1981, while the home market has dropped from a target of 52 per cent. to 43 per cent. The United Kingdom industry is being destroyed while our European competitors ensure that their capacity remains.
  That fact is illustrated by the figures for the period between 1975 and 1982. The United Kingdom production in 1,000 tonne units has decreased by 24 per cent.; Germany's has risen by 5 per cent., Italy's by 24 per cent. and France's has decreased by only 1 per cent. The British industry has borne the brunt of the cuts while our competitors have produced a glut. It is like a man saying that incomes can be redistributed by sharing the money equally, but when he has spent his it should be shared out again. Unemployment in our industry has increased while Europe has maintained its capacity, ready for the upturn which we shall not be ready to participate in.
  Barworth Flockton at Ecclesfield produces fine, high quality steel. It has to shop in the same market as its competitors and pay the same price for its ingredients. Even taking out rolling and wages costs, it cannot compete. That shows the extent of the subsidies given by other countries.
  The new Concast at BSC Stocksbridge can make steel at £20 a tonne cheaper than anyone else. It depends on a home market that no longer exists. Unless that market is recreated, one of the most highly efficient and productive steel units in Europe is likely to go under. I am confident about the survival of BSC at Stocksbridge and Tinsley Park. Both are modern plants with an excellent work force.
  Ireland Alloys extracts special alloys from scrap steel. A plant that it established in my home town some time ago is having to close because of the rundown in BSC. It is moving from a low rated area to highly rated Sheffield. The decision belies some of the arguments employed about rates.
  The Government have failed miserably to protect British steel and industry generally. I could have argued that it was time for them to resign. They would not have listened. I suggest instead that it is time they took protective measures to save one of our basic industries.
  11.21 pm
  Mr. Harry Ewing: I recall only one debate that resembles our proceedings today. In the early days of the Government, the then Secretary of State for Industry, who is now Secretary of State for Education and Science, presented to the House a proposal that Ferranti should be sold to GEC.

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  Like today, Ministers wished to hear the views of hon. Members expressed in debate. Again like today, not one hon. Member supported the Secretary of State's proposal. Fortunately, the then Secretary of State showed more sensitivity than he has shown over many other problems and did not proceed with the proposal.
  The right hon. Member for Taunton (Mr. du Cann), to whom I pay tribute, as the hon. Member for Flint, West (Sir A. Meyer) did, for remaining throughout the debate after he had been called as the first Back Bencher to speak, told the Government in no uncertain terms that the British Steel Corporation's proposals were not acceptable. The advice of the right hon. Gentleman, the chairman of the 1922 Committee, is that the Government should not bring the proposals before the House in the form presented to them by the BSC.
  The hon. Member for Edinburgh, South (Mr. Ancram), who is chairman of the Conservative Party in Scotland, also told the Government in no uncertain terms that any proposal to close the BSC plant at Ravenscraig would not be acceptable to any part of Scottish opinion— political, religious or cultural. The chairman of the Scottish Conservative Party has advised the Government not to bring any such proposal before the House.
  I submit to the Under-Secretary of State for Scotland that the chairman of the 1922 Committee and the chairman of the Scottish Conservative Party represent a powerful Back-Bench combination. I should have thought that any junior Minister with an eye on his career prospects would take account of the remarks of the right hon. Member for Taunton and of the hon. Member for Edinburgh, South.
  It is the nature of Government Departments that, when a Secretary of State knows that his Department is in for a hiding, he does not come near this place. He sends his junior to take the beating and to carry back the message "You really cannot do that, Sir." That is the message that will go back to both Secretaries of State tomorrow—although I have seen the Secretary of State for Scotland popping in from time to time today.
  I draw the attention of both Ministers to the fact that even during the two-hour break, over the dinner table, no doubt with the encouragement of a bottle of good quality wine—
  Mr. du Cann: Cider.
  Mr. Ewing: The right hon. Member again declares an interest—the Government were unable to persuade any of their Back Benchers to support their proposals.
  It is important to set the debate in context. The Minister of State said that the purpose of the debate was to hear the opinions of right hon. and hon. Members from both sides before the Government came to a conclusion on the proposals put to them by the British Steel Corporation, particularly in relation to the big five plants as they have been called.
  The House has expressed its opinion. It would be a negation of democracy if the Government came forward with proposals that were contrary to the unanimous opinion of the House of Commons. There is no point in the Minister of State shaking his head. He is struggling hard to find support.
  Mr. Norman Lamont rose—
  Mr. Ewing: I shall not give way. I have an agreement with the Under-Secretary of State for Scotland and, if anyone needs time to explain himself, he does. I shall not deny him that opportunity.
  I emphasise what my right hon. Friend the Member for Salford, West (Mr. Orme) said. We expect—in fact, we demand—that the statement is made—we hold the Secretary of State for Industry to his promise—before the House rises for the Christmas Recess. Following the statement, we demand a debate on the Floor of the House and an opportunity to express our opinions in the Division Lobbies that evening. We shall then see the depths of sincerity that go with the words that have been spoken today. A warning was also sounded by the hon. Member for Brigg and Scunthorpe (Mr. Brown).
  I was encouraged to hear my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) say that he had spoken to the representatives of the ISTC following their first discussion with the BSC on the new round of wage negotiations. The House will have listened with interest to my hon. Friend's report of the meeting. Apparently the BSC assured the union that it intends to maintain all the big five plants and that it wants to maintain output at 16 million tonnes per annum, with only some small closures. I regret even those small closures.
  I was very interested to hear the report that my hon. Friend gave to the House. He will not object to my saying that the report conflicts strongly with what the chairman of the BSC, Ian MacGregor, said when he was in Scotland on Friday and Saturday last week.
  Senior management from the west of Scotland have sent me a document which I suspect many hon. Members received today. It arises from the meeting that they had with Ian MacGregor on Saturday. To their credit, they decided not to make any comment until they had met him. They begin by expressing their fear that the Ravenscraig-Gartcosh plant has been singled out for closure. They say that before they made any comment they wanted from the chairman
  "the facts regarding the well-publicised options for the future strategy of the BSC and when the basis of such options might be made known."
  That meeting was held on Friday 26 November.
  I shall quote from the letter, because I am anxious to put in context what my hon. Friend the Member for Motherwell and Wishaw has reported from the meeting between the BSC and the unions today. Senior management said that
  "it was confirmed by Mr. MacGregor that the complete closure of the Ravenscraig-Gartcosh plant was an option now before the Government for consideration".
  My hon. Friend the Member for Motherwell and Wishaw rightly dismissed the option of mothballing. The hon. Member for New Forest (Mr. McNair-Wilson) also said something about the possibility of that. It is ludicrous to suggest, first, that one can reduce a three-furnace operation to one. That is not on, because it must be fairly obvious that if the one furnace happened to go the whole plant would go. The flexibility is not there. In any case, two furnaces cannot be mothballed without mothballing many of the other facilities which my hon. Friend the Member for Motherwell and Wishaw mentioned.
  Most important of all, how can people be mothballed? We are talking about people, their jobs and their families. I emphasise that throughout the debate no Labour Member has talked about creating more jobs in the steel industry. We have discussed the preservation of existing jobs and

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  steel capacity in order to create more jobs in other industries which will spring from the preservation of the steel industry. If we allow the steel industry to go, the possibility of creating more jobs from that springboard disappears altogether.
  I met Tom Brennan and the shop stewards from Ravenscraig on Monday before I came to London. There is a feeling—my hon. Friend the Member for Motherwell and Wishaw will not object to my saying so—that Ravenscraig is being singled out in a campaign to undermine it by the BSC. Yesterday I heard a report on BBC Radio Scotland which obviously came from a BSC press handout. It went out of its way again to single out Ravenscraig.
  We in Scotland are concerned not only with Ravenscraig but with preserving all of the five big plants. We are not in an either-or situation. We do not contemplate the saving of Ravenscraig at the expense of Llanwern. I understand that Port Talbot is not under threat, because of its low iron-making costs. We want to save and preserve the whole of the British steel industry, private and public.
  If I disagreed with anything that the right hon. Member for Taunton said—I disagreed with precious little of it—I took some exception to his suggestion that the ending of subsidies to BSC would help the private steel sector. The Opposition are as interested in preserving jobs in the private sector as in the public sector. We represent workers in the private sector and they are our people as well as those in the public sector.
  I refer again to the document which has been made available by the British Steel Corporation, and about which my hon. Friend the Member for Motherwell and Wishaw was rightly scathing. It is a disgraceful document. I understand that it has not been made available to the Scottish Office. I was able to keep the Scottish Office informed of what was going on in the aluminium industry, and I am willing to make myself available, to give it a copy of the document and to keep it advised of what is happening in the steel industry.
  This is a serious document, on which the corporation has based its assessment of steel requirements for the foreseeable future. We are entitled to assume that it has based the proposition that it has put to the Government on the future of the big five and other steel plants in the United Kingdom on the assumptions that are contained in the document. If that is so, the corporation is saying that in the next five, seven, eight or nine years there will be no change in the exchange rate, no upturn in the economy and no increase in car output. It is stated in the document that an increase in car registrations will come from an increase in car imports. It is a depressing document.
  That is the document on which the corporation has based its proposals to the Government. The Government have a direct responsibility to the House. There is no point in the Minister shaking his head. If he knows other criteria on which the BSC has based its proposals, he did not tell the House of them when he opened the debate. There were times when I had the clear impression that he was putting the corporation's case for it. I had the impression that he was speaking more for the BSC than for the Government. That is the main reason why I am sure that when a statement is made by the Department it will be delivered by the Secretary of State and not by the Minister. I say that with no disrespect.
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  The document is the basis for the corporation's submission to the Government, and, if the Government disagree with the conclusions that are set out in it, they had better say so. When the Government make a statement on the steel industry, they will have to explain the criteria that they have used in coming to their conclusions. The Minister of State nods in agreement and the Secretary of State for Scotland shakes his head in disagreement. If the two of them get together, we might get a more positive response. It is certain that their decisions will have to be substantiated by the criteria that they have set. The document cannot be allowed to go unanswered by the Government, because it contains the corporation's economic assessment.
  The Government have been put on the line by the corporation. The economic assessment has probably come at a timely moment. It is one which the Government will have to confirm or dispute. It may enable us to learn more about the economic policy that will flow from the crisis. The BSC is, in effect, saying to the Government that its assessment of their future economic policy and of any possible upturn in the economy is based on 11 million tonnes of steel. If that is the extent of the upturn, I must say to Ministers that it is not much of an upturn. In fact, it is not an upturn at all. The Government will have to say before Christmas how they see economic prospects for this country. As a result of the crisis, it is possible that we shall learn more about the Government's economic thinking than would otherwise have been the case.
  If all that we are promised in terms of economic upturn is an upturn based on 11 million tonnes of steel, not only is that not an upturn at all but it spells nothing but gloom and despair for the future economic hopes and employment prospects of millions of our people. The debate has been about the steel industry, but underlying it has been a debate about the future of this country.
  I hope that when the Under-Secretary replies to the debate he will give us some reassurances and repeat the commitment by the Secretary of State for Industry that we will not have the nonsense of statements being made during a recess, and that the promised statement will be made before the House rises. We insist on having a debate and casting our votes in the Lobby. We do not ask for that tonight, but all the warning shots have been fired today and the verdict will be delivered when the Secretary of State makes his announcement.
  11.41 pm
  The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): This has been an important and civilised debate. We should practise more often the idea of breaking for dinner so that we can proceed more comfortably afterwards. Perhaps we should have more controversial debates of this nature on the motion for the Adjournment of the House. The debate has been constructive and orderly and hon. Members on both sides of the House have tried to be responsible and constructive, bearing in mind the fact that many hon. Members were facing considerable constituency pressures in making their arguments to the House. I am only sorry that time will not permit me to do justice to all of the speeches and comments that have been made.
  The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) exercised a great deal of poetic licence in describing the speeches of some of my right hon.

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  and hon. Friends. Nevertheless, the views of my right hon. and hon. Friends are on the record and that will speak for itself.
  My hon. Friend the Minister of State said in his opening speech that the Government's purpose in holding the debate was two-fold. First, we thought it right, at this time of great anxiety and uncertainty about the future of the steel industry, that the House should have a proper chance to express its views before the Government take decisions on BSC's future strategy. The issues touch the livelihoods and prospects of many families in many parts of the country.
  Secondly, we were concerned to generate as wide an understanding as possible, inside and outside the House, of the reasons which lie behind the present plight of the British steel industry. It really will not do to pretend, as some Opposition Members persist in doing, that the problems of the steel industry are superficial, that they lie at the door of this Government alone, and that there is some magic wand which we could wave if only we chose to do so.
  The problems of the steel industry are international and deep-rooted. No area of the world is coming through unscathed. It is not the Government's intention on this occasion or any other to gloat over the misfortune of other countries, but we have to be alive to what is happening elsewhere if we are to understand our own position properly and find effective solutions.
  In opening the debate, my hon. Friend the Minister of State sketched the international scene most effectively. My hon. Friend the Member for Hertfordshire, South-West (Mr. Page) said that in a world in which 76 countries produced steel, compared with only 32 countries in 1950, no one should be surprised at the difficulties that the industry is facing in Europe, the United States of America and Japan. Much as all Governments would like to change the world for the benefit of their own countries, they have to be realistic. We cannot find a solution to the problems of the British steel industry by acting unilaterally. We have to act through international co-operation, and that means, first and foremost, working to restore market stability in the EC.
  We cannot impose import controls, as some Opposition Members have suggested. One of the absurdities of that suggestion is that British Steel depends on imports for more than half of the basic raw materials that it uses to produce steel. The hon. Member for Bothwell (Mr. Hamilton) apologised to me for having to leave early. Along with other hon. Members, he pointed out that the British steel industry had made great efforts during the past three years to improve efficiency and productivity and to close down unwanted capacity—most of it obsolete.
  However, the fact that we have already made progress does not mean that we can afford to sit back and do no more. What we must do, and are doing, is to make sure that others take the same medicine as we have taken in this country, particularly other countries in the EC. Again, my hon. Friend the Member for Hertfordshire, South-West and others referred to that. We also need to ensure that export markets for our steel remain open, for example, in the United States of America, and that imports do not come here at dumped prices. We have taken, and are taking, vigorous action through the Community to ensure greater stability in the market for steel.
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  My hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) said that the Government should take off their gloves now when dealing with the international community. That is precisely what we are doing. I say that both to my hon. Friend and to my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown). As far as steel is concerned the Community is acting very firmly, prodded on—where necessary—by my right hon. Friends. The right hon. Member for Salford, West (Mr. Orme) spelt out the major redundancies of recent months and accused the Government of complacency. With respect, the complacency that has affected our steel industry arose between 1974 and 1979. Indeed, many of my hon. Friends have mentioned that. At that time other EC countries such as Germany and France realised the difficulties that the world faced because of the oil crisis and took firm steps to sort out the problems of the steel industry. We sat and did virtually nothing for five years and that is why there has been such a dreadful catastrophe—that is not too strong a phrase to use—in too many parts of the country during the past three years. We have had to take the action that was so long delayed by the Labour Party.
  The right hon. Member for Salford, West blamed steel imports for the problem, but that flies in the face of the statements made by the chairman of the BSC. He has made it clear that the loss of export markets is one of the most serious problems facing the industry. My right hon. Friend the Member for Taunton (Mr. du Cann) spoke for and of the private sector. He asked that the future capacity cuts should take place in Europe. We very much agree with that and have not hesitated to make that clear to the Commission. My right hon. Friend and some of my hon. Friends emphasised the dificulties that the private sector faces. It is extremely difficult for private-sector companies to compete with nationalised industries. If nationalised industries have not got a monopoly of the domestic market, they usually have a near monopoly. That is why we have pursued legislation to privatise more and more of our nationalised industries. My right hon. Friend also said that no more subsidies should be given to the nationalised industry. As he will know, the EC requires that State aid should end by 1985. That is the objective of the Community and the Government.
  The right hon. Member for Stockton (Mr. Rodgers) mentioned the performance of Redcar and asked for a general moratorium on closures and redundancies for 18 months. He estimated the cost at £800 million. However, the threat to our steel industry has not arisen from a shortage of public funds. Some might argue to the contrary, that public funds have been made too freely available for too long. That has been the basic problem that our steel industry, particularly the private sector, has had to face. That problem has arisen because our industry has been too slow even to start catching up with the productivity of our competitors. Need I remind the right hon. Gentleman that he was a member of a Government who closed their eyes to the problems of the industry? He said that we have been slow off our mark in tackling the problems, but we have been like greased lightning compared to the Labour Party when faced with such difficulties.
  My hon. Friend the Member for Dudley, West (Mr. Blackburn) spoke with great feeling and authority about his constituency. He spoke sincerely on behalf of his constituents. It is not surprising that, because of his conviction, they give him every support in his efforts to

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  look after their interests. My hon. Friend has had meetings with my right hon. Friend the Secretary of State for Industry. A great effort was made to retain a private steel industry. Every effort was made to ensure that the phoenix operation should succeed. Unfortunately, it did not. I would not wish to say anything to discourage my hon. Friend in his efforts to revive the possibility of a private sector steel operation in his constituency. I am sorry that I cannot say anything to encourage him, but I am sure that he has sufficient determination to ensure that every effort is made to succeed.
  My hon. Friends the Members for Edinburgh, South (Mr. Ancram) and Flint, West (Sir A. Meyer) and the hon. Member for Stirling, Falkirk and Grangemouth referred to Ravenscraig. My right hon. Friend the Secretary of State for Scotland and I are exceedingly concerned about the future of that plant. We recognise that it has disadvantages, but, as Mr. MacGregor made clear during his visit to Glasgow last Friday, it also has important advantage.
  Ravenscraig's main disadvantage is its location, particularly in relation to its ore terminal. We cannot move Hunterston to Motherwell, but I am glad to say that British Rail and the local BSC management are taking a fresh look at charges for the movement of iron ore. I hope that that will lead to an early reduction in Ravenscraig's costs.
  Ravenscraig has, in recent years, lost a good deal of its market for strip products in Scotland, but it would be wrong to regard the plant as serving only the Scottish market. It also serves markets throughout the North of England. For example, a significant proportion of its output goes to the Ford plant at Halewood. Nearly 70 per cent. of its output goes to markets in Scotland and the North of England, which the plant is well placed to serve.
  During the past year or two, Ravenscraig's productivity record has been compared unfavourably with that at the other strip mills at Llanwern and Port Talbot. However, it is important to recognise that the "slimline" process was introduced later at Ravenscraig and that earlier this year, when loading was still satisfactory, as the hon. Member for Motherwell and Wishaw (Dr. Bray) mentioned, the plant achieved productivity levels that matched those of the plants in South Wales.
  Mr. Harry Ewing: Will the Minister give way?
  Mr. Fletcher: I am afraid that I cannot. I am short of time.
  Having commented on Ravenscraig's disadvantages, it is only right that I should refer briefly to its advantages. They include its ability to produce the types of high quality steel that are increasingly in demand. Over 80 per cent. of Ravenscraig's output is produced by continuous casting processes, and Concast steel is gaining an increasing share of the market and is increasingly being demanded by customers.
  The plant also has a multi-product role producing slab for plate as well as strip. Most of the slab now goes to the Dalyell plate mill, which is one of the most modern in Europe, with an ability to process very wide plate for the North Sea oil industry and plate of great thickness for defence purposes such as Chieftain tanks and nuclear submarine hulls being built at Barrow-in-Furness.
  My hon. Friend the Member for Edinburgh, South asked whether inward investment would be damaged if
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  Scotland lost the ability to produce steel. The answer must be "Yes". Scotland has a highly integrated economy in which the steel industry plays an important part.
  All those factors which the Government are taking into account in considering the BSC's proposals for its major plants are not in any way being overlooked. As the chairman of the corporation made clear again in Glasgow last Friday, until each plant in the corporation achieves and sustains productivity levels equal to those of our international competitors, there can be no such thing as a safe plant or a safe job in the British steel industry.
  As to the review of major plant configuration that the Government are carrying out with the BSC, I promise the House and my hon. Friend the Member for Edinburgh, South, who raised the matter, that we shall not take hasty decisions that are based only on short-term factors.
  We want a sound steel industry in the United Kingdom. We are examining all the possibilities with Mr. MacGregor just as carefully as we can. We hope that the Government and the corporation will be able to announce our plans in the next few weeks, but we shall not sacrifice thoroughness for speed.
  I remind the House that, with the best will in the world, the British steel industry cannot be saved by decree. The Government are fully prepared to play their part in the difficult circumstances that face the industry today, but the future of steel manufacturing in Britain lies firmly in the hands of those who manage, produce and sell the industry's products.
  There is no reason why British steel should not be as competitive as that produced in any other country. If everyone who is employed in the industry accepts that challenge and if that is fully reflected in their actions, they need have no fears for the future.
  My hon. Friend the Member for New Forest (Mr. McNair-Wilson) was right to remind the House that projections of demand or capacity that are based on theoretical political considerations rather than practical market projections are, by definition, almost bound to be wildly inaccurate. I do not wish to tread on anyone's toes at this late hour, but several former Ministers from more than one party, in their enthusiasm for their responsibilities, have tended to explode the assessments of the demand that would be present for British steel.
  That applies to every other industry as well. That is why our privatisation programme is so important. The sooner industries compile their own projections and are left to their own devices to do so, the sooner we shall have a better and happier state of affairs in industry in the United Kingdom. Viscount Davignon has made and is making a great effort to bring demand and capacity into line in the EC.
  My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) said that there must be a recognised basis for competition between the BSC and the private sector. That problem is bound to persist when we have a dominant nationalised industry in the domestic market, not merely in steel but in ship repair, oil platforms and other industries.
  Complaints do not come only from management and shareholders. In my experience in the private sector, complaints come from workers and shop stewards who feel the consequences of what they describe as unfair competition from nationalised industries.
  The hon. Member for Motherwell and Wishaw made quite an issue about capacity in the steel industry. It is time

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  to dispel myths about the inadequacy of the steel capacity in the United Kingdom to meet an upturn in demand. The facts speak for themselves. In 1981, the BSC produced 13·6 million tonnes of liquid steel using plant with an installed capacity of 21·3 million tonnes a year. In recent months, output has fallen to an annual rate of about 10 million tonnes. Similarly, the private sector produced 2·4 million tonnes in 1981 from an installed capacity of 4·7 million tonnes. Total installed capacity in the United Kingdom of 26 million tonnes thus compares with actual production in 1981 of 16 million tonnes. It clearly leaves a wide margin of flexibility in circumstances where even the most optimistic of recent forecasts prepared by the tripartite iron and steel sector working party shows that United Kingdom steel demand is unlikely to exceed 18 million tonnes—
  It being Twelve o'clock, Mr. Speaker interrupted the proceedings, and the Motion for the Adjournment of the House lapsed, without Question put.

Tadworth Court Hospital
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]
12 midnight
Mr. Ivan Lawrence: For the past 20 years of my life as a practitioner in the courts, and for the past eight years as a Member of this House, I have advocated many causes, some good and some bad. The bad causes in the courts have often ended in failure, and that is as it should be. The good causes in the courts and in this place have more often succeeded, although some, as the Minister well knows, have not yet done so. However, they will in time.
In all these years of advocating causes, few have been so manifestly good as the need to save Tadworth Court children's hospital from extinction, and none has attracted in so short a time such massive support from the public, the press, parents, nurses, doctors and the 160 Back-Bench Members who have signed the two early-day motions. That support is clearly here tonight, even at this extraordinary awkward hour.
Happily, the cause of Tadworth hospital has already enjoyed some good fortune. I have had the good fortune to draw this opportunity in the ballot to have this short debate. We have the good fortune that the Member who represents Tadworth is my hon. Friend the Member for Reigate (Mr. Gardiner), and I hope that he will catch the eye of the Chair.
We have the further good fortune of having a Minister for Health who has a well-justified reputation for genuine concern about those who are burdened by suffering in society, and who has already made it clear that this particular decision is too important for him to rush into the quick and seemingly easy way out.
We also have the good fortune of having the support of a number of people engaged either in the financial world or with leading charities who are determined that Tadworth shall not die. I welcome the support of hon. Ladies and, in spirit, hon. Gentlemen on both sides of the House for this cause. We look to the Minister's decision, after due consideration, to bring about the ultimate good fortune for which we are earnestly striving.
My hon. and learned Friend must answer three essential questions. First, does Tadworth Court possess such advantages that every conceivable effort should be made to save it? That answer to that is a very definite "Yes". Secondly, would Queen Mary's, Carshalton, the recommended alternative of the Great Ormond Street board of governors, be an adequate substitute for Tadworth? The answer to that is a very definite "No". Thirdly, what can be done as an alternative to closure to avoid pre-empting an unfair proportion of NHS money that is available for other pressing health needs? The answer to that is "A number of things".
In the short time available to me I want to attempt fuller answers to the first two questions. I know that my hon. Friend the Member for Reigate is well prepared to answer the third.
What is it about Tadworth Court that makes it so indispensable? It is summed up very well in some of the headlines that have appeared in the national press. The Daily Express called it"Heartbreak of happiness hospital".
The Daily Mail stated:
"We must fight for this haven of hope".

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The Sunday Times asked "Must the caring stop?" The uniqueness of this hospital is that it is what some hospitals claim to he but few really are—a home. It is a place of happiness, providing care and hope for children who are terribly sick, and for some who have little hope of life.
To those children, Tadworth is a second home to which they are happy to return time and again. It is a home where the parents can go to live for short periods with their sick children and be sustained themselves, where they can gain some respite from the despair of coping at home with the most handicapped of children. It is a place where parents whose families are cracking up under the strain can receive friendship, advice and help. It helps to give them peace of mind, because they know that they can trust the staff of Tadworth.
Tadworth is no large, multi-purpose hospital, where the nursing staff come and go, but a home where the same nurses meet the same children returning time and again for help and loving care and the children actually run to greet them. It is a place where bureaucracy and strict timetables are secondary and the needs of the individual child for physiotherapy, intravenous injections or a hot meal at any time of the day or night are paramount. It is a home set in a very suitable, quiet and relaxed environment, surrounded by local people so supportive that in 1976 they raised £60,000 in donations towards the cost of a hydrotherapy pool.
If my hon. and learned Friend the Minister really wishes to see the small, self-contained, local cottage-type hospital for which the Government have called in "Care in the Community", he will find it pre-eminently at Tadworth. What Tadworth offers is quantifiable not by statistical and financial measure but, as the headlines say, by happiness, caring and hope.
Can all this be so simply transplanted lock, stock and a barrel to Queen Mary's hospital, Carshalton? Would that be the ideal solution for Tadworth's cystic fibrosis and mentally handicapped children, as it would doubtless be an ideal solution for the problems of underoccupied beds and underused resources at Queen Mary's hospital?
Nothing that I say should be taken as a criticism of a hospital with such a good reputation as Queen Mary's, still less as a criticism of the dedication of its staff. I also hope that nothing in our campaign will be taken as a reflection on Great Ormond Street hospital—a hospital of the highest reputation and renown into whose care I have entrusted my own daughter as a patient for the past 14 years.
We wish the Great Ormond Street hospital had been able to stick to the decision of its strategic working party, recorded in a minute of 18 November 1981 as follows:
"Mrs. Bond (in the Chair) suggested that, in an attempt to reduce the numbers of alternatives for consideration, the Working Party should exclude the possibility of a total closure of Tadworth. She felt that this would be particularly difficult to implement—especially in view of the unique care that was afforded to patients, many of whom could not be treated elsewhere, the staffing implications and the heavy capital expenditure necessary in the Group if Tadworth closed completely. Mrs. Callaghan supported these comments and other members of the Working Party also agreed that this possible course of action be discarded."
Too much will be lost to cystic fibrosis and mentally handicapped children, to parents and to staff if the Queen Mary's alternative is adopted—not because Queen Mary's is a bad or inferior hospital but because it is a different kind of hospital. It is a big, acute hospital—a large paediatric centre. It cannot be a serene, quiet hospice. There is no creche for patients. There is no holiday unit. The regime
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is not of the family kind. The wards are too large and have too many beds to provide the homely atmosphere so vital to many of the children who go to Tadworth. The drugs given via canula drip would not be administered by nurses whom the children love. Physiotherapy would riot be carried out by nurses through the night, nor would food be cooked by parents and staff at all hours. At Queen Mary's, the methods are different and the rules are different. The hospital itself is different.
On this the Minister has not the unsubstantiated word of a mere Member of Parliament fighting for a cause that he believes is right, but the most weighty of all opinions in this matter—those of the consultant paediatricians at Great Ormond Street hospital. The considered view of the medical advisory committee which would be making the referrals to Queen Mary's—these men and women are, in a sense, making this judgment against their own personal interest, as Queen Mary's would be more convenient for them—is summed up by Dr. Duncan Matthew, who said that
"it would be almost impossible to reproduce the same level of care for these particular children at Queen Mary's."
Even if the procedures could be changed at Queen Mary's, one must face the fact that the staff are likely to be substantially different. Queen Mary's is six miles by road from Tadworth. There is no direct public transport. The existing Tadworth staff have made it clear that very few of them would be likely to transfer even if—and it is doubtful—they were preferred to the existing staff at Queen Mary's. Once they go, the parental and children's confidence would be lost. A unique section of the nursing profession might be lost to medicine. For the existing patients at Tadworth the change would not be a happy one. For the patients of the future, the regime of Tadworth, which now contributes so much, would disappear.
There are ways in which Tadworth can be saved—and none of its unique benefits lost. Over the next two months it will be possible for my hon. and learned Friend to examine whether the 37 acres of unnecessary land can be sold and the capital invested, whether money might be saved if there were fewer beds, or more referrals and more beds, and whether alternative ways of raising finance can realistically be adopted.
There are so many good reasons for saving Tadworth. So many options might be adopted to enable it to be saved that all who wish to see this unique children's hospital saved should take heart. The Minister has given two earnests of his good faith. Yesterday, he welcomed a deputation that put our case, and he administered first-aid by giving £300,000 to the threatened hospital.
All that we can ask—and all that we do ask—is that my hon. and learned hon. Friend fully and fairly considers these options and the fact that so many people really care deeply about the survival of Tadworth.
12.13 am
Mr. George Gardiner: I thank my hon. and learned Friend the Member for Burton (Mr. Lawrence) for curtailing his remarks so that I, as the Member of Parliament within whose constituency Tadworth Court hospital falls, can make a short contribution to the debate. I thank my hon. and learned Friend the Minister for also making available a little of his time.
As one who was aware of the unique service and facility offered by the hospital before I was ever elected an hon. Member, I thank my hon. and learned Friend the Member

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for Burton for the continued interest that he has taken, not only in the cystic fibrosis cases at the hospital, but in the welfare of all the children and families affected. We are all at Tadworth Court most grateful for the work that he has done.
I pay tribute to the staff of the hospital, who do not see the battle as one—as it often is—of fighting for their jobs, but who are rather fighting to be able to go on caring for children who are regularly referred to them. They are children who, as my hon. and learned Friend said, regard the staff more as family friends than as nurses.
I am also grateful to my hon. and learned Friend for laying the false view that the Minister is faced with a difficult choice between
"two half-filled hospitals within a 4 mile radius of one another".
It was noteworthy that when our deputation came to see the Minister yesterday a united view was presented by the staff, the consultant side and the parents who are so deeply affected. The united view was that, although they had no wish to deride or knock the excellent work done at Queen Mary's hospital, the type of facilities offered there for this type of child patient would be a most inferior substitute. My hon. and learned Friend the Member for Burton said that there are a number of options for keeping the hospital open and we know that the Minister will investigate them thoroughly.
It has been pointed out frequently in the press that Tadworth Court hospital costs —1·4 million to run. As its bed occupancy has been run down over recent years, that means that the cost per patient is high. The view in the hospital, which I share, is that if greater use were made of the hospital and it was opened to more of the cases needing respite care within the South-East region the economic picture presented by the hospital would be far more favourable.
If the hospital is closed, the Great Ormond Street group will not be £1·4 million in pocket, because it is still offering to pay £400,000 a year to Queen Mary's hospital to take care of those patients. According to the deputy hospital administrator at Great Ormond Street hospital, the savings to the group will at best be £800,000 and at worst £400,000 per annum. That puts the figures into perspective rather better than the press reports suggest.
As my hon. and learned Friend the Member for Burton has said, a number of courses have been suggested and they are not all mutually exclusive. A scheme has been presented by the Spastics Society that my hon. and learned Friend the Minister has undertaken to investigate. The Spastics Society and the other charities backing it stress that its proposals are flexible, and I am convinced that they offer a partial solution which would open up the hospital's respite care facility to more children who need it as well as continuing the hospital's other facilities.
My hon. and learned Friend mentioned the sale of land, which is a factor that has cropped up fairly recently in the mind of the board of governors. According to a report prepared for it by a firm of valuers, if the site was completely developed with low-density housing it could be sold for about £3 million. That proposition is attractive to the Great Ormond Street governors. However, local opinion would regard it as an outrage if the land were sold for that purpose without any direct benefit to or preservation of the facilities available to the children. The
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report says that the land that is rented for grazing could be sold on the same basis for £1·7 million. That could be put to good use to support the Tadworth unit.
There is great potential for private support to back this National Health Service hospital. The Minister will know that 10 days ago an appeal fund was launched locally. It had to be opened to receive the money that was flowing in from well-wishers across the country. The fund has received £7,000, mostly in small contributions. The Minister will say that even if that sum is doubled it will not go far towards saving the hospital, but it is an acorn from which an oak tree could easily grow. The offers and encouragement that have come from the city and private companies are proof of that.
We have had an offer from a reputable business man in the City to organise a fund that could net more than £100,000 in covenanted income for the hospital. Only yesterday great interest was shown by the Heritage Foundation in the United States in offering a challenge grant to the hospital whereby every pound raised privately could be matched by a pound from the fund to a limit of £120,000. I am advised that a survival fund of ¼ million could easily be within our sight.
All such support hangs on one condition—that my hon. and learned Friend reprieves Tadworth Court and gives it a future. If he decides to close it, the private support will evaporate to the permanent loss of present and future generations of children suffering from cystic fibrosis, varieties of mental handicap or progressive terminal illness. I have a close knowledge of all that the hospital achieves, and I appeal to my hon. and learned Friend to reprieve the hospital so that the sources of finance can be tapped and used for the benefit of those children.
12.21 am
The Minister for Health (Mr. Kenneth Clarke): I understand the strong feelings of the staff, the patients and, above all, the families of the children who are treated at Tadworth Court about its future. I understand them very much more having met the deputation brought to me yesterday by my hon. Friend the Member for Reigate (Mr. Gardiner) and my hon. and learned Friend the Member for Burton (Mr. Lawrence).
There is no question but that the services provided to the children and their families should continue. The question facing us, on which I am happy to have the advice of the House, is where and how best to provide them.
Let me explain briefly how the problem has arisen. It does not come from any sudden reduction in financial support to the group of hospitals or cut-back in the financial provision for the vital work of caring for sick children. Tadworth Court is part of a group of hospitals for sick children managed by a board of governors as part of a special health authority. The group consists of the main hospital, the well-known national centre of excellence at Great Ormond Street, the Queen Elizabeth hospital, Hackney, and Tadworth Court.
The resources for the group have been increasing recently because of the steady increase in the amount of work that it does. In particular, the resources have been under great pressure because of the increase in the highly specialised activity at Great Ormond Street, which takes the most difficult and worrying cases from all over the country. In recent years alone we have seen the development there of new methods of treating malignant disease, in the diagnosis and treatment of renal disease in

377
children and in the development of new surgical techniques for the neonate. Many children admitted to Great Ormond Street from all over the country are multi-handicapped and it is the only suitable hospital where all the required specialties are available.
The Government have done what any Government of any political complexion would do; we have put more money into the group to finance the increased activity, particularly at Great Ormond Street, which deals with the most highly advanced and difficult cases. Recently when Great Ormond Street came under extreme pressure the Government made an extra £300,000 available to stop it having to cut back the level of its intensive care to what it was a year or two ago.
The provision of the services at Tadworth Court comes within the group, and it was the governors of the group who suggested that its future might be changed. They clearly are not heartless or insensitive people. They have had to take a realistic look at what is happening at Tadworth Court. There is a Queen Anne building, surrounded by other buildings, set in 62 acres of land of which 25 acres are let for nothing more than the grazing of horses. It is expensive to run. It is under-used with only about 50 per cent. of the beds used for the treatment of patients. The running cost is £1·4 million a year. The value of the whole site is estimated at about £3 million. The sale of part of the site would, of course, release the sort of funds to which my hon. Friend the Member for Reigate has referred.
One therefore has facilities of a very high standard deserving all the praise given by my hon. and learned Friend the Member for Burton, but nevertheless under-utilised and in a very expensive setting. It is necessary to examine the finance involved in caring for these children even with such standards of care. The whole problem of the Health Service is that even when resources are increased there are still demands all over the country that could be met.
The provision of children's services in Surrey is quite extensive. There could be strong demands for improved patient care from other parts of the country. The right hon. Member for Bristol, South (Mr. Cocks) has been present for this debate. I have received submissions from people in Bristol explaining their demands for an expansion of services at Bristol children's hospital. One has therefore to adopt a fairly hard-headed approach towards the resources allocated to Tadworth Court. There are children's hospitals in Bristol, in Birmingham and in many other cities which are doing great work. They are constantly pressing against the limits of available resources. It is therefore necessary to examine the resources going to Tadworth Court.
Mrs. Gwyneth Dunwoody: It is important for hon. Members to know on what basis the decision is to be taken. Will the Minister give an undertaking that before he makes any decisions the hospital will not be run down, nurses will not be withdrawn, wards will not be closed and pupil nurses will not be removed?
Mr. Clarke: Yes, I will. I heard some of those complaints yesterday. There is no question of running the
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hospital down until a decision is taken. The £300,000 that we have given to the board of governors is to make sure that those sorts of pressures do not interfere with our ability to make a considered and sensitive judgment.
There are three choices. No one believes that a state of affairs in which the hospital occupies extensive grounds, most of which are of no use to the hospital, should continue. Various proposals have been put forward suggesting how better use could be made of these resources together with alternative suggestions for exploring how the service could be continued. The board of governors of Great Ormond Street propose the transfer of all the services to Queen Mary's hospital for children at Carshalton. That is four miles away as the crow flies and six miles by road. The health authority there could provide 12 orthopaedic beds with theatre and supporting services, a 30-bedded ward for cystic fibrosis, multiple handicap and respite care, and a holiday relief scheme in what is described as an underused social development centre.
It would also be possible to house all the other facilities, which are not to be derided. There are a zoo, a model railway and other items that are essential to this kind of treatment, at Carshalton.
I have been told about the problems at Carshalton. The environment is plainly different. Many of the differences in nursing practice could be discussed and overcome. The hydrotherapy pool could be transferred. The standard of nursing care at Carshalton is very high. Most of the nurses were trained at Great Ormond Street. The proposal is worth examining seriously. There should not be rivalry between the two hospitals. The issue is where the children can best be cared for.
Other propositions and suggestions have been put to me. Mr. Tim Yeo, of the Spastics Society, leading a group of charities, has put to me an interesting proposal. It is agreed, however, that there is a need to consider the details. To what extent can costs per patient be reduced so as to attract local authorities? Is it right to bring patients long distances from other parts of the country simply to provide a hospital with sufficient patients?
A further group of proposals put by my hon. Fiend the Member for Reigate and my hon. and learned Friend the Member for Burton and the deputation that they led, offer finance and a trust fund. They make constructive proposals about the sale of land and investment. All these matters must be examined. I am sorry, but I do not believe I can take an immediate decision. To rush matters in order to reach a decision perhaps before Christmas would cause concern and discontent among people who would feel that the issue had not been considered seriously. I must visit both the hospitals. We must work up the proposals that have been mentioned. No one wishes to destroy these services. No one wishes to take a light decision. However, uncertainty must not last too long. I hope that by January all the weight of representations will have been considered to enable the right decision to be reached for the children and their parents.
Question put and agreed to.
Adjourned accordingly at half-past Twelve o'clock.

CIVIL SERVICE
  Job Dispersal
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  Non-industrial Civil Servants (Ethnic Origin)
  Non-industrial Civil Servants (Ethnic Origin)
  Management and Personnel Office
  Management and Personnel Office
AGRICULTURE, FISHERIES AND FOOD
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NATIONAL FINANCE
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FOREIGN AND COMMONWEALTH AFFAIRS
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INDUSTRY
  Club 403 Project
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PRIME MINISTER
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ATTORNEY-GENERAL
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ENERGY
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EMPLOYMENT
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EDUCATION AND SCIENCE
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WALES
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  Cereal Producers
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HOME DEPARTMENT
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DEFENCE
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NORTHERN IRELAND
  Police Interviews (Tape Recording)
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TRANSPORT
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  "Transport in London" (Report)
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  British Transport Hotels
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  M25 (Progress Report)
  Motor Vehicles (Wearing of Seat Belts) Regulations 1982
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  Road Safety
  Road Safety
  DC Overhead Track
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  Moped Riders
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  Lorries (Sideguards Regulations)
  Lorries (Sideguards Regulations)
  Heavy Vehicles (Spray)
  Heavy Vehicles (Spray)
  Motorways and Trunk Roads (Expenditure)
  Motorways and Trunk Roads (Expenditure)
  Northern Route, Stage 2 (Middlesbrough)
  Northern Route, Stage 2 (Middlesbrough)
  British Transport Docks Board
  British Transport Docks Board
TRADE
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  Non-departmental Public Bodies
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  Beer Casks and Kegs (Volume)
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ENVIRONMENT
  Urban Programme (Docklands)
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  Cadmium
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  Regional Grants
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  Energy Conservation (Palace of Westminster)
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  Land Compensation Claims
  Land Compensation Claims
  Dogs
  Dogs
  Water Supplies
  Water Supplies
  Building Materials
  Building Materials
  Council House Sales
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  Countryside Commission
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  Construction Products
  Construction Products
  Clinical Waste
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  Firemen (Superannuation Benefits)
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  Housing Benefit
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  Capital Expenditure
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  Rents
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SCOTLAND
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  Seal Cull (Orkneys)
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  Student Grants
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  National Health Service (Artificial Blood)
  National Health Service (Artificial Blood)
  Tree Planting
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  Fishing Catch (Shetland)
  Fishing Catch (Shetland)
SOCIAL SERVICES
  Advisory Council on the Misuse of Drugs (Report)
  Advisory Council on the Misuse of Drugs (Report)
  Family Incomes
  Family Incomes
  NHS (Treatment Costs)
  NHS (Treatment Costs)
  Generic Drug Substitution
  Generic Drug Substitution
  Dr. B. A. Wills
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  Drugs (Therapeutic Advance)
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  Northern Region (Migration)
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  NHS (Expenditure)
  NHS (Expenditure)
  Emigration and Immigration
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  NHS (Prescribing)
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  Vaccine Damage Payments
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  Multiple Sclerosis
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  Cimetidine
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  Treatment Costs (Guidance)
  Treatment Costs (Guidance)
  Homes for the Elderly (Registration Fee)
  Homes for the Elderly (Registration Fee)
  Hysterectomies
  Hysterectomies
  Health Education
  Health Education
  NHS (Children's Spectacles)
  NHS (Children's Spectacles)
  Mobile Body Scanners
  Mobile Body Scanners
  Nicorette
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  Clinical Service
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  Benefits
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  Pensions
  Pensions
  Departmental Staff
  Departmental Staff
  Private Contractors
  Private Contractors
  Unemployment Benefit
  Unemployment Benefit
  Starch-blocking Pills
  Starch-blocking Pills

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

Weldon Park Wood SSSI
Lord Melchett: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government why they agreed to the destruction of 40 acres of Weldon Park Wood SSSI in Northamptonshire, and whether they can guarantee that the rest of the wood, including 30 acres at the southern end, where no felling licence is required, will now be protected.
The Earl of Avon: My Lords, my noble friend the Minister of State for Agriculture and my honourable friend the Parliamentary Under-Secretary of State for the Environment, the Member for Sutton and Cheam, having received and considered advice from all interested parties, concluded that the owner should be allowed to fell part of the wood. As to the remainder, the provisions of the Wildlife and Countryside Act relating to sites of special scientific interest are now in force and, if application is received to fell further areas, the consulation arrangements authorised in the Code of Guidance for SSSIs will apply.
Lord Melchett: My Lords, I am grateful to the noble Earl for that reply. Does that mean that the Government will support the NCC if it refuses permission to the owner to clear the 30 acres at the south of the wood, which apparently the owner has said he intends to clear, in direct contradiction of what the Ministers involved said after they had visited the site and made their decision? Is the noble Earl aware that his honourable friend at the Department of the Environment said that he understood that the 30 acres would not be cleared, and this has now been contradicted by the owner?
The Earl of Avon: My Lords, I had not heard that the owner had contradicted what had been said. I am advised by the Forestry Commission that the majority of the remaining woodlands carries licensable size timber and therefore a licence would be necessary before it could be clear felled. With regard to a Section 29 order, it is for the Nature Conservancy Council to decide whether to seek such an order, and if it did, the Secretary of State would then give it proper consideration.
Lord Gisborough: My Lords, has my noble friend noticed that there is just as much conservationist concern directed against cutting down trees as there is directed against planting them in other places? Is it not essential that trees should be cut down when they are due to be cut down, planted when they are due to be planted, and that the matter should be managed on a proper rotation, regardless of conservation?
The Earl of Avon: My Lords, I am sure that my noble friend speaks much sense, but I do not especially wish to be drawn on that particular argument. Adequate procedures already exist to ensure that the Forestry Commission consults, as appropriate, the agriculture departments, local planning authorities, and other relevant statutory bodies, before reaching a decision on an application for grant or for a felling licence.
Lord Stanley of Alderley: My Lords, is it true that the 30 acres referred to in the Question was cultivated during the 1939–45 war and that since that time it has fallen into its present disuse and become scrub, due to bad agricultural management?
The Earl of Avon: My Lords, I have not records as full as those of my noble friend, but according to our records the area was clear felled in 1938.
Lord Melchett: My Lords, first, can the noble Earl confirm that the proposal in this case is not to cut down trees and replant them but to clear the woodland, which is a small remnant part of an ancient forest, and convert it to agricultural use, which would totally destroy it? Secondly, can the noble Earl confirm that the 30 acres that is referred to in my Question, and to which the noble Lord behind him has just referred, would not require a consent from the Forestry Commission before it was cleared?
The Earl of Avon: My Lords, with regard to the first part of the noble Lord's supplementary question, yes, I think that he is right. So far as the second part of the question is concerned, my understanding is that it would probably require a licence.
Baroness David: My Lords, may I ask the noble Earl whether, in fact, Ministers are to make decisions in these matters, since I understood that the NCC was to have responsibility for them? I thought that FWAG (the Farming and Wildlife Advisory Group) was told that Ministers would not be interfering in this way.
The Earl of Avon: My Lords, it is only a last resort in cases of dispute.
The Countess of Mar: My Lords, may I ask the noble Earl whether the Government consider the present felling controls and consultation procedures to be adequate?
The Earl of Avon: Yes, my Lords, we do; and I think that I went into the point in some detail when answering my noble friend Lord Gisborough.

Nature Conservancy Council: Rayner Review
2.40 p.m.
Lord Melchett: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the Rayner Review of the Nature Conservancy Council staffing and organisation will take into account the full range of the NCC's statutory duties, functions and related obligations and the extent to which these are matched by the NCC's existing resources.
The Earl of Avon: My Lords, the terms of reference for the Rayner Review provide for these matters to be taken into account and for the Nature Conservancy Council's staffing and organisation to be examined accordingly.
Lord Melchett: My Lords, if that is the case, can the noble Earl explain why the words contained in the Question on the Order Paper were deleted from the scrutineer's terms of reference at the last minute by the Government, without consultation with the NCC, and without its agreement?
The Earl of Avon: My Lords, in the opinion of the Government the words were otiose. We believe that when one speaks of a council's statutory duties it is implicit that one is speaking of the full range of those duties.
Lord Hunt: My Lords, is the Minister aware that there are several thousand SSSIs around the country, of which several hundred are damaged or destroyed annually through trespass, sale, or other causes? Will he ensure that the Rayner Review Body take these facts into account when considering the staff implications?
The Earl of Avon: My Lords, I am sure that those points will be taken into account in the review body's scrutiny of the organisation and staffing of the Nature Conservancy Council.
Baroness White: My Lords, is the noble Earl aware that additional responsibilities have been placed on every regional water authority in the country and on the land drainage authorities by the Wildlife and Countryside Act, and that these additional responsibilities that they are carrying out will almost inevitably result in extra work for the Nature Conservancy Council; and that the progress will be scrutinised very closely indeed by those of us who are . interested in the matter?
The Earl of Avon: My Lords, I am grateful for the noble Baroness's intervention. I shall of course bring the point to the attention of my right honourable friend.
Lord Melchett: My Lords, the noble Earl answered the first part of my supplementary question but not the
1236
second part. Can he give an assurance that the scrutineer will take into account the extent to which the NCC's existing resources match their existing statutory responsibilities—the full range of those responsibilities?
The Earl of Avon: My Lords, in the opinion of the Government, it will be impossible for the scrutineering officer to conduct his review, which is a review of staffing organisations and systems, without having regard to the extent to which the manpower resources of the council match their current obligations.
Lord Stanley of Alderley: My Lords, can my noble friend tell me of any instance so far where a site has been damaged because of lack of funds by the NCC? Would he agree that, perhaps, if we talked a little less about the problems of the Wildlife and Countryside Act we might all get on a little bit better.
The Earl of Avon: My Lords, with regard to the second part of my noble friend's supplementary question, I hope there are not very many problems. With regard to the first part, perhaps I may read what the Director-General of the Nature Conservancy Council wrote in The Times just the other day:
"The Secretary of State for the Environment, at his own request, is informed of any cases where the special interest of such sites would be damaged or destroyed because of insufficient funds. He has on a number of occasions provided additional money to safeguard these sites and we have every reason to believe he will continue to do so".
Lord Melchett: My Lords, no doubt the noble Earl is aware that the Government are currently in breach of the Berne Convention, which they recently ratified, because the NCC do not have sufficient staff resources at regional level with which to carry out the new international obligations that that international convention placed upon this country?
The Earl of Avon: My Lords, that is slightly wide of the Question, so I cannot confirm it.

Falkland Islands Maps
2.45 p.m.
Lord Jenkins of Putney: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many copies of the Ordnance Survey map of the Falkland Islands were ordered by the Argentine Embassy towards the end of last year and how many were supplied.
Lord Skelmersdale: None, my Lords. There are no Ordnance Survey maps of the Falkland Islands.
Lord Jenkins of Putney: My Lords, is the noble Lord aware that, although I may have misdescribed the maps, the sole means of obtaining geographical and other information, and indeed, nautical information, about the Falkland Islands rests in the hands of Her Majesty's Government, including all the nautical

1237
maps of the area; and that whatever information the Argentine forces obtained about the Falkland Islands was obtained from Her Majesty's Government?
Lord Skelmersdale: My Lords, I was not meaning to imply that there were no British-published and British designed maps. I was trying to answer the Question on the Order Paper—which I think I probably did. The overseas directorate of the ODA publishes maps. Copies of these maps were found as a result of the Argentine invasion and, obviously, had been used. However, these were not the kind of topographical maps referred to in the Question. These were basically tourist maps which had been supplied to the Falkland Islands Government as long ago as 1966. It would be hardly surprising if there were not various maps around on the islands at that time.
Lord Jenkins of Putney: My Lords, is it not the case that, although the nomenclature was wrong, the reality of the Question was right?
Several noble Lords: Hear, hear!
Lord Jenkins of Putney: My Lords, I think that the noble Lord was rather sheltering behind what was perhaps an error of wording in seeking to avoid the fact that it is the case that a large quantity of maps of strategic and tactical importance to the Argentine forces were supplied, not directly, but indirectly, by Her Majesty's Government a short time before the invasion. Is that not the case?
Lord Skelmersdale: My Lords, no, as I thought I had explained already to the noble Lord. I answered his Question. I also answered his supplementary question which, I agree, elicited slightly different facts. Nevertheless, I maintain that both answers stand on the record. The Directorate of Overseas Surveys have examined the statistics of sales of Falkland Islands maps over the last 10 years and can detect no large-scale sale of them to any purchaser in 1981 or 1982. Maps of the Falkland Islands of British origin were captured from the Argentine military during the repossession of the islands, but these maps had been reprinted in Argentina—in breach, incidentally, of international copyright.
Lord Beswick: My Lords, would it not have been in keeping with the traditions and courtesies of the House if the noble Lord had given some of the information contained in his answer to the supplementary question in his initial reply?
Lord Skelmersdale: No, my Lords, I should have thought that it was in the traditions of the House for the Minister, so long as he was answering the Question, to answer in his own way.

BBC Foreign Broadcasts
2.38 p.m.
Baroness Trumpington: 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 with the range and extent of the foreign broadcasts of the British Broadcasting Corporation.
Lord Skelmersdale: Yes, my Lords; the BBC external services broadcast about 725 hours per week in English and 36 vernacular languages. The BBC estimate that some 100 million people tune in at least once a week. We expect this audience to increase as we implement the new and expanded capital programme designed to improve audibility.
Baroness Trumpington: My Lords, I thank my noble friend for that very satisfactory Answer. May I ask him whether he agrees that
"Bemã etelããt az dunyâ-ye ãzãd bedahïd"
and
"Dýe-chay nam informâtye zvolnéygo sheeáta"
which, translated from Dari and Polish, mean, "Give us information from the free world", is a desperate plea? Would he confirm that increases have been made in foreign broadcasts, in the Polish language to Poland and in Dari to Afghanistan?
Lord Skelmersdale: My Lords, I am grateful to my noble friend, not only for her supplementary but also for translating it. It is not a prerequisite of my job that I understand every known language. However, I agree with my noble friend that Polish has increased and also that Pushtu to Afghanistan has increased recently. The present total of 725 hours broadcast weekly compares favourably with 712 hours a week broadcast in 1979 and with similar figures for the four preceding years.
Lord Strabolgi: My Lords, will the Government allow the BBC to re-open the Spanish language service? Are they aware that its absence was bitterly regretted by the British Embassy in Madrid during the Falklands campaign, and continues to be regretted considering the attitude of the present Spanish Government to Gibraltar?
Lord Skelmersdale: My Lords, I believe that the noble Lord, Lord Strabolgi, put a similar supplementary question to my noble friend Lord Belstead fairly recently. I have not the reference with me, but I am sure this is so. I have nothing to add to what he said then.
Lord Kilmarnock: My Lords, can the noble Lord tell us whether any additional direct broadcasting to Venezuela is planned for next year in view of the 200th anniversary of the birth of Bolivar, who of course came to England in 1810 and derived most of his political ideas from reading Hobbes and Locke?
Lord Skelmersdale: My Lords, not so far as I am aware.
Lord Molloy: My Lords, does the noble Lord recall that earlier this year there was great consternation expressed in this Chamber about the Government's decision to cut back drastically the BBC's overseas broadcasts? The BBC itself made protestations, and so did all the responsible newspapers. Those cuts still

1239
remain. Is the noble Lord now saying that the situation is satisfactory, when we are not covering nearly as much as we did before those cuts were inflicted?
Lord Skelmersdale: No, my Lords, I am not saying that at all. What I am saying is that the total number of hours has increased; but the noble Lord's memory is quite correct. We have debated the matter very fully and have had many Questions on the subject of the cuts, which amounted to 30 hours' broadcasting time and involved £l½ million. All this was switched to increases in capital equipment, and new money was added by the Government. This was agreed by Parliament in October last year. Since then the following increases have been made: Polish by five hours a week; Spanish, to Latin America, by 8¾ hours a week; "Calling Falklands" from 40 minutes once a week to 45 minutes seven times a week; and Pushtu, to Afghanistan, by 1¾ hours a week. The Government are determined to maintain the fluidity of the situation, and where a demand arises we shall most certainly do our best to meet it.
Lord Campbell of Alloway: My Lords, is my noble friend the Minister aware of any impending anniversary affecting these most prestigious services?
Lord Skelmersdale: Yes, my Lords. I am extremely grateful to my noble friend. The 50th anniversary of the BBC's external services is on 19th December this year. I am sure that the whole House will want to wish them well in the future and congratulate them on putting up a magnificent show in the past.
Baroness Trumpington: My Lords, would I be correct in thinking that under this Government vastly increased sums of money have been spent on external services than ever were under a Labour Government?
Lord Skelmersdale: Yes, my Lords, that is absolutely true. As I said, we have changed the emphasis to making sure that such services as there are should be heard in as many places as possible, rather than concentrate, as our predecessors did, on having as many languages as possible.
Lord Whaddon: My Lords, referring to the increase in broadcasting to Poland, is the noble Lord aware that the vast majority of our friends there will say, "bardzo dobrze I dziepuje", which means "very good and thank you"? Does he also appreciate that they will be looking forward to hearing on the BBC that the sanctions have finally been abandoned?
Lord Skelmersdale: My Lords, the second part of the noble Lord's supplementary question does, I suggest, go slightly wide of the Question on the Order Paper. However, to keep all this in perspective, I should also say that of course we are continuing, and have continued throughout, to keep world service broadcasts in English on the air for 24 hours a day.
Lord Derwent: My Lords, did we not have a full-scale debate on this subject a short time ago? Ought we to have two debates so close to each other?
Lord Kaldor: My Lords, is the noble Lord able to give the House any indication when the audibility of BBC shortwave broadcasts will be strengthened to make them comparable to those of the Soviet Union, Germany or a number of other countries, which always seem to crowd out the voice of the BBC, making it difficult to hear?
Lord Skelmersdale: My Lords, I am extremely grateful to the noble Lord. This is exactly the reason why we are pursuing this capital development programme.
Lord Molloy: My Lords, I wonder whether the noble Lord will be prepared to check the coverage? This is a vitally important sector, I believe, of the BBC's activities, and much has been lost because of these cuts. Is the noble Lord not aware that one cannot simply go on saying that the service is costing more, because everything in this island has cost much more since we have had a Conservative Government. That does not mean that standards have been maintained.
Lord Skelmersdale: My Lords, the noble Lord's impressions obviously vary from mine. I was under the impression that inflation was falling drastically and is expected to fall further next year. However, so far as his real point goes, inevitably the BBC and the Foreign Office have a budget in this matter. It is a matter for joint decision by both bodies to assess priorities within the range of the available money. This they have done. It has been done very amicably, and I am glad to say that we have agreement.

Business: Timing of Short Debates
Lord Denham: My Lords, with the leave of the House, I should like in the normal way to say a brief word about the timing of the short debates this afternoon. Following the accepted principle that the mover should be entitled to approximately 15 minutes, and that the Minister should rise to reply no later than 20 minutes before the scheduled end of each debate, may I suggest that other speakers should endeavour to limit their speeches to about 11 minutes in the case of the debate in the name of my noble friend Lord Campbell of Alloway, and to about 9½ minutes in the case of the debate in the name of my noble friend Lord Polwarth. May I point out to the House that if any noble Lord were to speak longer, he would do so at the expense of other speakers later in the debate.

Truck Acts (Repeal) Bill [H.L.]
Lord Harris of High Cross: My Lords, I beg to introduce a Bill to remove certain restrictions imposed by the Truck Acts 1831 to 1940 and the Payment of Wages Act 1960 with respect to the payment of wages. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Harris of High Cross.)
On Question, Bill read a first time, and to be printed.

Vaccine Damage Payments
2.58 p.m.
Lord Campbell of Alloway Lord Campbell of Alloway rose to call attention to the restrictions on the right to claim compensation under the Vaccine Damage Payments Act 1979, and to the state of public administrative law which precludes an action in negligence as regards the exercise of discretionary powers; and to move for Papers.
The noble Lord said: My Lords, at the outset, may I, with your Lordships' permission, be allowed to express a word of intense personal delight that my noble and learned friend the Lord Chancellor should have found it possible to reply to this debate, a debate in which consideration will be given to tribunals under the direct supervision of the Council on Tribunals. That, as your Lordships know, operates under the benevolent aegis of my noble and learned friend the Lord Chancellor.
In opening the debate, may I be permitted to make three preliminary observations. First, that it is not my intention to criticise my right honourable friend the Secretary of State, the tribunals or the Council on Tribunals, but to criticise the system of operation of this statutory régime and the inadequacies of the common law.
Secondly, that it is not my intention in any way to detract from the case for vaccination of very small children to raise these antibodies which neutralise infections where this is appropriate in the interests of the community, but to point out to your Lordships with the utmost respect and such power as I have at my command, that it is the very strength of the case for vaccination in these circumstances where it is in the interests of the community which gives rise to my contention that there should be absolute liability and fair compensation.
Thirdly, that with regard to whooping cough vaccine, where the balance of interest is more heavily weighted in favour of the community and against the interests of the child than in the case of any other vaccines such as, for example, polio or smallpox, there is a special situation. This is because the whooping cough ingredient is separable from the other two ingredients in the triple injection: that is, diphtheria and tetanus. As your Lordships will know, the three ingredients are administered on three successive occasions. It is also special because the risk of known potential to cause very serious permanent brain damage is greater in the case of this vaccine than in the case of other vaccines; that is according to the findings at paragraph 1386 of the Pearson Report. Lastly, it is special because medical opinion on this matter of which I speak is far from unanimous (paragraph 1390 of the Pearson Report).
If, in accordance with the findings of the report, vaccinations administered to small children in the interests of the community give rise to a special situation, so be it. If so, then the administration of the whooping cough vaccine, because of the waiting factor to which I have referred, must constitute the quintessence of what is properly described as "special". Indeed, I am advised by Sir Richard Doll, the Warden of Green College, Oxford, who formerly was for 10 years prior to this appointment the Regius
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Professor of Medicine at Oxford, that—and here I quote from his letter to me in which he sent the relevant source reference material—
"Under the age of three months children are normally protected by antibodies obtained from their mothers in utero and that children over three months are less likely to be severely damaged if they get the disease of whooping cough, although there is a slight risk that some of them could be severely affected."
In the debate on the Pearson Report in your Lordships' House, although many noble Lords spoke, it was only the noble Lord, Lord Winstanley, who referred to Chapter 25, which deals with the subject of this debate. His informed contribution in today's debate, and indeed other contributions from Members of your Lordships' House, are all awaited, as the French might say, "with impatience", and it is not my intention to detain your Lordships for long in opening.
As we all know, subsequent to the Pearson Report but not in implementation of it, the Vaccine Damage Payments Act 1979 found its way to the statute book. Why is the existing situation so unsatisfactory? I respectfully suggest that there are five main reasons. The first is that in the first place many parents have decided to have their child vaccinated in ignorance of the risk and in ignorance of the relevant contraindications after the first and second injections which render any further injection hazardous. And because of this ignorance about the risk, this ignorance about the importance of these contra-indications, these parents have not been able to exercise an informed decision as to whether or not to have the child vaccinated, and these parents are unable to take steps to prevent further serious damage by ceasing to have the subsequent injections. I say "these parents": how often is it a single unmarried girl with her child who has to take such a decision?
The problem in public administrative law is this: that if it could be said that the DHSS was negligent, having regard to the fact that it recommended such vaccination but failed to warn the parents and failed to tell them of the contra-indications in the manner that I have suggested, this would not give rise to any liability whatever, because if a discretionary power is exercised bona fide within the ambit of the statute, the law gives no redress. In my submission, this aspect of public administrative law operates harshly in such cases.
The second reason, in submission, why the situation is unsatisfactory is that as the local health authority does not employ the doctor who gives the injection, or the nurse who gives it on his instructions, there is no liability on that authority even if the doctor is negligent.
Thirdly, the only cause of action is that which subsists against the doctor for negligence at common law. This, with the ordinary civil burden of proof, makes it very difficult to show that a healthy child before the vaccination who becomes brain damaged after the vaccination on the balance of probabilities suffered such damage as a result of the vaccination. Even if one can establish negligence on the part of the doctor, such as ignoring the contra-indications and, secondly, vaccine damage ensuing to what was formerly an ordinary healthy child, it is this issue of causation which presents the difficulty. This must be established before compensation can be awarded, and

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this difficulty—in two places in Chapter 5 of the Pearson Report—was expressly adverted to.
Fourthly, as to why the existing situation is unsatisfactory, the restrictions in the Act, to which I seek to call your Lordships' attention, are unacceptable. The fixed compensation of £10,000 is inadequate. The two-year rule is unfair. The limit to seriously damaged children, who are by statute said to be 80 per cent. brain damaged, is arbitrary and, indeed, so arbitrary that it is strongly arguable that this particular restriction, which precludes anyone of 70 per cent. assessment from obtaining one penny piece, is, and constitutes, an unjustifiable discrimination contrary to Articles 1, 6 and 14 of the Convention of Human Rights; and this on the authority of such decisions as Merckx v. Belgian State (Application 6833 of 1974). If any of your Lordships is interested, I can give the references.
Having due regard to the inadequacies of the common law, the setting up of this statutory régime, to which I have adverted, is surely misconceived. It calls upon the Secretary of State to adjudicate upon delicate and intricate matters concerning the welfare of children which, by tradition, properly lie within the province of the courts of law. It sets up tribunals with restricted powers and without proper revisory machinery. The implementing regulation brings these tribunals under the direct supervision of the Council on Tribunals, under the Act of 1971, so that they should give reasoned awards (Section 12) and are subject to appellate machinery on a point of law (Section 13). Indeed, Section 4(4) of the Vaccine Damage Payments Act 1979 expressly provides that the decision of the tribunal shall be conclusive, save where the Secretary of State is willing to reconsider under Section 5 of the Act.
But these sections lie in conflict, and detract from the provisions of the Act of 1971; and, indeed, detract also from the obligation of the tribunal under paragraph 9(2) of Part III of the implementing regulations to give a statement of reasons for their decision. And, of course, the question of adequacy of reasoning powers gives rise to problems. Furthermore, although the Secretary of State, under Section 3(3) of the Act, is enjoined to state the grounds upon which he is not satisfied, before the matter is referred by him to the tribunal, this requirement has been construed as meaning only the conclusion—that is to say, whether 80 per cent. disabled or not, whether proof of causation or not—as distinct from the process of reasoning by which such conclusion is arrived at.
Although I have some tentative suggestions as to what might be done, the question is far more what your Lordships think should be done. At this stage, I would not wish to take further time with my ideas as to what should be done, but would have the advantage of hearing what your Lordships consider should be done, if anything, to seek to honour what I see as a moral duty to these children which is not as yet recognised by law. My Lords, I beg to move for Papers.
3.16 p.m.
Lord Winstanley: My Lords, on behalf of my noble friends on these Benches and also on behalf, and at the request, of my noble friends in the Social Democratic
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Party in your Lordships' House, perhaps I should make clear that, since I am speaking for both parties, that does not mean that I regard myself as entitled to 22 minutes instead of 11.I shall stick to the strict par of 11 or perhaps less. Let me say a word of thanks to the noble Lord, Lord Campbell of Alloway, for introducing once again into your Lordships' House a matter of continuing interest and concern, not only to many noble Lords but also to parents and children throughout the whole country; and of very special concern to parents who have experienced this matter of vaccine damage in a child at very close quarters indeed. Of course, we have those people represented by the Association of Parents of Vaccine Damaged Children—a body which has done so much to alert Members of both Houses of Parliament to this very serious question.
Not only is this a continuing matter of concern, but I think it is right to say that it is particularly timely that the noble Lord, Lord Campbell of Alloway, should have raised this matter at this time, because we are now on the eve of a fairly large, and rather serious, epidemic of whooping cough, as a result of which very many children have suffered and a significant number have died. We do not yet know the number that will carry further damage throughout the rest of their lives, as can occasionally happen with this disease, which can sometimes have serious consequences.
Of course, that epidemic resulted in a sudden revival of enthusiasm (if that is the appropriate word) for immunisation against whooping cough among parents who, perhaps, had become disinclined towards it. They were encouraged in that enthusiasm by the Government, by the Secretary of State for Health, for a variety of reasons; and I think that a new factor has been introduced here. We have often said, and many of us believe, that people who suffer very serious brain damage—or, indeed, who suffer at all—ought to be adequately compensated and provided for by society, however the damage may have happened. That was the kind of message that came through loud and clear from the Royal Commission, under the late Lord Pearson, which has often been referred to during these debates.
Once again, I should pay tribute to Lord Pearson, but I repeat that that tribute, which is so often expressed in your Lordships' House, might sound a little more genuine if Parliament itself acted a little more on the recommendations of the Pearson Commission. But the point was made rather clearly in the Pearson Report that where parents take specific action, medically, in relation to their children, on the advice of Government, not necessarily in the specific interests of the child but in the interests of the community as a whole, then one ought to accept that society has a greater responsibility than it might have towards the occurrence of serious damage in other ways. That arose in the course of this epidemic.
Noble Lords may remember that in messages given to the country—and rightly so—by the Minister of Health and by the Secretary of State, Mr. Fowler, we decided at one stage to raise the age limit. Noble Lords will recollect that whooping cough is regarded as a disease which can be quite serious in the very young but which, relatively speaking, is much less serious in older children.
Baroness Gaitskell: My Lords, is that true?
Lord Winstanley: My Lords, the noble Baroness asks whether that is true. It is true, otherwise I would not have said it. What always happened in the past was that immunisation for children was provided free up to a certain age. The Secretary of State for Health decided to raise that age. It was raised to the age of three or even four for older children where immunisation against pertussis whooping cough could be provided free. That was done, as the Secretary of State explained, not for the protection of those children who were being immunised—because we recognised that in their case whooping cough was less serious—but for the protection of other very young children with whom they might later come into contact. Therefore we quite clearly have a group of children who have now been immunised not for their benefit but for the benefit of others. Should it happen that it ultimately turns out that some of those children have been—and some may have been; I do not know—damaged by this vaccine, then we ought to realise that we must have a particular responsibility towards those children.
The noble Lord's Motion points very clearly, as did his speech in introducing the Motion, to the complexity of the law in this area. The noble Lord has done the House a service, because the law is very complex. I shall leave the legal matters to the lawyers who are to speak in this debate and will concentrate on the medical matters and the medical aspects of the case, which are perhaps outside the scope of the noble and learned Lord who is later to reply. However, I am quite sure that the noble and learned Lord will be able to take them on board, if he considers it necessary, and pass them to those other Ministers who may be able to act.
The complexity of the law and the complexity of the medical situation is illustrated in a timely article by Arabella Melville and Colin Johnson, which appears today in the Guardian called, "This unacceptable priceofprotection".Thisadmirablearticleillustratesthe complexity of the problem and the dilemma with which parents are faced when deciding whether or not to take action on behalf of their children. I quarrel only with one part of the article. It appears to suggest that doctors in general are not now alerting their patients to the possible risks—let me underline that they are very small risks—involved in immunisation against whooping cough. After talking to doctors up and down the country, it is my experience and belief that all doctors now underline those risks, try to balance them and try to tell the patients or the parents that the decision must be theirs. Then they do their level best to assist parents to come to a balanced judgment in the light of the particular circumstances of the particular case.
What are the medical facts with which we are particularly concerned? The first is one which we must now clearly accept: that the whooping cough vaccine, the pertussis vaccine, can do and has, in fact, sometimes done serious harm to those who receive it. That now has to be accepted. There was a time when doubt was cast upon it, but the statistical relationship of vaccine brain-damaged children following whooping cough vaccination is now so close that one cannot for a moment deny that some of those cases are undoubtedly due to the vaccine. The difficulty is
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knowing which, because the same kind of conditions can arise from other causes.
The report makes that point in Volume 1, Chapter 5. It says that the problem of establishing causation with certainty in any individual case may well be difficult. We can all say that again. It is desperately difficult. All I do say is that the statistical connection is now so overwhelming that nobody could dispute that the pertussis vaccine does cause, and has caused, brain damage of a very serious and distressing nature for the child, for the parents and for the whole family. The second point, which I have already made, is that whooping cough as a disease can be very serious, that it can often be fatal in the very young and that in other children it can sometimes lead to long-term consequences of a serious nature.
The third medical point I want to make—it is one which I have made before in your Lordships' House—is that when one alerts patients to the dangers of a vaccine, parents take this on board but they do not always discriminate as between different vaccines. If one vaccine can cause this damage, why not all the rest? Therefore, I have to say that there is no doubt at all that while there was a considerable fall at one time, as a result of public anxiety in this area, in the number of children immunised against whooping cough, there was also a very distressing fall in the number of children immunised against desperately serious conditions like diphtheria. In some areas, the number of children immunised against diphtheria fell to well below 40 per cent. That in part was because some parents, because they had become a little suspicious of the whooping cough vaccine, became suspicious of the immunisation programme as a whole and decided to opt out. That could be very serious indeed. May I remind your Lordships that before diphtheria immunisation was introduced into this country there were 73,000 cases a year of that very serious disease. Within a very few years that number was reduced to single figures. If ever we allowed the immunisation level of children against that serious disease to fall very low, I say that we should be on a very dangerous course.
What, then, must we do? Obviously, what ideally we should like to do is to eradicate whooping cough. We found, for example, that the smallpox vaccination was dangerous. It had many serious dangers. But we have been able, with the World Health Organisation and others, to eradicate smallpox altogether. So now we do not need to have smallpox vaccination unless an epidemic arises and there is a particular risk. But I see no hope of dealing with haemophyllus pertussis, which is the organism which causes whooping cough, in the same way. The noble Lord, Lord Hunter of Newington, knows more about these matters than do I and he will probably be able to say something about them. We should also try to pioneer and develop a safer vaccine. That is something which we have done before. When the poliomyelitis oral vaccine was first introduced, there is no doubt that there were certain dangers. Further research was carried out on a world basis. Now we have an oral vaccine against poliomyelitis which is wholly safe and never gives rise to complications.
That is the second thing which we should try to do. However, if we cannot do either of those things, then

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I am wondering (I say this quite seriously and with some diffidence, but as a doctor) whether we ought to consider the abandonment of whooping cough immunisation as a matter of routine public policy until further thought has been given to the matter of pioneering and developing a safer vaccine and until we have in fact discovered a safer vaccine. I say that only for this reason. I believe that the continuation of tragedies of the desperate kind which we have seen from time to time with this particular vaccine has done great damage to public health in other ways by undermining public confidence in immunisation as a whole.
In the meantime I certainly share the view of the Pearson Commission and of other noble Lords that children and their families who suffer from the harrowing and distressing experience of the consequences of this vaccine which they have had given to them in the public interest rather than in their own individual interest ought to receive wholly adequate compensation and support for as long as their lives last and for as long as they need to be cared for in the community.
3.30 p.m.
Lord Mishcon: My Lords, I am sure that your Lordships will be grateful to the noble Lord, Lord Campbell of Alloway, for bringing this matter to your Lordships' attention. It is always pleasant to have a reference to the Pearson Report, if only because it immediately brings to his feet the noble Lord, Lord Allen of Abbeydale, who is to follow me, who was such an eminent member of the Pearson Committee, and whose voice it is always a delight to hear in this Chamber.
In the few minutes which are put at a speaker's disposal in a short debate, I will try to summarise the matters, as I see them, which your Lordships ought to consider. The first would be that vaccination is, of course, no longer compulsory in the United Kingdom, although there was a time when it was compulsory. Therefore, we are dealing with something which, although being in the community's interest, is a voluntary step to take. The second point I would like to make is that, although it is voluntary and definitely in the interests of the community, there must be a duty on those who advocate this step, with the full authority of the state behind them, to give adequate warning to parents before they make the decision in respect of their children, to have them immunised.
The next point which flows from that is that if one understates the possible advantages and overstates the minimal cases which may occur, however tragic they may be, what one does is to deter people, possibly unreasonably, from taking a step which may save their children's lives and may save other children's lives, too.
In that connection, possibly your Lordships will allow me to quote from paragraph 138.2 of the Pearson Report to show the advantages. I am sorry that I do not have any figures which are more up-to-date. The paragraph reads:
"Whooping cough notifications in England and Wales declined from about 85,000 in 1957, when routine immunisation was introduced, to less than 2,500 in 1973. Deaths dropped from 88 to 2".
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As I said, I must apologise for not being able to give the House later figures, and it may be that more informed speakers who will follow me will be able to do that. But there is no doubt that immunisation is an advantageous step to take and an advantageous step to promote. What we must obviously do—and this is very much the lawyers' concern—is to ensure that the proper social duty we owe to those children who unfortunately suffer damage is carried out by us as legislators. There is no doubt that in 1979, when Parliament passed the Vaccine Damage Payments Act, it did the best that it could at that time, without very much information and research being available, and at a very critical moment (as no doubt it was), in order to deal with some kind of public outcry and anxiety. We now have an opportunity, encouraged by the noble Lord, Lord Campbell of Alloway, to look at that Act to see whether it is not right and proper that certain matters relating to the Act should be improved.
The noble Lord, Lord Campbell of Alloway, talked in terms, if I may say so, of criticising any suggestion that compensation to the children about whom we are talking should be adjudged by tribunals. The noble Lord felt that these matters should go before the courts. That is a perfectly tenable point of view, and I know that the noble Lord will forgive me if I differ from him rather strongly on that matter. I believe it depends upon what sort of tribunal one has, on the remit given to the tribunal, on the tribunal's personnel, and so on. I would have thought that the great need was for informality of procedure and speed of the essence, in order to help parents and families afflicted in this way: and the expense which falls upon them, as well as the anxiety, is tremendous. I would have thought that the speed of the remedy and informality are the advantages of a tribunal. To go to the law courts, much though I myself enjoy that process and will do so until the end of my days, is not the most welcome journey for parents in this position, with the complications, no doubt, of having to apply for legal aid and going through the whole question of a court action.
I stick by tribunals, but I would make it the right sort of human tribunal—and that is not meant to be a criticism of existing tribunals, which do take up where the Secretary of State finishes his jurisdiction or where there is some appeal against him. The second point I wish to make is that this should not be a matter for the Secretary of State at all. As I haye said, it should be a matter for a tribunal as the "court", as it were, in the first instance. It is a ridiculous burden to place on the Secretary of State; an unfair one, if I may say so—and possibly unfair also to the parents.
The third point I wish to make concerns the remit of the tribunal. Pearson stated in the clearest possible terms that proof of causation was one of the great difficulties here. If I remember correctly, the evidence Pearson heard was that, from a medical point of view, it was extremely difficult if there is brain damage in a young child, to be able to say with any degree of certainty whether it arose from vaccination or from different causes. Rather than have the strict burden of proof which was put in this Act—that the Secretary of State had to be satisfied about causation—I would very much prefer, if there is another enactment, that it is

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sufficient for the tribunal "to have reasonable grounds for inferring", which is the language I would use, that the causation was there. That would mean, one would hope, that a medical certificate from some doctor of standing to the effect that one could reasonably infer this would be sufficient.
One argument that I would immediately try to impress upon your Lordships is, how wrong it would be to allow the onus of proof as it exists now, with the Secretary of State or a tribunal having to be satisfied. The tribunal and the Secretary of State must have it in mind that if they make an award on the basis of this Act—namely, that they are satisfied—it means that they are adding to the statistics nationally, which are deterrent statistics. What they will have done is to have said, "So many cases have occurred where we are satisfied that this was the causation". That must weigh heavily on the Secretary of State, when he has another duty to encourage vaccination and immunisation.
Quite obviously, an amount of £10,000 as compensation for this sort of thing is wholly inadequate in this day and age. I would not seek to put any figure on it. I would have thought that the proper measure of damage is the ordinary measure of damage, with absolute liability, once there is reasonable proof of causation, following upon the ordinary damages arising in tort. We have known of tribunals, such as the Criminal Injuries Board, which follow that sort of line in awarding damages based upon those damages ordinarily awarded in the courts where negligence is shown. So far, this has been a useful debate and I have no doubt at all that other speakers than I will make it more useful hereafter.
3.40 p.m.
Lord Allen of Abbeydale: My Lords, 11 minutes is a very short time in which to do justice to a complicated and important issue like this. I am sure that the House and indeed the whole community must be grateful to the noble Lord, Lord Campbell of Alloway, for raising this question at this time. We have already heard a good deal, and no doubt will hear a good deal more, about the problems set by the restrictions imposed by this Act of 1979, the 80 per cent. test for disability and so forth, and the doubts as to whether it is really contributing to one of its main objectives—I assume it was one of its main objectives—to try and increase the proportion of children who undergo vaccination against various ills. So far as the medical tribunals are concerned, to which the noble Lord, Lord Campbell, and the noble Lord, Lord Mishcon, have referred, I do not know if it is the intention to use the regulation-making power under the Act in effect to apply the adjudication changes contemplated in Part VIII of the Health and Social Services and Social Security Adjudications Bill—dear me, I hope I got it right!
My main purpose in speaking is not to suggest tinkering with the Act or the regulations, but rather to raise the question whether it is right to continue the Act at all in its present form, because it was never presented as being a long-term solution; it was introduced as an immediate measure to meet an urgent need until a long-term solution could be worked out. At the time the report to the Royal Commission on Compensation for Personal Injury,
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the Pearson Commission, which had just been published, was in everyone's mind. I apologise if I go over again some of the points in the Royal Commission's report, but I am, I suppose, the only member of that Commission, alas! now in the House. I am neither a lawyer nor a doctor, and I would like to make my own shot at explaining what we were after in lay terms.
The Royal Commission, in a very wide-ranging report, had two sets of recommendations relevant in this context: first of all, they had been unanimous in concluding that some further help was called for for all severely handicapped children, however the handicap was caused. They were well aware of the help which is already available, including mobility allowance and attendance allowance, but they were persuaded on the evidence that this was not enough. The presence of a severely handicapped child completely distorts the life of a family. As well as the emotional shock and the continuing disturbance, there are various physical needs such as special clothing and equipment. The Royal Commission were convinced that the state ought to provide extra help for the 100,000 or so children involved, whether the handicap arose from congenital disability, or from post-natal illness or injury, including vaccine damage. The Royal Commission recommended, at 1977 prices, an allowance of £4 a week, coming out at a total of £17 million a year—not, my Lords, a vast amount. So far, the Government have done nothing about this recommendation.
Secondly, the Royal Commission made the specific and additional recommendation about vaccine damage to which reference has already been made. They thought that there should be a new remedy in the field of tort or delict; in other words, they went down the road towards the court rather than towards the tribunal. Under the present law, where negligence has to be established, if a vaccination goes wrong there is very little chance of a successful action against a doctor, but, as has been said already and I am sure will be said again, the circumstances here are that the vaccination is being undertaken at the behest of Government and in the interests of the community, in the full knowledge by Government that there is some element of risk. The Royal Commission thought that the basis of liability of the authorities should be changed from one of fault to one of strict liability.
This would be a change of much greater significance than is perhaps always appreciated outside legal circles. It would mean that if the plaintiff could show, on a balance of probabilities, or however the provision was worded, that the injury was attributable to the administration of a vaccine on the recommendation of Government or local authority, he or she should be entitled to compensation. Subject to these matters of fact and causation—and there is no denying that they could raise problems of their own—there would be no defence.
There has been no decision from Government of either complexion on this recommendation. When the Labour Government introduced the Bill which became the 1979 Act they said that they were still thinking about the Royal Commission's proposals and that this was a measure to give some immediate help. I am sure the noble and learned Lord, Lord Elwyn-

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Jones, will be able to enlighten us further about the motivation for this legislation, but from what I recall at the time and from the written record it seems to me that it was all done on the basis that this was a pretty broad brush approach until the complicated issues raised by the commission's report could be thought out.
The Conservative Opposition welcomed the Bill as far as it went. The debates on the Bill do now make very interesting reading. I will content myself with one quotation from a speech for the Opposition by the noble Earl, Lord Avon, on 8th March 1979, at column 310. He said:
"We understand that this is a sum given as an interim payment; that this is an immediate and, I may say, very welcome, gesture to ease the suffering of families. Can the Minister assure the House that this will not in any way prejudice either the acceptance of the Pearson recommendations, on the whole, or the timing of putting these recommendations into effect? It is so easy to shelve a report on the grounds that something has already been done".
I could not have put it better. We have had no word so far of what conclusions this Government have reached since they took office.
I certainly do not want to widen the debate or take up time, but I cannot resist the temptation of saying very briefly that the Government's handling of the Royal Commission's recommendations in general has not been such as to gain unalloyed approval. Much has never been discussed at all. Some useful administrative changes have been made, but on "no fault" for road traffic accidents we were met with what I can only describe, in my kindly way, as a marked lack of sympathy; and on products liability, notably drugs, we were eventually met by the most unhappy conclusion that the Government were set on allowing the defence of development risks and that the private citizen was to be left to be the guinea pig for experiment.
Today we come to the recommendation on vaccine damage. It is quite clear that the 1979 Act cannot continue to hold the field indefinitely. If £10,000 was right in 1979 it must already be out of date, and even with a Conservative Government it must become increasingly out of date as the years go by. In the serious case, it is inadequate. What is £10,000 for a child whose whole life has been blighted and a family whose happiness has been destroyed?
I shall not complicate matters by reminding the House this afternoon of the recommendations made by the Royal Commission about calculating damages and deducting social security benefits, although this is all part of the whole picture. I simply end by saying that Parliament has already decided, with the unqualified approval of the Conservative Party, that, because vaccination is carried out in the interests of the community and at the urging of Government, notwithstanding a known element of risk, there is a special responsibility on the Government to do something about those few cases where the procedure goes badly wrong. This debate is showing beyond a peradventure that the 1979 Act is imperfect in its operation. But it was not, and was never intended to be, the final answer. Like other noble Lords, I wait with great interest to hear what the Government propose to do next to meet a need on which they have been silent for too long.
3.52 p.m.
Baroness Faithfull: My Lords, I join others in thanking the noble Lord, Lord Campbell of Alloway, for introducing this subject today. With time so short I confine myself to social factors. As the noble Lord, Lord Winstanley, said, nothing is outside the scope of the noble and learned Lord who is to reply.
I wish to make three points. One is to consider first the parents of the children who have suffered as a result of vaccination or immunisation. They have been disappointed for too long. They were given hope that their cases would be dealt with and understood. The noble Lord, Lord Allen of Abbeydale, referred to this. Their cases were accepted, but temporarily, under the Vaccine Damage Payments Act 1979. They were given to understand by the Government then in power that they would be assisted, supported and helped. They were also given to understand by Members of the then Opposition, the Conservative Party, that they, too, sympathised with the parents' plight; and yet they still wait.
My second point covers the question of society as a whole. If the climate of opinion is against immunisation then more children will sustain illnesses, particularly whooping cough, measles and diphtheria. It is Her Majesty's Government's responsibility to create an atmosphere of trust and confidence which will establish parents' willingness to accept vaccination for their children. Nothing could help such parents more than to know that should something go wrong they will be assisted and helped.
My third point covers the wider field of disabled and impaired children. The noble Lord, Lord Allen of Abbeydale, referred to this group, and I know that the noble Baroness, Lady Lane-Fox, will be talking about them as well. My plea is for two things. The first is that children who are to be vaccinated—I stand to be corrected by the noble Lord, Lord Hunter of Newington, here—should be better screened with regard to their history and background, and that parents should understand exactly what is expected of them. My second plea is that there should be a rationalisation of the whole system of help to the handicapped and the impaired. If one is a social worker in either a voluntary organisation or one of the statutory services it is extraordinarily difficult to know exactly what help can be given to the handicapped and the impaired, how it can be given and through what channels it should be given. There needs to be a whole re-think of help to all handicapped and impaired children. But in the light of the present situation with regard to children who suffer from vaccination, if the finances of the country are such that we cannot help all children at this time there should be an overall policy, perhaps implemented in part to one group and later on to another.
It would be of enormous value and help to all parents of handicapped children, and particularly to the parents of those who have suffered from vaccination damage, if, as I said earlier, the Government could rationalise the whole situation so that there is one Act of Parliament, or one section of an Act of Parliament, dealing in total with all the help and support that can be given to the parents of these children.
3.57 p.m.
Lord Hunter of Newington: My Lords, may I add my thanks to the noble Lord, Lord Campbell of Alloway, for introducing this debate. As has been said, in the last decade the number of infants vaccinated against whooping cough has dropped. In 1972–73, 79 percent. of children were vaccinated. In 1980–81 that had fallen to 39 per cent. However, the evidence published by the Department of Health and Social Security in May 1981 showed that benefits far outweighed the risks of damage caused by vaccination. But suspicion and anxiety remain, and the Vaccine Damage Payments Act 1979 is part of the background. Does it contribute to anxiety? Is it a good Act? Should the unfortunates who suffer from the adverse effects of innoculation and treatment be compensated in this way? That is something, as has already been said, that will have to be reviewed.
The United States are moving steadily towards a declared policy of the eradication of measles. In England and Wales we are now achieving a vaccination rate of about only 50 per cent. and it should be noted that there are about 100,000 notifications of measles each year. In 1981 in the United States of America there were 2,961 cases out of a population that is four times our size. Yet the belief that the public acceptance of vaccinations has dropped as a result of whooping cough is not so. Diphtheria, tetanus and poliomyelitis innoculations have not fallen. The reputation of the measles vaccine may still be suffering from the problems caused by side effects and the efficacy of the early vaccines.
The present excellent vaccine has a poor reputation. Why? Part of the success in the United States in eliminating measles has been the enforcement of laws requiring immunisation before school entry. Is a national policy of measles eradication warranted in the United Kingdom? Mumps eradication is also being seriously considered in the United States. It is urgent that we begin to understand our problems in the United Kingdom—and that is highly relevant to the Bill that your Lordships are discussing and to any of its successors.
Vaccines have two purposes, as has been said by the noble Lord, Lord Winstanley—one is to protect the vaccinated person and the other is to reduce the transmission in the community. For example, vaccine efficacy in poliomyelitis refers to the patient, but there is a great deal of debate about the effect on transmission. Therefore, vaccination of the individual in that case is all important. In smallpox there is a difference: the disease is controlled in the individual and in the community by the vaccine and smallpox, as has been said, has gone a further stage. Control of transmission has been so effective that it is now wrong to risk any reaction to vaccination for all except those specially exposed to smallpox. But when smallpox was rife, in spite of the risks there was no question about vaccination. The danger to the individual and the danger of spread throughout the country made all this very necessary.
Therefore, in what way is whooping cough different? The incidence of damage may be almost as great as with smallpox, but whooping cough has a low mortality. It occurs in cycles every two years or so and it usually affects young children. The size of recent
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epidemics has been such because of the increase in the number of "susceptibles" in the population. But all the evidence suggests that the vaccine protects only against the clinical disease—the dynamics of transmission have not changed, only the size of the outbreak.
Fifty years ago, the young mother was fearful that her child might die. The enormous improvements in maternity and child welfare services have resulted in a situation where the mother's main concern now is not that her child might die but that it might be deformed or suffer some disability. If we combine this already present concern with partial protection only, low mortality, and no danger of a widespread epidemic like smallpox, are we not beginning to see the reasons for the lack of enthusiasm? But attempts to improve this vaccine must continue and we could easily finish with a situation similar to that with regard to measles, where there is an excellent vaccine.
The other important part of our debate concerns compensation. Industrial and other compensation Acts are all related to disease, and the proof is first concerned with identifying the disease and its effects and then the extent of the disability—the proof of pneumoconiosis rather than of chronic bronchitis, even though the symptoms and the disability may be the same. It seems to me that future legislation in a welfare state should be concerned with the degree of disability or the kind of disability rather than the cause, unless that cause affects the prognosis—the future. The patient is a human being who requires care if he is disabled. I feel sure that, as matters develop, the present Act will not prove satisfactory for such a new purpose. What we need is improved provision for all disabled.
4.4 p.m.
Lord Auckland: My Lords, my noble friend Lord Campbell of Alloway, who asked me to take part, has the whole House in his debt for initiating such a very important and timely debate. The speech which we have just heard from the noble Lord, Lord Hunter of Newington, has covered some very interesting medical aspects of the subject.
There is no doubt that protection against such distressing complaints as variola and whooping cough are essential, certainly as regards the latter. I would ask Her Majesty's Government whether there is any indication that vaccine today is any safer than it was, for example, a decade or two ago, when so many tragic incidents took place. It must be stressed that there are a very small number of such cases, but one handicapped child is as tragic for one set of parents as 500 handicapped children are to 500 sets of parents. As I understand it, at the time when the admirable Pearson Report was published there were 240 child victims as a result of vaccination for whooping cough. I wonder, can my noble and learned friend on the Woolsack confirm whether that number has increased?
One of the problems arising on this particular matter is that we perhaps do not know whether there is any vestige of a chance of a partial recovery from the symptoms of vaccinations that go wrong. I and other Members of your Lordships' House have seen vaccine damaged children. If there is such a chance then

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nobody would be happier than Members of your Lordships' House.
The whole question of compensation is extremely difficult. I am the last person to delve into the law. However, one thing is quite certain: anybody who has seen or worked with handicapped children will know the special attention that they need, especially as regards keeping warm. As has been said by other Members of your Lordships' House, £10,000 as arbitrary compensation is totally inadequate, and indeed would have been totally inadequate 50 years ago. I do not wish to pursue that point, but there is one matter that I would like to pursue. My understanding is that not every parent has yet received the full £10,000 compensation. If I am wrong as regards that matter, then I shall, of course, stand to be corrected, and I very much hope that I am wrong.
Paragraph 1396 of the Pearson Report says that virtually all the medical bodies—the Royal College of Physicians and Surgeons of Glasgow; the British Medical Association; the Standing Medical Advisory Committee of the DHSS and others—have stated quite categorically that there was a reasonable case for paying compensation where vaccination was proved as the cause of the damage, and in those circumstances it should be paid without reservation. That is an important point to bear in mind.
The argument has been put forward that the parents of children who are born with inherent conditions such as Down's syndrome are not subjects for compensation. There may well be allowances under the various National Insurance Acts; but here, as has been pointed out by other noble Lords, we are dealing with a situation where the present Government and previous Governments have, quite rightly and quite properly, spent public money on urging parents to have children vaccinated.
Those of us who are parents and, indeed, grandparents, are only too happy and too concerned to see that this is done. Anyone who has had whooping cough, or has seen whooping cough, knows what a very unpleasant condition it is, to say the least. At the same time where a Government give, if not a directive, then a persuasive aspect to a matter, and where obviously, through no fault of any Government or indeed necessarily of the medical profession, there is an accident whereby a certain amount of vaccine may in some way be contaminated so that its use produces terrible tragedies, such as are referred to in this debate, I believe that central Government are very seriously committed to paying adequate compensation.
In the time at my disposal in this debate, and not being a lawyer, I would be the last person to try to adjudicate on adequate compensation. Anyone who has a brain-damaged child, or who has seen braindamaged children, knows full well that no amount of compensation whatever can help in the sense of enabling that child to lead a normal life. Therefore, I would conclude by asking Her Majesty's Government to give very sympathetic consideration to the very important Motion which my noble friend has moved, because although these damaged children are small in number, the effects upon them and their parents are too grievous to mention.
4.12 p.m.
Baroness Lane-Fox: My Lords, I should like to add my tribute to my noble friend Lord Campbell of Alloway for initiating this debate and for bringing to it the depth of his legal knowledge. The reason for my short intervention is to express certain views forged through observation and experience, to some degree views that differ from those put forward so far. I would make it clear at once that in no way do I seek to belittle the huge burden placed on parents, families and the community, and perhaps most of all on the patients concerned, as the result of the kind of damage that is under discussion. I believe that we are all of the same mind in thinking that it is virtually impossible to equate such disasters in terms of cash; but, as with other horrific happenings, it is all too easy to turn on the taps of emotion in powerful doses and so largely submerge logic and reality. That course is far from the one that I wish to pursue today.
Disasters and tragedies strike and they have to be dealt with as they occur. For 10 years I worked very closely with the Disablement Income Group—known as "DIG" for short—and for another six years I have been associated with them. Not surprisingly, I uphold the principles of their campaign for a "national disability income". This is based on the belief that it is not the cause of disability but the degree of disablement and handicap that should be concerned in calculating the amount of financial help to be given. We believe that this is the right way forward to break out of the escalating and enduring unfairness caused by the different levels of financial assistance awarded for the same degree of handicap—the same degree of potential loss of earnings suffered and of extra expenses incurred.
Let me suggest to your Lordships that there are three chaps who meet in a centre and who are all disabled to the same extent. One was industrially disabled, so he receives about £120 per week; the next is equally immobilised through multiple sclerosis, so he is only eligible for the standard rate of invalidity pension at about £28 per week; the third, similarly disabled, was in a road traffic accident and had received over, say, £100,000 in compensation. Is this the kind of justice we want for disabled people in the future? The more complicated the settlements for such compensation, arranged by tribunals or courts, or on the lines of the Pearson Report or through vaccine damage provisions, the further we slip back down the road of favouring groups of victims at the expense of others who still rank financially as second and third-class citizens.
To compare with the vaccine-damaged, there are the autistic, the cerebrally-damaged or the Down's syndrome children to measure against those we are discussing, for theirs is a similar handicap. All of us who are old polios are well aware of the great benefit to humanity endowed by immunisation, an endowment which, because of its efficiency in ridding this country of the scourge of poliomyelitis, is not always properly appreciated, especially by the young. Parents of children brain-damaged by an attack of whooping cough, parents of children who have died of it, must feel this way about the whooping cough vaccine. The great fear is that debates such as these, and even more so those on television, which refer only

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to the damage done by vaccine, can discourage immunisation among harassed parents, despite what the noble Lord, Lord Hunter, said in his otherwise very wise words.
Perhaps it is as well that some of us who succumbed to polio survive as ugly reminders of the effects of an attack of polio. In my case the attack was in 1930. I was a lucky one, for so many victims died in other epidemics. We survivors were thrilled in the 1950s to hear that an effective form of combating this dire disease was about to surface. Our optimistic hopes that this meant a cure were soon shattered, but the bitter disappointment was somewhat ameliorated by news that the Salk vaccine could render children and people of all ages safe from its threats.
Polio attacks the nerves of the spinal column, damaging and paralysing muscles, killing many people and maiming more. It is those of us who have experienced the real horror of its effects who cannot remind people too often that immunisation is the only—I repeat, the only—protection against this virus. So far it has done wonders in freeing the United Kingdom of all but occasional cases. But poliomyelitis is still rife overseas, and unless we keep our advantage, the virus can too easily take hold again here. Once it has damaged a victim, there is precious little that medical science can do to repair the damage.
I should fail in my duty as an "old polio lag" if I did not remind your Lordships that to alarm the public of the effects of vaccination is a very dangerous step. Those of us who really know are most deeply grateful for this protection, and others should not be frightened out of accepting it. On the other hand, we look to the medical profession to get the screening of children right and the vaccine perfected for whooping cough, as in other cases. If matters of compensation demand to be disentangled, could they not be dealt with quietly and discreetly, with the least possible publicity—in fact, with the minimum of publicity and causing the minimum of panic? These health hazards caused by spreading alarm could then be eliminated.
4.20 p.m.
Lady Saltoun: My Lords, I too should like to thank the noble Lord, Lord Campbell of Alloway, for raising this distressing subject this afternoon. While we know that if they have been warned to look for them there are signs by which a mother can tell if a baby is reacting adversely to the whooping cough vaccine, such as rolling of the eyes and raised temperature, et cetera, there are a great many mothers who, even if warned, would not notice these signs: the young inexperienced mother of a first baby, for example; those who leave their babies with baby minders; the mentally deficient; the drunkards; the drug addicts; and even those who are just rather vague and unobservant. Many mothers do not have a thermometer in the house, nor could they read it if they had. Therefore, I do not think that the onus can be put on the mother in all cases.
I suppose that the Government could make immunisation compulsory, as it is in France, and then take complete financial responsibility for any cases which went wrong. But I dislike compulsion in these things and I would rather see the Government accept complete financial responsibility for those few cases as the carrot with which to encourage all mothers to take
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the very small risk involved in having their babies vaccinated rather than the much greater risk to them and others of not having them vaccinated. As the noble Baroness, Lady Lane-Fox, said, no money can compensate the victims, but it can enable them to suffer in more tolerable conditions.
4.22 p.m.
Lord Renton: My Lords, if this debate were limited to a conflict between doctors, parents and mentally handicapped children with lawyers intervening I would, if I may say so with due humility, be the personal embodiment of that conflict because I am a lawyer, the son of a doctor, and a parent of a severely mentally handicapped daughter. But of course the issue in the debate is not simply about that conflict, because, as the Pearson Commission argued in chapter 25 of their report, to which my noble friend Lord Campbell of Alloway referred, it is where the Government and local authorities have, for reasons of public policy, either attempted to make vaccination of one kind or another virtually compulsory, or encouraged it so much, that their responsibility is engaged.
But if we are looking at the benefits of vaccination from the point of view of the general public interest, we should also bear in mind that every time a mentally handicapped child is born, or a person receives brain damage for whatever cause, if it is severe damage then the burden on the public is very considerable indeed. Some people say that it should be even greater than it generally is; and that is really the foundation of what my noble friend Lord Campbell of Alloway invited your Lordships to consider when, having posed the problem, he asked your Lordships to suggest what should be done. In a moment I shall come to a suggestion which very much follows what the noble Lord, Lord Allen of Abbeydale, said.
May I just put this issue into the perspective of mental handicap, because I think it is right that we should do so. About one child in a hundred is either born mentally handicapped or becomes so through brain damage at birth or later. One in a hundred. A remarkably constant figure which I believe is constant throughout the Western world. Many of the causes of mental handicap—and nobody knows how many different causes there are—are unknown. Even when causes are occasionally discovered—as in the case of whooping cough one has clearly been discovered, as the noble Lord, Lord Winstanley, pointed out—it is not the fact that a cure is discovered with it, because, broadly speaking, there is no cure for severe brain damage. This is why this is such a serious issue.
My noble friend Lord Campbell of Alloway said that we owe a moral duty towards the children who suffer brain damage. I would point out that it is a twofold moral duty. It is first and foremost a moral duty to prevent the damage, and then if the damage is not prevented it becomes a further moral duty to compensate, and compensate fully. No nonsense about £10,000, or 80 per cent. I suggest that those two duties are mutually dependent in this way, if I can describe it. I am not sure that I am capable of doing so, but I shall try.
If full compensation is not payable, may it not be that Governments and local authorities will be less careful to prevent the damage? The public purse will

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be less at stake. If full compensation is payable then Governments, local authorities, doctors and parents will surely think twice before running the risk of causing brain damage. Because one must observe—and a lawyer would agree with this—that if some way was found of having somebody other than the parents as the litigating next friend on behalf of the child, who may never understand what has happened, then the parents could indeed in certain circumstances be sued successfully for having agreed to the cause of the brain damage.
However, that may be a bit hypothetical, and so let me conclude by saying this. I agreed with the analysis of my noble friend Lord Allen of Abbeydale—if I may presume to call him that as he succeeded me as chairman of the Royal Society for the Mentally Handicapped, of which I was then so kindly made president—and I should like to say that, although I am not in favour of all the proposals put forward by the Pearson Commission, I support the recommendation, at the end of Chapter 25, that where vaccination has been done in the interests of the community, the Government or local authority, as the case may be, should be strictly liable in tort for severe damage suffered by anyone as a result. "Strictly" liable is a word which has become a term of art among lawyers and carries liability beyond the present common law liability. It follows from that recommendation, if it is accepted, that the 1979 Act should be repealed and replaced.
4.29 p.m.
Lord Elwyn-Jones: My Lords, the House will be grateful to the noble Lord, Lord Campbell of Alloway, for raising the important questions of public policy which arise from vaccination against whooping cough. It has enabled us to have not only a wide-ranging but an exceptionaly well-informed debate in which great expertise medical and, dare I say legal, up until now has been brought to bear.
Our failure in regard to whooping cough to catch up with the great achievements in the protection of the population against diphtheria—to coin a phrase of the noble Baroness, Lady Lane-Fox, I am an old diphtheria lag myself; fortunately a disease more amenable to treatment—and then add to that polio and tetanus is clearly a matter of concern. Whooping cough, as we all know and have seen with children is a distressing and dangerous disease, and it is indeed worrying to learn that apart from the cyclical element of which the noble Lord, Lord Hunter, told us, there has been something of an epidemic this year.
I think the message that has emerged from this debate is that the disease is far more dangerous than the vaccine and that the higher the proportion of children vaccinated, the greater are the prospects of controlling whooping cough. Indeed, it is excellent that the Prince and Princess of Wales gave the lead to the country by the vaccination of Prince William. I am glad to say that all my nine grandchildren have been vaccinated, too.
The need to inspire confidence about vaccination is paramount, and it requires a climate of trust and confidence. A valuable study produced by the association of parents of vaccine-damaged children—to which the noble Baroness, Lady Faithfull, referred me
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timeously this morning—in relation to its question, "What is wrong with vaccination?" suggests three ways in which improvement could be made: first, by promoting vaccines which are safe and can be shown to be safe; secondly, by educating parents about vaccination; and thirdly, by acceptig responsibility in cases where damage results from vaccination.
With regard to the first—promoting vaccines which are safe and can be shown to be safe—I confess that I was a little troubled by the intimation of the noble Lord, Lord Winstanley, that perhaps it is better to abandon the vaccination campaign at this stage, because of the lack of confidence in the vaccine. I do not think the noble Lord actually meant to say that, but it sounded dangerously like it, if I may dare to criticise him in those terms, as he so powerfully turned on my noble friend Lady Gaitskell earlier, and I think I have interpreted him correctly. There is, as the noble Lord, Lord Hunter, said, room for improvement in the quality of the vaccine, and that leads me to ask a question of the noble and learned Lord the Lord Chancellor of which, I am sorrry to say, I have not had time to give him advance notice. There was a report in The Times of 19th March of this year which read:
"The development of a safer whooping cough vaccine could be delayed because of cuts in the budget of the government-funded research laboratories at Porton Down, Wiltshire. Britain's lead in the field of biotechnology and genetic engineering was threatened by a cut of 4 per cent. in the laboratories' revenue, Dr. Peter Sutton, the laboratories' director, said yesterday".
It went on:
"Programmes involving the development of anti-cancer drugs, the production of synthetic human growth hormone"—
and the following I emphasise—
"and safer vaccines, were all threatened".
Perhaps the noble and learned Lord can reassure the House about that. It is a disturbing state of affairs if those are the facts. If we cannot be told now, perhaps we can be at some appropriate time.
The second theme of the parents of vaccine-damaged children was the importance of educating parents about vaccination. I understand that the Government have embarked on a substantial propaganda campaign of information, but I do not know whether the Lord Chancellor can tell us to what extent that has got home. One hears of areas, certainly in the East End of London, where, I am afraid, people are ignorant about the availability of vaccination and where its value is still not fully learned, particularly in the centres where many of the immigrant population reside, and perhaps that can be looked at.
The third issue, the need to accept responsibility in cases where damage results from vaccination, has given rise to most of the difference—which has been more of a difference of emphasis than conclusion—in this debate. State provision in other countries has long been regarded as a necessary element of immunisation policy. As we have been told, in France it is compulsory, and provision in Germany is most generous and elaborate.
When we faced the problem in 1978—when there was one of the recurring phases of an epidemic—I confess that we had to tackle the problem with not really full information as to all the implications of immunisation and vaccination. It was a time when the economic problems of depression and recession were beginning to hit the country at the end of 197 8, and we

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laboured long and anxiously as to what should be done in the situation that had arisen. No British Government had done anything about the problem until we moved in 1978. I am not making a political point of that, at any rate not deliberately, but that was the situation we faced; the need for action to help the parents of children was emerging more and more clearly and impressively.
It was in that emergency situation that we decided to act as quickly as we could to give at any rate some immediate emergency help to the parents of those children. It was in those circumstances that the machinery of the 1979 Act was devised, and we gave effect to the payments made in 1978. It was certainly not intended as a permanent piece of legislation—the reading of it makes that painfully clear—but it was intended to give immediate first-aid, and the 750 families who have benefited from the £10,000 will, no doubt, think it was something good to have done.
We are now more than four years later, and I agree with the general view that the whole of the handling of this matter, and the operation of the Act, needs to be reviewed. I should have thought that the Act itself needs to be reconstituted from top to bottom as to definition of answerability and liability, as to the areas of damages which ought reasonably to flow and as to the machinery for determining whether it should be the courts or a tribunal which should be used to deal with the situation. Before I elaborate that further, I suggest that in the meantime there is an immediate case for raising the figure of £10,000 bearing in mind what has happened with inflation since that time. The £10,000 of 1978 is in purchasing value now about £6,500. Therefore if accepted, the suggestion that there should be a review and an inquiry, which could last for a substantial time, would mean that the present unsatisfactory provisions would continue for an unacceptable period of time.
We find that it is not so easy when we come to answer the Question of the noble Lord, Lord Campbell of Alloway, who modestly put it, and who, equally modestly, did not seek to answer it, but sought guidance. My own view moves towards that which has been expressed in the debate, I think almost generally; namely, the conclusion that was arrived at by the Royal Commission itself. It was good that we had the noble Lord, Lord Allen of Abbeydale, once more to clarify the report for us. I think that the noble Lord has explained the relevant paragraph, but since time is favourable and I shall not be eating into the time of the noble and learned Lord the Lord Chancellor, thanks to the wonderful economy exercised by those who have preceded me, I should like to read the passage. Paragraph 1409 states:
"We think that the basis of liability should not be fault, but should be strict; that is to say, that where a plaintiff can show on the balance of probabilities that the injury suffered was attributable to the administration of a vaccine on the recommendation of the Government or a local authority, he should be entitled to compensation. Subject to these matters of causation and fact there should be no defences".
There follows the important sentence:
"We reach these conclusions because vaccination is recommended by the state for the benefit of the community, and where it causes injury the state ought to provide compensation as part of the cost of providing protection for the community as a whole".
That is an admirably stated principle, which I venture to think will be universally accepted in the House.
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I think that there was also some attraction in the choice of words of my noble friend Lord Mishcon: where there are reasonable grounds for inferring that the damage or injury was caused by the vaccination. Perhaps consideration might be given to that form of words.
Now, who should assess the damages? Two suggestions are made. The Commission favoured the courts. My noble friend Lord Mishcon favours tribunals; not of course the limited kind of medical tribunal referred to in the Act, but a tribunal of a more substantial character, with greater powers. I feel open-minded about that. In the tribunal proceedings there is advantage in the way of speed, to some extent in the informality, and in cheapness; and I know that the noble and learned Lord the Lord Chancellor is not over-enthusiastic about adding to the burden of the courts which, as I think we are all fully aware, are already very heavily burdened.
Therefore, I should think that there is much to be said for considering the possibility of the tribunal being the adjudicating body, but in saying that I must add that, as we are constantly told, the defect of tribunals is the unavailability of legal aid. However, the House struck a blow in regard to mental health tribunals and, I think, ensured that legal aid was available for such tribunals. That is a good precedent in regard to which in due course we received the assistance of the noble and learned Lord the Lord Chancellor.
I must not abuse the patience of the House, but I should like to mention one other, minor matter; namely, that in addition to raising the £10,000 in the interim period, so as to keep in line with inflation, something should be done in regard to the capital sum received under the Vaccine Damage Payments Act when assessing supplementary benefits. I understand that in another place in July 1981 an assurance was given by the right honourable member for Norwich, North, to the effect that the Government had in mind that the capital sum should be disregarded in respect of assessment of supplementary benefits. I think that such an arrangement would be well received in the House, and certainly by the victims.
Again, I return to the great responsibility that lies upon us in the debate to see that help is given to both the children and their parents who may have been injured in the pursuit of the health of the country as a whole.
4.45 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, before I embark upon a wider range of topics, perhaps I can deal with two matters of fact about which I was asked by two of the participants in the debate. First, my noble friend Lord Auckland thought that nobody had been paid the £10,000; at least, that is what I understood him to say. All the successful awards have been of £10,000, and where they have been allowed, they have been paid, subject of course to a very few pending cases.
The second question was asked by the noble and learned Lord who has just resumed his seat. I can tell him that research into alternative whooping cough vaccine at Porton Down is continuing undisturbed by any financial stringencies. Results so far are promising.

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I am not quite sure what that last sentence means. But I can also say—I think again in reply to my noble friend Lord Auckland; but certainly one noble Lord asked me—that since 1968 whooping cough vaccine has improved. It has been made to World Health Organisation standards, and has an additive to reduce side effects.
Those are the questions of fact which arose, and I now address myself to the series of speeches, so admirably brief, of the participants in the debate, which was very well introduced by my noble friend Lord Campbell of Alloway. To some extent I feel that I should like to express my own thoughts. Of course in the main I reply on behalf of the Government, but I have thoughts of my own and I think that just as occasionally one declares one's own interest in a subject, on a matter such as this it is rather difficult not to give vent to one's own convictions.
I start with the question that was certainly raised by my noble friend Lord Campbell of Alloway, and I think reverted to again during the course of the debate. I think that it lies at the bottom of one's whole analysis of the problem. The question is: what should a doctor tell a parent? Of course if he is an honest man, he must tell the parent that he cannot guarantee the child whose vaccination is proposed against damage of any kind, or even against damage of the severe kind that we have been discussing. There is no absolute certainty, and that is true just as much of other types of vaccination as it is of whooping cough vaccination, on which much of the discussion has centred. It is as true of polio vaccination as it is of whooping cough vaccination, and it is true in regard to any one of the nine varieties of disease that are covered by the 1979 Act.
However, reverting to whooping cough in particular, I think that I agree with what I understood the noble and learned Lord to be saying: that the doctor's duty is to compare, so that the parent understands it, the danger of having one's child vaccinated against the danger of not having one's child vaccinated; and that if—I was going to say "my instructions"—my departmental brief, is correct (and I have done my best to verify it by cross-examining the experts behind me) he would be saying something like this. He would be saying that there has been this year an epidemic of whooping cough; that there have been, I think, between 58,000 and 60,000 cases; and that that resulted in the deaths of 13 children.
Of course one cannot treat this absolutely mathematically, but it means that there is a chance of 1 in 6,000, if a child catches whooping cough, that he may die. I was also told, although this cannot be reduced to a statistic, that the after-effects of catching whooping cough and not dying can be at least as serious as the after-effects that we have been discussing as the consequence of vaccination.
Of those who are vaccinated, 1 in 300,000 injections—and, as there are three injections, 1 in 100,000 cases—is liable to suffer severe damage as the result of the vaccination. What I think the doctor ought to tell the notional parent, the parent who has to make up his mind, is that, to the very startling extent that I have been seeking to describe, it is much more dangerous not to have your child vaccinated than to
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have it vaccinated. I think that that really ought to be said, and I am sure that there has been a failure either on the part of the doctors or of the Government or of the parents to understand that very simple fact—to explain the drop in the take-up rate of whooping cough vaccination. That I think is a moral problem. That leads me on to say that I think that there has been too facile an assumption by the Pearson Commission—and, may I say, I mean no disrespect to the commission, for I was partly its putative father some years ago—that the reason why we want children to be vaccinated is one of public policy. I do not wholly accept that.
I will tell a very short anecdote, if I may, to illustrate why I say that. About 30 years ago, about 1957, I was Minister for Education. In the early part of that year (I think it was) the Lord President of the Council of the day (and I think it was the then Earl of Home) went away from the country and I was left holding the brief of the Lord President of the Council. I had then to decide—and, obviously, if I had made a mistake, I should have had both deaths and disaster on my hands—whether to import a thing called the Salk vaccine. That was because the medical advice was that there was going to be a polio epidemic that summer and that, if there was a polio epidemic there would be deaths and there would be permanent disability—as the noble Baroness, Lady Lane-Fox, explained.
The argument for importing the vaccine was that there was only a very small quantity available of a British vaccine which was safe; and, therefore, if I did not import it, there would be a large number of children who would not have any vaccine at all. The argument against importing it was that there had recently occurred a thing called the Cutter incident, as a result of which, in the United States (which is where the Salk vaccine came from) a number of children had not only caught polio from the vaccine but had died from it or had suffered permanent injury.
I knew very well that if I imported it, and that happened, I should have this on my conscience for the rest of my life, and I also knew that it would be something which must lead inevitably to my own resignation; so naturally I took the problem very seriously. I took it, perhaps, a little more seriously, because my own two young children, as they then were, were among those likely to be vaccinated if vaccination took place. I asked the Secretary of the Medical Research Council, who was advising me, one very simple question: "Was it safer for a child to be vaccinated, bearing in mind the danger of another Cutter incident; or was it safer for him not to be vaccinated?" Like a good professional he gave me a positive answer. He said: "It is much safer to run the risk of vaccination than not to run the risk".
I then applied to my own children exactly the same standards that I applied to the children, viewed as a group, of every citizen of this country. And I applied to the group of the citizens of this country the same standards as I applied to my own children. You can call that (if you like) a decision of public policy; but I do not think it was. I think that it was a perfectly straightforward decision about where the interests of children lay, each child individually viewed as an individual.
Therefore, I challenge the view which has been put forward—and accepted, I think, with too great a

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facility by nearly every speaker in this debate—that the mere fact that the Government are on the side of vaccination gives the disabled child who suffers from the vaccination a better chance than the child who suffers and who has not been vaccinated—and, as he is only about three years old, he has no responsibility at all—who has caught the disease and who suffers permanent disability from it.
That brings me back to a point which has been adumbrated time and time again in the course of this debate; that is, that what this country really lacks is a coherent policy towards disabled people. It has never pursued it. I remember that at the time of the Attlee Government I had a tremendous row across the House with a Member of Parliament, Dr. Hyacinth Morgan. The policy of the country has always been to select particular groups of disabled people and to give them favoured treatment—industrial injuries over non-industrial injuries, people who have had accidents as a result of negligence over people who have had accidents in the home, caused, perhaps, by their own negligence, or inevitable accident.
If you are to carry out public policy, you will never come to terms with conscience, in my mind, until you have a coherent policy relating to all groups of disabled people and their means. I would rather not use the word "compensation" in this connection because compensation raises a number of very difficult philosophical problems. Having said that—and I have said it off my own bat—we are a million miles away from having got such a policy. But I, myself, am glad that the noble Baroness, Lady Lane-Fox, referred to this, as did a number of others who have taken part in this debate. I think that my noble friend Lady Faithfull, did so, as did the noble Lord, Lord Hunter of Newington, and the noble Lord, Lord Allen of Abbeydale.
Having said that, I come to the problems surrounding the 1979 Act. May I start with this? Irrespective of the Act, a child disabled through vaccine damage or a disabled child for any other reason has a chance, such as it is, of an action of negligence either against the state, in some cases, or against the doctor or a driver in other cases. A doctor is likely to be insured and the driver must be insured by law and that is the first option—and he gets a much higher rate of compensation in that way than in any other way. He will, in addition, and in any event, be entitled to an array of social benefits from the Welfare State. These will include—and these are important from the point of view of what we are discussing—mobility allowance and attendance allowance, which together can amount to £45 a week. Those are not affected by anything that we have been discussing today.
The Pearson Commission was set up I think during the period of office of the Conservative Government and reported during that of the Labour Government. Its report on this subject was known in advance of the actual publication in about 1977. It recommended at that time, so far as I remember, that a severely handicapped child should get a weekly allowance of £4–00 a week. That was costed by the Commission at something like £15 million. The comparable figures today would I suppose be about £30 million and £7–50 a week. No Government so far, neither the Labour
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Government nor ourselves, have at the moment felt able to implement that.
Of course, in evaluating what one gives to any group within the field of social benefits one must bear in mind that all groups must be considered, and to give it to one group in preference to another is a difficult matter of priorities as well as a question of expense. If you give it to one favoured group you will probably reduce the chance of a general increase in benefit. This is a difficult question of policy. The House will not expect me to develop this today, but of course that is true. Equally, mathematically it is obviously true that if you raise the maximum limit of £10,000 to its equivalent today you will be spending money on that rather than on something else. I am sure that my right honourable friend who is responsible for these things will take on board the various points which have been made by speakers on this point.
The House may have gathered from what I have already said that I share a good deal of the scepticism about the nature of the 1979 Act, which was a lump sum payment of £10,000 for 80 per cent. disabled children over the age of two years at the time when the claim was made or, if the child died, at the time the child died. These are obviously arbitrary figures. The conception of the Act is an arbitrary one. I can see why some noble Lords have said, "We must think of something a little more logical than that". I must say to the House that if an Act has been running only three years, unless you are going to replace it totally, which is an option which has been mentioned by more than one speaker, you cannot expect to be tinkering about with it much except on the figure of, say, £ 10,000. You cannot alter its whole basis.
This is where I fall a little into doubt about some of the things which came from more than one speaker, notably from my noble friend Lord Campbell of Alloway. He challenged the principle of causation. I do not see how that can be done within the ambit of the Act. The Act is an Act for the benefit of vaccine damaged children. Therefore, it cannot be for the benefit of non-vaccine damaged children; that is to say, children who suffer from a defect after vaccination but not because of it, or without having been vaccinated at all.
May I say to the noble Lord, Lord Mishcon, that the standard of proof which is required of the Secretary of State and of the tribunal is that of a balance of probabilities. It is no higher than that. I do not know that one can improve upon it. It is true—and I have statistics which, if pressed, I would be compelled to admit would bear it out—that among the seven tribunals in different parts of the country there are striking differences in the proportion of claims which are allowed. But, nonetheless, I doubt whether we can improve on the situation.
As regards the dispute about tribunals versus courts, I must say that I have no doubt whatever in coming down in favour of tribunals and against courts in this particular field. Each tribunal consists of a legally qualified chairman and two medical experts of consultant status. They have a greater expertise in deciding the only question that they have to decide, which is causation, than any other body I can think of. With respect to my noble friend Lord Campbell of Alloway, when it gets to the tribunal stage reasons have to be

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given. That follows from the general law. The work of the tribunal is subject to review, although I think it has not been challenged in the courts as yet. It is subject to review under Order 53 of the Rules of the Supreme Court if the tribunal acts on the wrong principles, or there is an error of law appearing from its reasons. I think that the machinery is probably as good as one can get if one is going on with the present system.
I do not think I ought to speak any longer. The House has been very generous to me, and I may have taken more time than I ought to have taken in a short debate. I apologise if I have in fact done so, because this is the first short debate to which I have ever replied. I should like to conclude by saying that the debate has been of great interest. I shall make quite sure that the remarks of each of the speakers who has participated are conveyed to my right honourable friend. If there is anything I have said which is not strictly accurate, I shall write and correct it. If there is anything that my right honourable friend would wish me to add, either he or I shall write to the speaker concerned. I share the gratitude of every speaker to my noble friend Lord Campbell of Alloway for having raised the matter in this short debate.
5.7 p.m.
Lord Campbell of Alloway: My Lords, I am very grateful to all noble Lords who have spoken in this debate and for the very kind things said about me. I realise how difficult the subject is. I beg leave to disagree fundmentally, but of course respectfully, with my noble and learned friend the Lord Chancellor in what he has just said; not the last matter but the one before it where, joining hands with my noble friend Lady Lane-Fox, he elevated this debate to another plane, a plane to which this debate in truth was not intended to go. Here was the way in which—I hope it was legitimate to do so—I sought to limit this debate to a situation where brain damage was occasioned by a certain type of injection with the weighted factor.
My noble and learned friend the Lord Chancellor takes the same point, as I understand it, which was taken by my noble friend Lady Lane-Fox, that you simply cannot differentiate. It is morally wrong. It is a moral approach between different causes of disability which relate to the same category. Surely it cannot be right to approach this problem—which is a serious one, and this is acknowledged on all sides—in this way. If we are not going to have a national disability income—and. with the utmost respect, it does not ! look as if we are—and if the present system is unsatisfactory, as many of your Lordships manifestly appear to think, then it must be wrong to say. "We shall do nothing because we cannot have a national disability income".
With the utmost respect, although I totally accept that I am looking at it from a lower moral plane than is my noble and learned friend, at the lower plane at which one may look at it something should be done. The other point made by my noble friend Lady Lane-Fox was that it was wrong to discuss the subject as it might put people off having vaccinations. I sought to make it clear beyond peradventure—I think it was the second point I made, but I cannot quite remember ! because my notes have gone to the transcribers—and
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to make it totally plain that it was not the intention to do any such thing, or indeed to spread alarm, but to provide fair and adequate compensation in the circumstances, for the reasons that I gave.
May I, as there is a moment left, with your Lordships' permission, explain the sort of idea I had in the back of my mind and which I did not put before your Lordships earlier because I considered that your views should certainly come first and were of far more importance. I agree unreservedly that there is no object in tinkering with this Act. It is a rotten Act; it is unacceptable, for the reasons which I sought to submit; and it was never intended to last for as long as it has. I remember my noble friend Lord Renton saying, "We should repeal it". I say with my noble friend and also with other noble Lords, "Repeal it".
What should we do? In submission, we should introduce a statute which imposes a duty upon the department to warn of the risk, to inform parents of the relevant contra-indications, and to provide that on proof of breach of duty and on proof of brain damage subsequent to vaccination, then without proof of causation in any form there shall be entitlement to compensation to be assessed by the High Court. Why the High Court?—because it is the only place where you get true, reflective and totally fair and adequate compensation, with full revisory machinery. I would also suggest that we should impose such strict liability on the department in cases where it is shown that vaccinations were given by the doctor contrary to the contra-indications—again, with damages to be assessed by the High Court. Apart from that, I would respectfully suggest leaving the law alone and considering relevant implementing machinery.
If I may take a further two minutes of your Lordships' time, I would suggest that trial by tribunal may be convenient for those who on an administrative plane have to see what type of contest goes before a court and which goes before the tribunals. But from the point of view of the subject, Order 53 the judicial review machinery, is, in submission, wholly unsatisfactory. Again, with the utmost respect, it is not going to be effective, especially where the Secretary of State maintains that he need not give reasons and need only state conclusions.
In this case the machinery is that it first goes to the Secretary of State, then to this tribunal if the Secretary of State rejects it and then, in very limited circumstances, the Secretary of State is enjoined to reconsider under Section 5 of the Act. If we do away with all that and reinstate another type of tribunal it would again be open to serious criticism because applications for discovery against the Secretary of State tend to be resisted. There are no notes of evidence and, on many occasions, no sufficiently reasoned awards. There is no means of knowing the whole of the material before the tribunal so as to enable you to attack it in the Divisional Court.
No, my Lords, let us do away with tribunals. Let us have matters decided in the courts, where there is full discovery and the possibility of a full and total revisory procedure by way of appeal, without any restriction. Those were the views which, with the utmost respect, I would have put forward earlier. I am grateful to your Lordships for having allowed me to put them before

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you now, and I beg leave to withdraw my Motion for papers.
Motion for Papers, by leave, withdrawn.

The Performing Arts: Finance
5.16 p.m.
Lord Polwarth Lord Polwarth rose to call attention to the precarious financial position of the performing arts; and to move for Papers.
The noble Lord said: My Lords, I rise to call attention to the precarious financial position of the performing arts. Their situation is serious and becoming daily more so. It has been highlighted, along with a number of other matters concerning the arts, in the recent report of the Education, Science and Arts Committee in another place, entitled Public and Private Funding of the Arts: probably the most thorough and perceptive review of this field ever made.
My reason for limiting the Motion to the performing arts is simply on account of the limited time available in a short debate. If I may declare my own interests, apart from a love of music and ballet in particular, I was for five years chairman of the Scottish National Orchestra, during which time we raised £600,000 to create the new Henry Wood concert and rehearsal hall in Glasgow. I am a member of the Ministry for the Arts' committee on business sponsorship, and gave evidence before the Commons Committee. On the other side of the fence, as a company director I have had to consider the multifarious appeals for support from artistic and other charitable bodies. If I refer for my examples to Scottish organisations, it is because that is where my experience lies and I am sure other noble Lords will redress the balance.
I am delighted to see so many names on the list even though this may involve a certain degree of self-discipline, as your Lordships can calculate yourselves. I have a number of letters from others, regretting their inability to be here to support my Motion, among them the noble Lords, Lord Gibson and Lord Goodman.
In your Lordships' House I do not think I need say much about the great importance of the performing arts and their contribution to our whole cultural heritage, in providing mental and spiritual refreshment, enriching our lives and leisure (of which there seems to be an increasing amount) and marking us as a civilised nation. Nor do I think there is any dispute on the principle of some public funding of the performing arts, any more than of education, with which indeed they overlap. The Government have had to take over very largely from the enlightened patrons of past ages, whom they have effectively taxed out of existence.
That is not all. The arts are also a sound national investment. It is estimated that in all they employ at least 200,000 people and they have a turnover of nearly £900 million. They are an immense tourist attraction, bringing large numbers of visitors and large sums of cash, not just to London but to places like Stratford, Glyndebourne and Edinburgh for its festival. On the other hand, there is no doubt that many performing arts organisations are in a precarious financial state: you have only to read the evidence
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given to the committee. After a period of growth, both in quantity and in quality, during the 1960s and early 1970s, British music, opera, ballet and drama had reached a position of high esteem in the world. Now, for the past few years, they have been inexorably squeezed between rising costs and increasingly restricted income. Companies have had to cut down on their repertoires, to eschew new ventures and to restrict their touring, and they see their reserves melting away.
To take the Scottish National Orchestra, for example, they are threatened with having to reduce their players to a number inconsistent with remaining in the first league of symphony orchestras, even though, thanks to an enlightened act of sponsorship, they have just had a highly successful American tour, including filling Carnegie Hall in New York to capacity.
Scottish Opera have severe financial problems and have had virtually to eliminate new productions. The Scottish Baroque Ensemble, which is so eminently suited to taking chamber music to smaller communities, was summoned twice by the Canada Council to tour the remoter parts of Canada, because they could take good chamber music to smaller communities, and yet they are inhibited by lack of funds from doing much of the same in their native Scotland. This kind of existence places a severe strain on performers and administrators, and the survival of a number of these companies must be in doubt.
Nor can it be said that the performing arts are, in general, extravagantly run. The administration behind them has been cut to the bone, and the performers themselves are hardly overpaid. With rank and file orchestral salaries at, in the case of Scotland, less than £6,000 a year, is it any wonder that players are drifting away to full-time teaching and other jobs in order to live? I understand that when the Scottish National Orchestra played in Chicago last month, the local symphony players had just negotiated salaries more than four times those of our own.
What are the principal sources of income for the performing arts? Broadly, first, there is the box office—that is, the sale of tickets, recordings, and other such activities. Then there is private and corporate support, whether in direct gifts or in the form of sponsorhip. Finally, there is public subsidy, both from local authorities and, most important of all, from central Government through the Arts Council.
On box office, I believe that most companies have made heroic efforts to increase their take. Ticket prices have been raised to the highest level that audiences will take. With active marketing, virtually all seats are being sold; and miscellaneous income is being found from everything from lotteries to the sale of T-shirts.
On private patronage, it is immensely encouraging to see the strides made in securing business sponsorship. A particular debt is due to the efforts of the noble Lord, Lord Goodman, and the Association for Business Sponsorship of the Arts. It is estimated that sponsorship of the arts is now running at some £6 million to £7 million a year, which is getting on for 10 per cent. of the Arts Council's whole budget. It shows a most enlightened attitude on the part of sponsors, not only British companies, but American oil and other companies, which have made a great

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contribution. But they are still too few in number. Somehow this idea must be extended down to medium-sized and smaller businesses supporting arts organisations on a regional and local basis.
This support is extremely valuable and I know it is the Government's policy to see it, and other private support, increased. But I think it would be quite wrong to see it as a substitute for longer-term regular funding from the public purse. The sources are too uncertain. Sponsoring companies can change their policies and their views and, indeed, can go through a recession themselves. As I said in my evidence to the committee, I believe that we should regard sponsorship as the icing on the cake—as something to enable performing companies to do what they would not otherwise be able to do, such as tours, new productions and the like.
Quite apart from sponsorship, I believe there is great scope for increasing individual and corporate giving to the arts, if only such gifts could be freely deductible from taxed income. The Treasury seem to have a total blockage on this, insisting on adhering to the antiquated and tortuous system of deeds of covenant. Certainly, there was some improvement with the 1981 Act, but how many people are willing to commit themselves, even for four years ahead, with all the signing of the forms and the other palaver? Indeed, how many know of the recent allowance for higher rates of tax? A straightforward allowance of, say, 10 per cent. of taxable income to an individual in gifts to charitable bodies, as happens in the United States, in Canada and in West Germany, would, I believe, result in a large increase in private support, with comparatively small loss of revenue. Surely, there cannot be any reason for continuing to resist this change, other than sheer obstinacy.
Finally, I come to public financial support and, first, that of local government. The picture here is extremely mixed. Some authorities are generous but the great majority, I regret to say, are not and the picture is getting worse. It is all too easy for a council, seeking economies, to pick on the arts as an optional extra to be sacrificed. We have seen enough of this in Scotland. Following the 1976 local government reorganisation, a number of councils, with some honourable exceptions, seized on the opportunity to ditch the performing arts. Their support, in total, for the five "national" performing companies in Scotland dropped substantially; in the case of the Scottish National Orchestra from over 30 per cent. of their income in 1975 to around 12 per cent. now. This Philistine attitude—nothing less—is deplorable and, much as I dislike bringing the law into the arts, I believe that it fully justifies one of the committee's recommendations; namely, to impose a statutory duty on local authorities to provide access to the arts to all those who show the desire or interest, with the financial implications.
It is when we come to central Government's contribution to the arts, through the Arts Council, that the committee is at its most forthright. To quote:
"the level of public funding should be substantially increased over the next five years and thereafter, in order to give arts organisations the confidence to make long-term plans, free from damaging economic constraints and in line with the artistic needs of their public";
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and they set out a framework with the financial implications.
On no account can these implications be called extravagant. At present, the performing arts receive some £108 million a year from public funds, a quarter of this from local government, three-quarters of it through the Arts Council and, in total, less than the total amount from the public funds to museums in the country as a whole.
The Arts Council have a pretty impossible task in trying to spread their meagre ration of jam so wide. Some, I know, will argue that they should be more selective in their choice and should not attempt to spread it so wide. But, be that as it may, they are doing their level best and they deserve better of the Government. Look, my Lords, at the figures for public expenditure on the arts as a whole in eight European countries, as they are set out in Table 7 to that report. At the top of the league is West Germany—always a massive public supporter of its arts—with a huge £38 a head, followed by Sweden with £25 and Norway with £20 a head; by Austria and the Netherlands, both small countries, with around £ 16 a head; by Denmark and France with around £ 12 a head and, finally, and at the bottom, by the United Kingdom with £8 a head. This is hardly something of which to be proud; in fact, I think that we should be downright ashamed.
To free our performing arts from their constant financial worries and fears of imminent closure and to give them a glimmer of hope for a brighter and more creative future would take an increase in grant which would be minimal in relation to the national budget. And yet what a vast difference it would make to the pride and morale of all those involved: performers, managements and audiences.
I am sure your Lordships will agree with the committee in their conclusion that:
"The continuing health and vitality of the arts depends upon a wider recognition by those in authority of their importance, and unless a far greater number of the British people can be persuaded that the health of the nation depends upon the flourishing of the arts we shall bequeath a poorer legacy than we inherited".
If that happens, what will our successors think of us?
There is a great deal which the Government and others can do, especially after study of this report. But one thing they have an immediate opportunity to do is to restore the patient to health before terminal illness sets in. The Arts Council grant is, I understand, due to be announced in the next few weeks. I urge the Government to make a generous upward step in their grant and so make it a happy Christmas and good New Year for the performing arts and the arts as a whole. I beg to move for Papers.
5.32 p.m.
Lord Beaumont of Whitley: My Lords, we are all extremely grateful to the noble Lord, Lord Polwarth, for having put this motion before us. We can measure the appreciation to a certain extent by the number of distinguished speakers who have put down their names to speak this evening and by the consequent rationing of the time that any single one of us has. In particular, we look forward to the maiden speech of the noble Lord, Lord Marley. We are now almost getting into the habit of debating subjects which call for the expertise of members who have sat in your

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Lordships' House for quite a time without finding an opportunity to make their maiden speech. We certainly look forward to the maiden speech of the noble Lord, Lord Marley.
There were two matters which I wanted to discuss this afternoon. Unfortunately, I shall have time now for only one of them. One was the use of the subsidies which we at present have in the arts to subsidise the arts of the mainly well-off. There is an imbalance. There is a need for us to switch resources into arts for those who are less well off. I hope that the noble Lord, Lord Jenkins of Putney, will say something about that matter a little later in our debate. In the meantime, I want to put before your Lordships one or two considerations which have been decided upon by the Liberal Party in putting forward its new and, I think rather distinctive policy for subsidising the arts.
If, as now seems likely, the grant to the Arts Council is increased by about 4 to 5 per cent. in the current financial year—we hope that it will be increased by more, but the message we seem to be getting is not very hopeful—the result will be not to sustain the arts system in its present state of impoverishment but to force the council into further severe cuts. Several major regional theatres are threatened, together with one or more of our national companies, and there would still be no money to spare to respond to new initiatives—perhaps the most valuable side of the Arts Council's work. The time has come when we must consider a more appropriate way of funding the arts.
It is not just a matter of finding more money but of considering what kind of priorities our society should have. We must start by acknowledging that the arts have suffered from a singularly confused administration in Britain. It makes no sense at all to have films under one Ministry, telecommunications under another, the live arts under a third and heritage under a fourth. All these different areas of the arts are closely, and indeed crucially, related. Many films nowadays are made for television. The whole of the telecommunications industry depends upon the flourishing of the live arts. And the record industry depends upon 2,000 years of product development.
We need one Ministry, whatever we like to call it, with a Minister of Cabinet status. Everybody calls for Cabinet status for their personal pet subject. But I believe that the need for this for the arts is becoming more clear. With the growing number of people unemployed or under-employed, the uninstructed, the unstructured time of the population is becoming greater. There is a need for a Minister of Culture, a Minister of Leisure—call him what you will. It is overdue but it is quite clear that we should have one now.
We also have various other problems which we must tackle. There is the problem of video piracy, which we have allowed to grow to a point where it threatens the survival of legitimate video dealers. But it is not just a question of the dealers. It is a question that if this piracy goes on, no producer will be able to afford to make films, either on video tape or for the cinema. Video piracy is only one aspect of the problem. There is the problem of the free domestic borrowing of music and drama through home recording—in its way a very admirable development but one which has economic effects on the producers.
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Here it is that the Liberal suggestion that there should be a low tax levied on all blank sound and video tape, to be used specifically to assist the live arts, comes into its own. It is hard to get precise figures, but a 2 per cent. tax on blank tape is likely to raise more than £50 million. If that were to be given direct to the Arts Council it would transform the council's financial situation. But perhaps that is not the best way of using it. Perhaps we do not want to continue centralisation of the patronage of the arts through the Arts Council and the Ministry of Culture. Perhaps we want to go rather more for pluralism in our culture.
It is here that we have developed a scheme of vouchers which we believe will restore power into the hands of the customer. It is a vitally important thing to do. One key factor in the decline of the theatre, for instance, has been that ticket prices have not risen to meet inflation. We believe that the new money which would be found through our proposed tax on blank tape should be devoted to the support of theatre prices in subsidised and commercial enterprises alike—and not just theatre prices but also those for concerts and other performing arts.
There are several methods by which this could be done, but we suggest a voucher system whereby consumers could buy arts vouchers which would offer them a reduction of, say, one-third on the price of theatre and concert hall tickets. This keeps ticket prices low for the consumer, but allows managements to receive a proper reward from their box office sales and does not distort the pattern of patronage which is then enforced by the purchaser and by the consumer. Such a measure would have the effect of relieving the Arts Council of some of its financial burden. Money which now many subsidised companies use to keep their ticket prices low could go into other areas—priming grants to get new companies going, bridging loans for new companies.
The tax on blank tape and the voucher scheme, and possibly an increased subsidy to the Arts Council, are all measures which are urgently needed, but they will not themselves cure the crisis of the arts. We also need to encourage the local authorities. It is a combination of local authorities, the Arts Council and regional arts associations whom we need to put to work on these particular tasks.
That can happen only if we adopt a different attitude to the arts in this country—not regarding the arts as the deserving poor always in need of charitable handouts, but recognising their contribution to the country's economy and acknowledging the special needs of creative and interpretive artistes. Overall, the arts are not a drain on the country's resources. They are a major draw to tourists. One survey has revealed that for the £ 1 million invested as subsidy in the Edinburgh Festival, the city received £16 million in return. In themselves our organisations may be poor but they contribute to the general wealth of society. We would all suffer in plain financial terms if the arts were to decline in this country; the West End is a vital part of the economy of central London.
That is not the only reason why we should support the arts. As I have suggested, there is the prospect of increased leisure in our society even when we move, possibly, out of the depths of this particular recession. The age of the silicone chip and microprocessor

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is here. That will mean, I believe, a continuing shortening of the working week, a lowering of retirement ages, and a reduction of hours worked during the day. This prospect is in some ways frightening, but the answer does not lie in increased consumerism, as some suggest; it lies in doing what we can to improve the quality of our lives in this country. This requires, among other things, the skill and aesthetic appreciation which our artistes can provide—and our artistes are now recognised as being among the leading artistes in the world.
If we lose the battle to ensure the survival of the arts system now, we shall not win the war against commercial and state interventionism in the future. The Liberal Party has produced an arts policy that is both practical and distinctively liberal in its traditions. We hope to implement it in the not too distant future but in the meantime we are not dogs in the manger. It is up for grabs, and we invite this Government to help themselves.
5.42 p.m.
Lord Rhodes: My Lords, I congratulate the noble Lord, Polwarth, on introducing this debate today, knowing as I do what he has done for the arts in his native Scotland. I note that one or two of the recommendations which he made in evidence have got through to become recommendations for attention by the Government.
I have been associated with the funding of the arts for a long time. In fact, I sent a letter to Andrew Carnegie when I was seven years old, in 1902, asking him if he would buy me a cornet. A cornet was something in those days—I believe it cost £5. Today it is a different proposition, but those were the days when my aunts and uncles used to go to the local vocal society. My aunt used to appear at our house with her skirt tied at the waist with a tape, so that her skirt would not drag in the mud as she was walking two miles to rehearsals, and performances.
I sometimes believe that we ought to consider what progress we have made, and a little historical sentiment will not do any harm whatsoever. I did not get a cornet from Andrew Carnegie. In fact, I did not even get an answer to my letter, but I was sent to get a cornet from the local band. I took this battered instrument back home and my mother boiled it, because it was full of tobacco quids. Eventually, I became very proud of this instrument, which I became able to play as time went on.
When I came home after the First World War, instead of my hobby being running, it was music. As a boy I had to stand at the elbow of my grandfather, who used to transcribe as fast as an ordinary individual could write orchestral parts condensed for the brass band stand. That was where I learnt what it was all about.
In the 1920s, I played my part in organising choirs. In fact, I was for years the only person who was instrumental in getting grand opera into the barren wastes of culture in Oldham. Those were the days when it was degrading, the way in which music makers were treated. Time and time again I was organising concerts in the parish church for the cornet men of the Hallé Orchestra, who were delighted to come to
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Saddleworth for the collection. The record collection was £17 10s. Od. for people of the calibre of Alfred Barker, Denis Mathews and Stewart Knussen—and I could name many more.
What we did was to establish something of which we are very proud. We have that involvement in our district of 22,000 souls of a nature that I do not believe is matched in many places in this country. We have eight full brass bands. We have three school bands. We have several drama companies. We have a theatre of our own. When our heritage treasures looked as though they were going to be disposed because of a shortage of museum space and the local authority could not accommodate the treasures we had, we built a museum. Out of a total of £200,000 we owed, we have wiped off that debt until it is no more than £6,000 today. It is providing work for out of work librarians and statisticians, and it is kept going by voluntary means.
When funding for the arts is talked about, most people think in terms of grand opera. There is a lot more to it than that, because if one is to make a success of making art more available one has to enlist the enthusiasm of the people who live in one's area.
I am the president of the North West Arts Association and have been for the past 10 years. I am also president of many other associations which have to do with the development of the arts and the funding of them. It is no use haranguing local authorities from London. It has to be done by influential people who know what they are talking about in the region. This is why this magnificent report. one of the best I have ever seen on the arts, emphasises this in about 10 recommendations which have to do with the grass roots and the money to be distributed by the regional associations.
I am impressed by the heavy emphasis placed on the future role of the regional arts associations, and it is pleasing to note the confidence the committee had in the regional associations being able to carry more responsibility. The local government reorganisation of 1974 was a very heady time for newly appointed officials and representatives, who thought they were better able to distribute money for the arts than any regional arts council. But that is a long time ago, and I am glad to say that the relationships that we have with the local authorities have never been more stable or closer than they are now; we are now making progress, but it is very slow. We should remember that any major change in the attitude of people in any country or any community in the world is a very slow job; it takes a minimum of 40 years before a good idea really gets going in the community.
We are not complacent in the North-West. There is room for closer contacts still. There is too wide a gap between one local authority and another in the provision that they make for the arts. It is education and patience and constant working for it that will do the job. What we have got to do is to keep a watchful eye on our arts administrators, too, who try to keep the politicians at arm's length. Despite the great differences in what local authorities provide for the arts there is much room for closer contact still. It is very interesting to see the gradual change of attitude on the part of local authority members who were suspicious of the arts, changing their opinions when

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they have the experience of sitting on one of our numerous panels.
Over the 10 years during which I have been associated with the North-West arts I think the most outstanding development has occurred in what is known as community participation. Here the report stresses precisely what we have been trying to do on making the arts more available. We are happy when we see local authorities increasing their involvement and we do all in our power to encourage them to run their own show. A bigger income is not our first priority regarding the local authorities, but more interest and action by the local authorities in doing things for themselves. That is one of the first priorities.
I was interested to see in the report recommendations 48 and 49 which drew attention to the way in which the Scottish Arts Council has been funding amateurs. But this is a short debate and I will not keep the House any longer. What I do, however, say is this. It is a job which needs patience, which needs education, which needs persistence, which needs leadership with vision. I hope that it is possible for the Government to be able to keep pace and, if possible, improve on the way they have been funding the arts. I sincerely hope that we can make more progress with the local authorities than we have done before. Some of us are doing our best to do so, and it is a very good thing to raise this subject in this House today.
5.55 p.m.
Lord Marley: My Lords, I am very grateful to my noble friend Lord Polwarth for introducing this debate today. It is a vital subject and he has presented the details very clearly indeed. Also, speaking personally, it at last gives me an opportunity of speaking to your Lordships for the first time. In my very brief remarks I am simply going to concentrate on what some of the performing arts, in groups or individuals, can do for themselves within their own perimeter. The first obvious objective is to gather an audience. An audience pay, or if they do not pay at least they spread the interest in the subject which they have watched. In this context I might possibly be allowed to suggest to Her Majesty's Government that VAT might be withdrawn from theatre tickets.
I am simply going to give your Lordships a few examples of the individual enterprise and achievement that can happen, has happened in the past, and is happening at present, and I hope will continue to happen in the future. The first two examples are concerned with my own career in the film production business. Some 35 years ago I was involved in a film which necessitated the shooting of a scene in your Lordships' House, in the Royal Gallery, depicting a trial by Peers. Obviously at that time, 35 years ago, one could not construct the whole Royal Gallery in the studio. So we developed an earlier experiment, building half of it and completing the roof by making a small model and placing this in front of the camera. This added value to the film and also halved the cost of the set; and we were particularly gratified at the end that critics quoted the scene as being an impressive one.
The second example I am going to offer your Lordships is that of when I was working some years later with a smaller company. We had the idea of
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adding realism to a film production. This case involved the use of real actual houses, natural settings, instead of building sets in film studios. This was an interesting experiment because we had a group of very young actors at that time, and we found that it added immensely to their comfort if they were in a room instead of sitting on a bleak studio set. This led to a series of financially pretty successful films, including, if I may quote, Tom Jones, for which no shot was filmed in a studio at all. Indeed, at that time it was a fairly revolutionary approach.
For my last two examples, I am turning to youth. The European Community Youth Orchestra is a remarkable achievement. This was started, as many of your Lordships will presumably know, in 1975, when my noble friend Lady Elles put if forward to the European Parliament, and it was carried on by the noble Baroness, Lady Fisher of Rednal. It has now developed into an international and very important orchestra. Indeed, this year it extended its tour outside Europe to Mexico. It is conducted by such distinguished artists as von Karajan, at Salzburg in 1980. Sir Georg Solti and, particularly, by Claudio Abbado, who is its musical director and trains the orchestra himself. The result is that about 150 players from this orchestra have since joined leading international orchestras such as the London Symphony Orchestra, the Concetgebouw, and La Scala, Milan. I hope this will continue to gather momentum in the musical world.
My last example refers to a festival on the South Bank involving, schools. This is an event which takes place annually, early in July, and was started three years ago by John Dodge, who is now the Director of Information for ILEA. He had the idea because as a young journalist he covered the Festival of Britain and thought that the South Bank should be more used. I briefly quote from their leaflet, Schools on the South Bank '82;
"These displays and performances illustrate the quality and variety of creative activities within London's schools . . . provide pupils with the opportunity to display their talents not only to the general public but also to each other, and to do it in an exciting venue in the centre of their own city."
The standard is remarkably high. Acting, singing, dancing and costume design are infinitely worth seeing, and I recommend that your Lordships cross Westminster Bridge next July to do that. They are, of course, helped by the delightful, exasperated and laughing teachers who are a great inspiration to the whole festival. This costs ILEA only £2,000 to £3,000 a year. Next September they will present the cream of their talent to the Barbican Centre.
Here I relate just one tiny little incident that does not concern this debate but which happened at the festival. Two small boys were sitting on the grass. One, white, painted his face black to represent a jazz musician. The other, black, was busily painting his face white. "What are you doing that for?" said the jazz man. The answer came, with the supreme logic of the very young, "In school they teachin' us to be equal, so I'm equallin' you." So it goes on with each group, individual and idea filling one of the squares of this vast patchwork quilt of performing arts. After all, they have been with us for upwards of 6,000 years and I hope will continue for another 6,000. All these activities help to improve the precarious financial state

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of the performing arts at the moment. All deserve the maximum encouragement from not only the Government, the organisers and the sponsors, but the whole nation.
6.8 p.m.
Lord McGregor of Durris: My Lords, it gives me singular pleasure that I am the first of your Lordships to congratulate the noble Lord, Lord Marley, on his maiden speech. It was vigorous, crisp, practical and elegant, and it has sharpened our disappointment that the noble Lord has denied the House the benefit of his contributions for so long. We are pleased that his silence has finally been broken.
I shall describe in brief detail the circumstances of one orchestra, the Forest Philharmonic—as its chairman, I declare an interest—in order to provide evidence in support of one suggestion that I wish to make to the noble Earl who is to reply. What I have to say illustrates in miniature many of the major themes of the compelling speech of the noble Lord, Lord Polwarth. The Forest Philharmonic was established nearly 20 years ago in what is now the London Borough of Walthamstow. It was then under a young and highly gifted conductor, Frank Shipway, who has since achieved international renown as guest conductor of, among others, the Cleveland Orchestra, the Royal Philharmonic and the Danish and Italian Radio Orchestras. Nevertheless, he still trains and conducts the orchestra in Walthamstow.
Like similar orchestras in other parts of the country, the majority of players are amateurs with a stiffening of professionals. In this case there are 15 professionals among the 80 regular players. The Forest Philharmonic gives five concerts a year in the Walthamstow Assembly Hall, which is acoustically superb. It is always filled, averaging throughout the season an audience of 900 which is drawn from the locality and. I can assure the noble Lord, Lord Beaumont of Whitley, is fully representative of its social structure. The programmes include as many as possible of the works of such contemporary composers as Panufnik, Malcolm Williamson and Nicholas Maw—perhaps rather more than the audience would have chosen for themselves on a free vote.
Because this orchestra is an amateur body, it does not receive a grant from the Arts Council. Some two-thirds of its annual expenditure of some £20,000 is self-generated from the sale of tickets and programmes, subscriptions, donations and the like, together with the usual run of fund-raising activities. Although there is very little industry in Walthamstow, the orchestra is very fortunate to have three generous sponsors—the John Shand Group of Companies, Bush Boake and Allen and the Midland Bank. The rest of its expenditure is covered by public funds. The local borough, the London Borough of Waltham Forest, has given many varieties of support, including a substantial grant that has remained unaffected by political change. Further income is received from the National Federation of Music Societies and the Greater London Arts Association.
The objectives of the orchestra are not restricted or even primarily directed to mounting concerts. Great importance is attached to education and training and
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a full programme is maintained. All amateur members of the orchestra pay an evening class fee of £50 a year and those who cannot afford the full amount are subsidised. Weekly tuition is provided in collaboration with Waltham Forest College. Not only is this orchestra a musical focus for its local community, but it also trains students and exponents at different levels of skill and experience. The instrumentalist straight from school rubs shoulders with the graduate from the major colleges of music. Other institutions within and without London do this too, but few, I think, achieve the scale, range and quality of this orchestra which has often been praised in glowing terms by the country's leading music critics.
The orchestra is able to attract soloists like Pierre Fourniér, Tortelier. Christian Ferras, Shura Cherkassky, John Lill and many others of like quality. I am sure that no voluntary body could be more fully self-helpful in recruiting money than is the Forest Philharmonic Society. But it is now coming to the end of its days. Next season, when current debts are paid, we estimate a loss of around £400 per concert, and the decision has to be taken soon whether it can continue at all. The orchestra has exhausted all its sources of funds. If its members give more time to raising funds they will have no time left at all for music. For the reasons given by the noble Lord, Lord Polwarth, it is becoming impossible to seek support by extending sponsorship.
Therefore, here is an orchestra that fulfils essential musical functions: it give concerts; it enables graduates from the main professional colleges to obtain experience in an orchestra before they find their places and their life's work in the professional orchestras; and it enables amateur instrumentalists to pursue their art and their hobby.
Within the school system we invest heavily in musical training. Some 6 to 7 per cent. of all school-children receive instrumental instruction. If orchestras like the Forest Philharmonic collapse, where are those who wish to continue their interest and extend their skills to go? Will such investment yield anything like its full benefits?
Many think—and many noble Lords have already said this in the debate—that we are on the eve of a great increase in leisure deriving from a combination of technological development and general unemployment which it seems reasonable to assume is likely to become a permanent condition of advanced industrial societies. Surely facilities for training and music-making are a national requirement which will become increasingly important to cultural vitality and social stability?
For the purposes of this debate and of immediate action we must, of course, accept the premises and framework of Government policy in respect of public expenditure. But I do not doubt that the policies of the noble Earl's right honourable friend the Minister for the Arts and Culture, are compatible with discrimination in favour of such cases as I have outlined. Indeed, if discrimination is not possible in this area, then policy ceases to be policy and becomes a mere blunderbuss. Would the noble Earl be willing to ask his right honourable friend if it will be possible to consider the establishment of a small emergency fund or some other means which would enable organi-

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sations in extremis, like the Forest Philharmonic, to make a reasoned case for their survival? I ask the noble Earl this question in despair, because irretrievable cultural damage would be prevented by such a very small step.
6.15 p.m.
Lord Stodart of Leaston: My Lords, I have known my noble friend Lord Polwarth as a near neighbour for a very long time, from about the period in which I suppose I had my first taste for the arts when I made a considerable hit at school by playing the Queen of the Fairies in Iolanthe—the dear, dim days beyond recall. I am, of course, as every noble Lord has already said, grateful to my noble friend for raising this subject. I should also like to voice my congratulations to my noble friend Lord Marley for his very interesting and illuminating contribution.
I shall limit my remarks to the performing arts in Scotland for reasons which will become obvious. One of my regrets is the difficulty I see in making really constructive suggestions for solving what I consider to be an immensely difficult problem. It was some 17 years ago, in 1965, when there was a debate in another place in which I took part, that precisely the same concern was expressed about financing the arts. Those were the days when the standard price of a seat in the grand tier at Covent Garden was £2. The Arts Council received £3.9 million from the Government and passed on £258,000 to the Scottish Arts Council. The local authorities in Scotland—and this is an interesting point—contributed £400,000 in that year to Scottish arts, equivalent to the rate of one old penny all round. Admittedly it was far below what was then their statutory allowance—and I do not know which civil servant dreamed up this figure—of four and four-fifths of a penny which they were allowed to contribute; and of course many local authorities contributed nothing at all. But the point of great interest is that £400,000 then was far more than the Scottish Arts Council's £258,000.
This year the Arts Council has received just over £80 million from central Government. The Scottish Arts Council has received £9.3 million out of that, and local authorities in Scotland a year ago contributed about £1¾ million to arts organisations which are also supported by the Scottish Arts Council. But, of course, there has been inflation since. The equivalent purchasing power of the 1965 pound sterling as of October this year was £5.55.
So in the last 17 years the Government's grant to the Arts Council has gone up by between five and six times in real terms and what the Arts Council passes on to the Scottish Arts Council has kept pace almost exactly with that. But to match the £400,000 that they gave in 1965 local authorities would have to be contributing £2¼ million today; they are, in fact, contributing about £250,000 less than that.
I come now to the box office. In 1965, and in evidence given before the recent Select Committee, the same claim was made that the point of no return has been reached and if prices are pushed up, audiences will fall. I am not competent to judge this. I suspect that my noble friend Lord Polwarth is right. But the £2 seats at Covent Garden in 1965 in real terms today should be about £11. In fact, the price is £19. So the box office would seem to be playing its part.
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In the last three years sponsorship, which was not mentioned in 1965, probably because it had not been thought of, has more than doubled in Scotland, from £299,000 to £658,000. I am advised that it could be better still if sponsorship by a company could be regarded as straightforward advertising and allowed as a business expense. I am assured that this is not allowed, by the then managing director of a company which has been very prominent in this field, and who, in fact, assured me that it would make a world of difference. That is one of the constructive proposals that I would make to assist in what I have already said is a difficult situation.
Quite frankly, I cannot upbraid the Government in the light of the economic situation over many years. I cannot possibly upbraid the Arts Council, because I think that it has been scrupulously fair in maintaining the share which the Scottish Arts Council receives. It is true that it is well short of something about which we used to talk a great deal in those days, the Goschen formula, which I think was eleven-eightieths of the total. The Goschen formula is not heard of so much today, and if I were to go into it I think that it would open up too wide a field for this debate. But that the local authorities have fallen short I think is undeniable. However, everyone must admit that their difficulties are great and a squeeze is on them. Mr. Mackie, who I think was the chairman of the Arts Committee in the Tayside Region, in his evidence to the Select Committee said:
"The arts are well down in the list of priorities";
and went on to say that there just are not any votes in them, even though Tayside has, in fact, given more than the recommendation made to local authorities by the Convention of Scottish Local Authorities.
The mandatory rating for the arts has been suggested, and I think it is even recommended, by the Select Committee. I noticed that some councillors who gave evidence were not averse to this, I am bound to say that I would regard it with extreme misgiving. I think that it would set a bad precedent of central Government ordering what local government should spend and I believe that it would be immensely difficult when it came down to defining what precisely the arts were.
Finally, very strong feelings were expressed by local authority representatives on the committee, of which I was the chairman, into the functions of local authorities in Scotland, where there are two tiers. To paraphrase what they said, it was: "Why should local government support bodies which never perform in their area—which cannot, anyway, because there is no suitable hall for them to perform in? Let central Government fund the national companies, with the local authorities who are lucky enough to be visited by them contributing if they want to. Leave us, the less fortunate local authorities, to support local artistic efforts".
The evidence by the Convention of Scottish Local Authorities to the Select Committee is interesting, representing, as it tries hard to do, both tiers of local government with their hithero competing functions. It says that the Scottish Arts Council might fund the national companies, provided that the local authorities agreed to be more responsible for revenue-funding theatres, et cetera, in their own areas. My

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committee was not given the benefit of receiving evidence from the convention, but it is interesting to note that in this particular matter our views do not seem all that far apart.
I would merely make one final point. I believe that my right honourable friend the Secretary of State must treat as a matter of very great urgency, now that the functions are being redistributed, the needs of the districts to know how the rate support grant is to be reallocated in order that they may take on the new functions which are placed upon them; and one of those is responsibility for recreation, leisure and the arts. I believe that a crisis for the performing arts does exist.
6.28 p.m.
Lord Somers: My Lords, the noble Lord, Lord Polwarth, has done a tremendous service to the arts by introducing this debate today. This subject is not one which is usually given a great deal of time in your Lordships' House, but to those of us who are connected with the arts it is a tremendously important one. I should also like to join other noble Lords in congratulating the noble Lord, Lord Marley, on his maiden speech. I can remember that when I made mine, a good many years ago, I, too, had waited for several years before doing so. The only difference is that I think his has been much better.
This debate presumably includes all the performing arts, but I shall confine myself to music as that is the only one of which I have any personal experience. Music is not a profit-making profession. I do not think it is generally realised that an orchestra cannot give a concert without making a financial loss; it is practically impossible. They cannot recoup their costs from the sale of tickets only. Therefore, the only hope is support by the Government or subsidisation by commercial firms. I might say that the later source has been extremely generous, and these firms have done very well indeed in their support of such concerts.
I well remember the 1960s, when the Royal Philharmonic Orchestra was having a very bad time financially and very wisely formed a council to deal purely with the matter of raising money. That council comprised various members from the commercial world, and others, and for a time I was its chairman. I must say that, thanks to the co-operation of the commercial firms that we contacted, we managed to get the money we wanted; and the Royal Philharmonic is now on a very sound footing. Of course, the money that is given by the Government is given to the Arts Council. There have been some critical remarks made tonight about the Arts Council, but on the whole they have done very well. Naturally, they have done some things which one might question, but in a sphere such as music one can hardly do anything which is not questioned by somebody.
Government support, too, has been criticised for being smaller than in other countries. Of course, the figures which have been quoted are true, but any cake must be of a limited size and the more people there are who want a slice of it the smaller the slices are likely to be. I do not think that any of the countries which give larger support to their music than we do has anything like the overseas commitments (or the inland commit-ments,
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for that matter) that our own Government have. Therefore, I think it is not very likely that we shall see a great increase in Government support.
That being the case, I wonder whether there is not some other way in which we could circumnavigate this difficulty. Would it be possible, for instance, to form a committee which could circularise large firms with the events of the coming season and accept their subscriptions towards them, and who could then, with the advice of the Arts Council, distribute the money among the appropriate activities? It might be possible, though I do not quite know how. I have not worked out all the technical difficulties that might arise.
In the discussion on a Question asked during the last Session by the noble Lord, Lord Strabolgi, on the future of the orchestras, the subject of the content of orchestral programmes arose. They tend at the moment to be rather conventional, purely for the reason that orchestras realise that if they introduce anything unfamiliar they will at once empty a quarter of their hall. Our nation is a peculiar one from that point of view. Nobody appears to want to hear anything that they have not heard already several times. The result is that the young and unknown composer does not get a look in anywhere.
It is only right that the unknown composer should have a chance. Therefore, I wonder whether it would be possible for programmes which contain unknown works to be subsidised more heavily than those which do not. A great deal of modern music is absolute nonsense, but, on the other hand, a great deal of it is of great value. You-cannot just say that because the music is modern it is meaningless. There is a great deal of excellent music being written today. That which is nonsense, or rubbish, will die a natural death at its first performance. Nobody will want to hear it again, and nobody will want to play it again. Therefore, no harm will have been done. But the good music will survive. I think that is only just, and that orchestras should be supported in this way.
Then there is the question of education, which was raised particularly by the noble Lord, Lord Rhodes. Nobody can become a performing musician without having first learned his instrument. That is fairly obvious, and I do not think anybody could question it. I was very disturbed indeed to see that the Surrey County Council had issued an edict—I do not know whether it did it on its own initiative or whether it was told to do so by the Department of Education; that I intend to find out, so let it be in the air at the moment—saying that schools shall cease all music teaching outside school hours. Of course, most of it has to be outside school hours; and that will mean that practically all part-time instrumental teaching will cease in Government schools. That is going to be a tremendous blow to music. One particular school in Epsom that I have been in touch with has a wonderful record, and it has an enormous number of pupils learning instruments out of school hours.
All that will disappear simply because, apparently, that was laid down in the 1944 Act, if you can believe it—the 1944 Act, when we were still at war and conditions were entirely different! Something should be done to put that straight. I cannot believe that anything of that kind should be allowed to go on. I sincerely hope that when I go to see the Department of

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Education they will be able to tell me the true situation. My Lords, I have exceeded my time, so I shall sit down.
6.34 p.m.
The Earl of Drogheda: My Lords, I am sure we are all grateful to the noble Lord, Lord Polwarth, for having put down his Motion. I hope that this short debate will be followed by a longer debate when the Select Committee's report from another place can be thoroughly discussed, because it contains many important recommendations. It is a remarkable document. I should also like to congratulate the noble Lord, Lord Marley, who must be blushing up to the top of his cheeks from all the praise he is getting for his stimulating maiden speech. Now that he has broken the ice, I am sure he will come here again. I never come, but I felt today that I ought to because for 16 years, from 1958 until 1974, I was chairman of the Royal Opera House. I am still closely identified with it because I am joint chairman of the Development Appeal Committee which exists to raise money for improvement to the dreadful facilities of the building. The first phase of the work was completed a few months ago.
Covent Garden is the largest single recipient of money from the Arts Council. At the present time it receives between £9 million and £10 million a year. Together with the English National Opera Company at the Coliseum, London's two opera houses absorb about 17 per cent. of the Arts Council's total budget. If one adds in the two great repertory companies, the National Theatre and the Royal Shakespeare Company, the percentage of the Arts Council grant going to these four enterprises—the big four, so-called—comes to about 30 per cent.
There are people who hold quite strongly that these four enterprises should not be subsidised through the Arts Council at all; that they should be handled separately through the Arts Minister. There is a strong case for making some change in the present situation because there is always a good deal of criticism and complaint that so much money is going to these threatres, and, of course, Covent Garden in particular, which is the sort of epitome of élitism in the eyes of many people—which is nonsense. The Select Committee recommend that there should be a separate special grant which would be administered by the Arts Council, but would be given to the Arts Council from the Minister for the Arts, who by then, it is suggested, should have Cabinet rank, and then the argument would take on quite a different colour, or so I hope, anyway.
Obviously, no decision is likely to be made in time to help the present predicament, which, ironically enough, comes when Covent Garden is celebrating its 250th anniversary. The predicament, quite simply, is that too little money is being made available to the Arts Council. The needs of the Big Four are growing at a rate well in excess of the funds provided for the arts by the Government. Your Lordships should bear in mind that from a total national budget of well over £100 billion, the Arts Council receives a mere £80 or £85 million to support the arts throughout the country. Even if one adds in the cost of the museums and galleries, which are not handled through the Arts Council, the total cost to the Exchequer represents, I
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reckon, about one-third of 1 per cent. of national expenditure. The noble Lord, Lord Polwarth, quoted figures relating to other countries; I am afraid it is sadly true that we show up very badly.
At the same time, there is no doubt that the flourishing of the arts which has taken place in this country since the war has largely been thanks to the setting up of the Arts Council and the change in attitudes which has thereby been brought about. We know that in many fields the position of this country relative to others has declined, but in the arts it is widely recognised that we hold a pre-eminent position, both for the quality of creative work and for the quality of performance; and one can justly say that, taking one night with another, Covent Garden really is one of the centres of excellence, standing high in the international league, to which I know that the Prime Minister herself attaches importance. To jeopardise what has been achieved by a niggardly attitude on the part of the Government—to try to force every form of expenditure into a sort of common straitjacket—would be shortsighted and extremely unimaginative.
I am afraid that the idea of the noble Lord, Lord Somers, that one can somehow bridge the gap by help from the private sector, is sadly unrealistic; some money is gradually forthcoming all the time, but it is still far away from what is required. The first thing must be a major change in the tax laws. In the case of Covent Garden—and elsewhere, I think—the level of seat prices has been forced up to a point at which it is becoming counter-productive. As my noble friend Lord Stodart said, the box office has, therefore, been playing its part, but attendances are showing a tendency to fall, not because of performance standards but because people cannot afford to pay, with the stalls going up to £20, £25 and £30 each. Covent Garden's annual expenditure is now approaching £20 million. People may say, "Surely, from a total like that, you can squeeze out 5 or 7½ per cent?" But three-quarters of the figures represents wages, salaries and artistes fees, and the artistes fees are determined by the international market, which is not helped by a falling pound. Every year, when the figures are presented to the Arts Council, they go through them with a fine comb, so I do not think there is much fat there.
I hope the Minister will be able to say that he and his colleagues recognise the importance of the arts and appreciate that what is, relatively speaking, a very young growth should not be checked as it develops. This means that more money than has been promised to the Arts Council for the coming year must urgently be made available, for I assure your Lordships that the position is seriously critical. For the longer term, I seriously hope that action will be taken to implement the carefully-considered recommendations of the Select Committee's Report, for it is a very important document which must not be pigeon-holed.
I regret that I must apologise, in that I do not think I shall be able to remain until the end of the debate. I have not exceeded my time, but I have a long-standing prior engagement and may therefore have to read Hansard to see what the Minister had to say in reply.
6.46 p.m.
Lord Annan: My Lords, I hope the noble Earl, Lord Avon, will accept my excuse when I say that I do not

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know what the punishment is for impersonating another noble Lord. I expect it is decapitation on Tower Hill at the very least. I telephoned to say that I wanted to take part in this debate but I suspect that, as the noble Lord, Lord Polwarth, will recognise, an English ear does not always hear accurately a Scottish name. I am glad that my old friend Lord Polwarth initiated this debate because it emphasises how important the arts are in Scotland, Wales and in the regions. We tend so often, I feel—those of us who live in London—to think it is only the great companies in London which matter.
I wish to comment on rationalisation. During the 'sixties the universities and polytechnics were continually being urged by the Government to rationalise. They did nothing about it; perhaps it was impossible for them to do anything about it. Equally the University Grants Committee refused to do j anything about rationalisation. They simply said, "Each university has a base line. We honour that base line. Of course, some are better off than others, and we will make minor adjustments"—upwards, of course—for those which show special initiatives". In the end they had to rationalise. They did rationalise in the 'eighties and it was a very painful process.
I wonder whether the same thing should not happen with the great companies in London. In the 'sixties, there was no national theatre at the beginning of the decade. There was the Old Vic, which had the status of a national theatre, and there was Sadler's Wells as the second opera house. Then, in the 'seventies we had the ENO at the Coliseum and the National Theatre in all its glory. But still attempts were made to keep the Old Vic and Sadler's Wells going, and the contraction which should have taken place at that time did not occur.
I remember some years ago, when I was a director of Covent Garden, being part of a delegation to the Arts Council. It was the usual kind of delegation, saying, "We are in a desperate state of crisis. Please may we have more funds?" I said to the chairman of the council, "Is it not possible for you to think of some rationalisation? Do we really need so many ballet and opera companies? Is it not possible for some amalgamations to take place which would still give touring companies to the public and would still keep the Coliseum and Covent Garden going? But there could be some economies". He replied, "Not at all. That is not the Arts Council's business. Our business is to put pennies into begging bowls. We do not go in for this business of rationalisation. That is up to the companies themselves". Believe me, my Lords, it really is impossible for individual companies to rationalise in this way. Therefore I ask myself whether some rationalisation of these great companies is not possible. As speeches must be short, I shall not this evening put forward my own plan for this; it would be a great impertinence if I did so. But I think that there are possibilities that are well known, if I may say so, to those who are the directors or trustees of these great organisations.
I wish to conclude by saying one other thing. I know that this is a debate about the performing arts, and of course the performing arts are dear to all our hearts. They give pleasure to hundreds of thousands of
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people. But what I fear the Government might be tempted to do would be to take money from the non-performing arts and give it to the performing companies. The British Museum has 3 million visitors a year, the Science Museum has 3 million, and the National Gallery has 2½ million. Those are institutions which lost out in the great bonanza of the 1960s when everybody's base line was raised. The museums and the galleries remained rather as ugly sisters until the noble Viscount, Lord Eccles, came along dressed as the Fairy Godmother and waved his wand. He improved their situation, but it was not all that much improved.
I want to sound a word of warning here. It would be false economy to say: "We could cut the purchase grants, we could reduce the amount that we give to the museums and galleries in order to save the performing arts, particularly the big companies in London". Indeed those companies need greater sustenance. They need sustenance if they are to maintain their standards. They will not maintain their standards if there are so many bits and pieces attached to those companies and if no rationalisation takes place. I know that the noble Earl who is to reply would not for one moment want the Government, nor the department, to get involved in any rationalisation of this kind. But I urge him to draw this point to the attention of the Arts Council and to say: "Dislike it as you may, you may have to follow the policy which the University Grants Committee has been forced to follow in recent years".
6.52 p.m.
Lord Mancroft: My Lords, you may have noticed in the newspapers this morning a report of an interesting event. It occurred last night in the great city of Bath, and it was the re-opening of the restored Theatre Royal. I at once declare an interest because like many people who lived around that area, I was persuaded to take part in a little fund-raising, and the result was extremely encouraging The money came in—I must remind your Lordships that there is still a little more to come, please—from the widow's mite of the old-age pensioner, right up to extremely generous gifts from the English Tourist Board. I mention that organisation in particular having myself for a long time been engaged in the tourist industry, and I say it for the benefit of those who mock tourism, who jeer at tourists, and who forget the contribution that tourism and the theatre make to our economy.
We learnt some interesting lessons, one of which was I think mentioned by the noble Lord, Lord Marley, in an interesting maiden speech. No matter how much money is made available, it is no good if one does not have an audience. The Theatre Royal in Bath will succeed because Bath has a need for a theatre. But go down to the seasides, look at all the piers, at the end of which are derelict theatres, which in the old days used to be full, and which gave birth to many new and rising stars. The supply and demand has got out of kilter; it is out of balance. The demand has gone off, and has switched to holidays in the Costa Brava. That is the trouble there.
Look at London, my Lords, where we have more than six theatres standing empty, or up for sale. Of course, the difficulty is not only in Bath, and the

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reasons are familiar to everybody—traffic problems, parking problems, poor restaurant and bar facilities. But the one that was mentioned most of all to my friends and myself when we were going around looking for money was the dearth of good new plays; and that is where the audience will go, to look at good new plays. But there are none. So they stay at home. They stay at home in front of the television, watching the "Barchester Chronicles" and "Yes, Minister". Therefore, I am not surprised to read that when the average man reaches the age of 68 (my age) he will have spent nine and a half years before the television set.
What therefore is Bath's answer, and what has Bath to contribute to the problem? The first is good parking, and there is also good catering, as well as facilities for the deaf and the disabled. But most of all the theatre in Bath is a triple purpose theatre. Far too many theatres around the country have gone broke because they are eating up rent, rates, and insurance while standing empty for most of the day. Not so Bath, where the theatre is triple purpose, able to take conferences, and able also to put on concerts. Of course, one cannot guarantee good plays; nor can the Government.
Out of interest I turned up the copy of The Times for 1st December exactly 50 years ago, and your Lordships might like to know the names of the authors who then had plays on the stage in London: Bernard Shaw, Somerset Maugham, James Bridie, Noël Coward, Frederick Lonsdale, Ben Travers, Hugh Walpole, Ian Hay, and Dodie Smith. Are your Lordships surprised that some theatres are empty nowadays? By the way, there was also a revival of "Macbeth", but I do not think that it was quite the fiasco d'estime as was the last revival that occurred in London.
There is the same kind of trouble with music; I was glad to hear the noble Lord, Lord Somers, mention this. The RPO has been complaining that only £3,000 has been allotted for contemporary music. Again, I turn to The Times, and I find that during the week in which the noble Lord, Lord Polwarth—whose excellent speech I so much admired—put his Motion on the Order Paper, there were four performances of Beethoven's seventh symphony. I bow to no one in my admiration of Beethoven's seventh symphony. Indeed, I think that I am one of the few Members of your Lordships' House who has actually played in a performance of it. But too much programme music was what the noble Lord, Lord Somers, was complaining about; and it is bound to happen. Again, it is the question of supply and demand being out of proportion. There are far too few good composers, as there are far too few good playwrights, and people just will not go and listen a second time to a piece that has bored the daylights out of them the first time.
The other day when the death occurred of Percy Grainger—whom, your Lordships may recall, wrote Country Gardens and Handel in the Strand—one of the obituary notices criticised him for being not really a composer, but only a tunesmith. May I remind the author of that obituary notice that Beethoven, Mozart, and Schubert all wrote a large number of thundering good tunes!
I am slightly to blame myself. I know about this,
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because on one occasion while I was studying music at Bonn University we all had to submit a composition of our own. I composed a sonata for unaccompanied 'cello—which is a rash thing to do at the best of times. But my instructor was a kind man. He looked at it, and he said, "Mancroft, your work will be acknowledged long after Beethoven's is forgotten—but not before!"
Time is running out, and I must conclude. I agree wholeheartedly with the noble Lord, Lord Polwarth, that we need more money. I shall not repeat all his excellent arguments. But, as I say, I think that one of the basic troubles is the lack of new creative talent, and that is something that the Government cannot provide. Of course, the system of music and the arts is irrational, when one thinks that the Beatles can earn a million in a day and Mozart was buried in a pauper's grave.
There is another point, which I should like to put to the noble Earl who is to reply. I do not want an answer on it tonight, but I hope that he will bear it in mind. I believe that there is a conflict in regard to the policy of donations in the public sector, involving the Arts Council, the tourist boards, local authorities, and the Government. I have noticed this more than once in going on my rounds. If we do not face these facts, there is a very great danger of the arts falling into grave disrepute. I understand that a 14 per cent. rise is needed, but I think that we are very unlikely to get it. The only solution is for the noble Earl, Lord Avon, to produce for us a new Beethoven and a new Shakespeare. It might be a little difficult for him, but I have such confidence in our Government Front Bench that I am sure that they will do their best.
6.59 p.m.
Viscount Chandos: My Lords, I should like to add my thanks to those expressed by other noble Lords to the noble Lord, Lord Polwarth, for initiating this debate and demonstrating so vividly the severe crisis in the performing arts. The knowledge and experience of the noble Lord, Lord Marley, which he demonstrated so well in his speech, make me feel inadequate even in congratulating him, let alone in speaking further. In that vein I think that in a debate on this subject it would be appropriate to describe myself as an understudy for my noble friend Lord Donaldson of Kingsbridge, who is unable to attend your Lordships' House this evening and whose knowledge and experience will therefore be much missed.
To pursue a theatrical analogy, I fear that I have perhaps earned a reputation with the Government Benches as an "angry young man" in the year since I first spoke in your Lordships' House, so perhaps I should begin by saying that support for the arts is not a matter for political controversy and that the efforts of the present Government have not been, and should not be, under-estimated. The last 10 years have seen an extraordinarily difficult economic environment in this country, and it is a tribute to all the Governments which have held office during this time that the arts have continued to thrive. There is, however, now a clear danger that the achievements of the artistic world and of successive Governments in nurturing it through thick and thin will be jeopardised by the relentless economic squeeze.
I think it is easy for my generation to take for granted the quality and range of choice of the

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performing arts which are now available, not only in London but throughout the United Kingdom. I was, therefore, particularly struck by a passage in the recent article by the successor to the noble Earl, Lord Drogheda, as chairman of the Royal Opera House, Sir Claus Moser, which was published in the Financial Times recently. In fact, the whole article seemed to me to portray the current position and problems so well that I was strongly tempted to read the entire peice to your Lordships rather than to inflict on you my own views. I believe, however, that that would be not only out of order but also time-consuming, None the less, I hope your Lordships will bear with me if I read a short passage:
"One does not have to go back beyond the lifetime of at least the older ones among us to see a scene totally different from today. Take the 1930s. Opera in London meant mainly summer seasons lasting a few weeks, and outside London there was the Carl Rosa Company and Gilbert and Sullivan. That was about the sum of it. Audiences can hardly have numbered more than a few tens of thousands, mostly well-off and, of course, there was no public subsidy.
"Here we are, a mere 50 years later, with London alone typically putting on between 300 and 400 opera performances and as many again outside. There must be well over a million 'bottoms on opera seats' in a year . . .
"It is a stunning transformation and the same story could be told of theatre, ballet, museums, music generally and so on. Much of this is owed to the sensible use of public subsidy, a credit to successive Governments and Arts Councils".
I hope that every visitor to British theatres, opera houses and arts theatres during this Christmas season can be reminded of how much we have to lose if we do not find ways of helping the performing arts at a time of crisis.
The case for maintaining our artistic life at its present level is, of course, a broad one, relating to the quality of life of every section of the community. The fact that there can also be narrower economic grounds for support should be seen as a bonus.I will join the noble Lord, Lord Mancroft, in reminding your Lordships that tourism in the United Kingdom contributes substantially more to our invisible earnings than the City of London, and while the British weather may be as unfairly maligned as the j British worker, it is undeniable that a large number of visitors to this country are attracted by our outstanding artistic life.
If the contribution of the Government to the country's artistic and cultural richness has been substantial, the private sector has played an important role as well. In recent years business sponsorship of the arts has been increasing rapidly in real terms, with estimated support in 1980 of £4 million, rising this year to around £7 million, as the noble Lord, Lord Polwarth, pointed out. The most recent annual report of the Association for Business Sponsorship of the Arts includes a list of sponsors which demonstrates the contribution which companies now make to our artistic life, as well as the valuable role played by ABSA itself in advising both sponsors and artists on the right way to balance the sometimes difficult and different demands of art and commerce.
The immediate priority must be, however, that central Government support for the arts is increased to ensure that there are no casualties in the performing arts over the next year that lead to irreplaceable loss to the country's artistic life. The sum needed for this
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purpose, perhaps £10 million in the next financial year, may represent a substantial increase in the total central Government expenditure on the arts, but in relation to public expenditure as a whole it is tiny. It is difficult to imagine any area of public expenditure in which value for money could be achieved through such a comparatively modest sum.
In the longer run, however, I feel, like my noble ally Lord Beaumont of Whitley, that there must be a reexamination of the way in which central Government, local government, business, the media and the artists themselves work to maximise the revenue available for the performing arts. The Arts Council has long had a policy of favouring applications where real efforts have been made to raise at least some part of the required funds from the private sector. I should like to ask the noble Earl whether any extension of such a principle is considered feasible, so that for approved projects or applicants the Arts Council might allow a fixed sum plus an amount based on that raised additionally through private sponsorship or donations, perhaps on a ratio of £2 additional Arts Council support for every £ 1 raised from the private sector. In my view it would be better to institute such a scheme than to introduce greater tax concessions to those supporting the arts—as the noble Lord, Lord Stodart, suggested—which might further diminish the influence of individuals and smaller corporate supporters compared to that of the wealthiest and largest companies. Commercially-based support will inevitably favour the more conventional and less experimental areas of the performing arts, so that grants related to individual donations and contributions must be a more effective method of protecting the interests of the smaller groups in the performing arts without prejudicing the continuation of our flagship enterprises.
Although I have just exceeded my time, I should like to make a further point. This week may well mark the demise of the Riverside Studios in Hammersmith, which seem to me to have established in a short time an outstanding reputation as a model for a successful community arts centre. To an outside observer—and I have no connection with the studios—their fate seems to have depended on local politics more akin to a BBC production of "The Borgias" than to a sensible approach to the performing arts. Here seems to be an outstanding opportunity for commercial interests, local government, central Government and the media to combine forces and establish a pattern for the future that allows the performing arts in the United Kingdom not merely to maintain its health and quality but to rise to new glories.
7.8 p.m.
Lord Auckland: My Lords, I crave the tolerance of your Lordships for indulging in two debates today. I believe this to be a very important debate and I should like to add to the congratulations already extended to the noble Lord, Lord Polwarth, who, over the years, has done so much for the arts. The insurance companies have been particularly outstanding in the field of sponsorship and, although I earn my own living in the insurance industry, no company with which I have been concerned has been thus involved so that I have no financial interest to declare. So far as the

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Scottish National Orchestra is concerned, my wife and I went to the last of their concerts two years ago when they made a tour of the United Kingdom. It was a highly successful tour. I knew that they had just returned from a tour of America. I hope that it will be possible for them to do more overseas tours, because they are an outstanding orchestra and I believe that much can be done for our balance of payments by splendid organisations of this kind.
I should like to devote a few minutes to the theatre and, particularly, to the repertory theatre. I have been involved for many years in the Thorndike Theatre at Leatherhead. I was a trustee when the new theatre was built just over ten years ago and I and my family have taken a great interest in that theatre ever since. The late Dame Sybil Thorndike herself followed every move in the theatre. She was present at the topping out ceremony; she acted in the second production of the new theatre. That great lady of the theatre certainly made her name even more immortal by her marvellous work in this theatre.
The current Arts Council grant—which I have checked this afternoon—is £ 151,000.I gather that any increase in this figure is unlikely. The Surrey County Council provide £12,800, and the local authority, the Mole Valley Council, £30,000. I do not know what percentage of the rate that is. There was a time when local authorities were asked to produce a sixpenny rate under the old coinage. I do not think that many authorities have done that. To be fair to local authorities these days, who have many vital social needs to deal with, is it necessarily fair to expect such a contribution? Nevertheless, this theatre is nearly always full. It has an exceptionally fine management committee and a devoted set of artists who, like all repertory theatres, subsidise the theatre. Also, their designers and everybody else do an absolutely marvellous job. It means that those who do not live in London—and I am not only thinking of the Thorndike Theatre—do not always have to go to theatres in the West End of London.
Some years ago I initiated a debate in your Lordships' House on the subject of the then Arts Council report. I coined a phrase: "penicillin before Puccini". Penicillin is a lifesaving drug; Puccini is a great composer. If one gets one's priorities right at a time when we are needing funds desperately for our health service, for housing, roads and so on, we have to get into proportion what the Arts Council can be granted for the arts. This is something which is sad to have to say. As I say, we must get these matters into proportion and also pay tribute to those companies which sponsor the arts. I hope that they can get some kind of financial relief in so doing because they add to our export potential.
There is much more that could be said, but may I say this finally. The National Youth Orchestra of Great Britain has always been one of our finest orchestras. The Pianist of the Year competition, which is sponsored by one of the television companies, has produced some remarkably fine British pianists. If we cut down too much, what of the future of our young instrumentalists? Can they play with the Hallé Orchestra, the Scottish National Orchestra and all these fine orchestras? In the theatre, can our budding actors really get jobs worthy of their hire? This is the kind of
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subject which leads one into a veritable dilemma; but the future of the theatre and the performing arts of this country is a heritage too valuable to be overlooked.
7.14 p.m.
Lord Jenkins of Putney: My Lords, I think that on this occasion the tributes which were paid to the noble Lord, Lord Polwarth, for introducing this debate were no ordinary customary statement. I believe that they were deeply meant by everybody who has spoken in the matter, and every noble Lord who has spoken has paid that tribute. It is the case that at the moment the arts are in a condition of crisis and therefore it is appropriate that at this point we should have—however brief and short it may be—a discussion upon them and the noble Lord has done us a service in making that possible.
It is also possible not to be purely perfunctory in welcoming the maiden speech of the noble Lord, Lord Marley, even if he has taken a little time to get around to it. He demonstrated to us the fact that if he decides to continue his contributions to us—and I hope he will decide without too much delay—he will do so out of a knowledge, background and with a facility which will enrich our debates in the future. I must resist the temptation that there is to try to comment on the very well informed speeches that we have heard from all parts of the House. I do so because of the time factor. However, that duty will evolve upon the noble Earl and I must try not to take up time which he will use in performing that task—a very welcome task though it would be for me on this occasion.
One aspect of the matter has not been fully touched upon and I should like to spend my time chiefly on that. I prefer to refer to the "performance arts" rather than to "performing arts"; I know that the words "performing arts" have come into the language; but the arts do not perform, it is more correctly the "performance arts". But I give up. I think that we have to accept the "performing arts". I do not think that we can do anything about it. It is too late.
The question may reasonably be asked: why is it they are always in financial difficulties? Why is the theatre always short of money? Why did the Arts Council summarily cut off 41 recipients of grants last year and thus ensure the demise of some enjoyable and valuable productions and companies? Why, since they get more and more money every year and the State assumes a larger and larger share of the financial burden, are they never satisfied? Why do we never reach a plateau? The reason was very convincingly set out in 1966 by Baumol Bowen in their magisterial book The Performing Arts—The Economic Dilemma. That came from America, I need hardly say.
This book was referred to in the eighth report of the Education, Science and Arts Committee to which tribute has been very properly paid this evening. It is a remarkable report and I am glad to be able to say so at this Dispatch Box. In a notice which I wrote on this report, the congratulatory section was cut for reasons of space, much as much else that I was hoping to say tonight is going to be cut for reasons of time. However, I can at least get in a few words of appreciation of what is a remarkable report.
I hope that—as is not always the case with every report that one sees—the Government are going to

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take notice of the 71 recommendations of that report. Not all of these recommendations are of equal value. I do not agree personally with all of them. There is one most important recommendation; that is, that the money that is going into the arts must be very substantially increased. I hope that the Government are going to take that seriously to heart, and I hope that we shall hear promisingly about that from the noble Earl in a few minutes. As I was saying: why do the arts never reach a plateau? This book on the economics of the arts has been my bible in office and most of the time out of office ever since. I dislike the title, but the authors have put their finger on the arguments, and to summarise a book of this kind is always to risk weakening the argument or compressing it into obscurity. However, I think the authors would agree that, expressed at its simplest, the arts are both labour-intensive and marginal.
If I may add a gloss of my own, technological development in the performance arts takes place alongside the original form instead of transforming it into a replacement medium. By that I mean this: the theatre remains the source medium even when the mass audience has deserted it for the cinema, the television or whatever may be the latest technological development. If we wish to retain the source, we have no alternative but in one way or another to sustain it by the injection of financial supprt to the box office income on an increasing scale. I should like, if I may, to quote from the introduction of the book:
"The basic difficulty arises… from the economic structure of live performance. This conclusion has implications that are rather sobering. It suggests that the economic pressures which beset the arts are not temporary'—they are chronic. It suggests that if things are left to themselves deficits are likely to grow. Above all, this view implies that any group which undertakes to support the arts can expect no respite".
My Lords, the Government can expect no respite. No government, once into the business of arts patronage, can ever get off the escalator. I return to the book:
"The demands upon its resources will increase now, and for the foreseeable future. … a state of financial crisis may not just be perennial—it may well grow progressively more serious."
That is an American book. It applies in America and it applies in this country, and at all points where the arts are subsidised and by whatever means. It means that subsidy, and a growing subsidy, is necessary and cannot be avoided. The result of the transportation of technological change into another medium—chiefly into television in our present case—is that the original medium remains as labour-intensive as ever, and nothing whatever can be done about it.
It was in this book that I first encountered the hilarious exposition which was originally written—I know not by whom—in a British Civil Service magazine. It purports to be the report of a work-study engineer after visiting a concert at the Royal Festival Hall. I have mentioned it to your Lordships once before, but even under the present pressure of time I cannot resist another short quotation. The report says:
"For considerable periods the four oboe players had nothing to do. The number should be reduced and the work spread more evenly over the whole of the concert, thus eliminating peaks of activity.
"All the 12 violins were playing identical notes; this seems unnecessary duplication. The staff of this section should be drastically cut. If a larger volume of sound is required, it could be
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obtained by means of electronic apparatus. Much effort was absorbed in the playing of demi-semi-quavers; this seems to be an unnecessary refinement. It is recommended that all notes should be rounded up to the nearest semi-quaver."
It continues in that vein. I wish I had the time to read more of it. because it gets even funnier as it goes on. The point is that if you are going to play Hamlet in the theatre, on the stage, you need as many people as was the case in Shakespeare's time. There is no way in which the arts can compete with the changes that have taken place in the post-war period in our industrial society.
I will not trouble your Lordships with the economic argument, because there is not enough time; it shows that in the circumstances ticket prices cannot be raised enough—we have had practical examples of that—to compensate, and therefore the income gap must grow each year. What emerges from the book is that inflation in the arts must always be relatively much higher than is generally the case; and this of course applies to other areas where labour is intensive, such as hospital and welfare services.
As economists often argue, it is necessary to increase production if inflation is to be avoided, and it follows that in an inflationary world the cost of services of a non-productive and labour-intensive character must relatively increase indefinitely at a compound rate. It further follows that inflation in the arts and services must be substantially higher than inflation in industry generally.
I think I have not more than perhaps another few minutes, but in that few minutes I should like to say this. The Treasury takes no account of all this. When I became Minister for the Arts in 1974 I found that the increase in subsidy for the previous year was actually below the rate of inflation. I managed to get it 3 per cent. above the average, but even that was much less than the actual figure in the arts which, as I have just said, was much higher than the average. In short, the message is that if an increase in subsidy is based on an average inflation rate, the arts will always be in difficulty, for they have no way of reducing their inflation to average, let alone below it; and ticket prices are generally at the top the market will bear.
If it is true that the Arts Council is to receive less than 5 per cent. increase this year, we will be in serious difficulty. I will not proceed with that argument because of the time factor, but I hope that the Arts Council will reject any such draconian reaction as the drastic cuts it embarked upon last year. I hope, too, that when the noble Earl comes to reply he will be able to tell us that it is not the case that the Government are going to restrict their increase to a figure of 5 per cent. or less. If that were to happen we would indeed be in dire trouble, and I hope that the noble Earl will be able to give us a little assurance on that point. I know that his heart is in it and I hope that his head will be able to lead him in the direction I have urged.
7.27 p.m
The Earl of Avon: My Lords, the other night I went to the National Theatre and listened to a subsidised production of "Guys and Dolls". In it there was a very nice Salvation Army brass band. I do not know if others of your Lordships are as cold as I am but I think it would warm us all up if we could have a rendition at

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this moment. I join in the universal welcome to my noble friend Lord Polwarth for giving us the opportunity for this debate on a subject of such importance and topicality. His was a most forthright and constructive contribution. I have listened with interest to the many helpful points made by noble Lords this evening and I welcome the opportunity to attempt to reply to at least some of them. I know that what has been said here today will be taken into account by the very many interests whose cause it is to further the arts, including, of course, my right honourable friend the Minister.
I should like to join in the general congratulations to my noble friend Lord Marley on his very entertaining speech with the many and varied examples he gave. One of them, "Tom Jones", reminded me that many years ago I was asked to contribute some money to that particular production. Perhaps if I had done so I would not need to be standing at the Dispatch Box now.
The noble Lord, Lord Beaumont, in a very interesting speech, produced some interesting suggestions about vouchers, which I look forward to looking into. I would like to say to him that I do not think it is the case that public support is given only to arts activities patronised by the better-off. In the first place, the Arts Council has a charter responsibility to bring the arts to the widest possible audience and to assist a very wide range of activities. The national companies themselves play to a very mixed audience and they have ticket policies to encourage the young and the less-well-off.
As a number of speakers have made abundantly clear, the arts are, to a large extent, dependent on public subsidy. There is no way round this, given the limits to box office returns—which, incidentally, many noble Lords have touched on—the need to attract the widest possible audience and the essential requirement of a continuing level of funding, to ensure that new productions and performances can be developed and mounted. Understandably, therefore, interest turns on the level of grants to be announced by my right honourable friend the Minister for the Arts for the year 1983–84.
I am informed that the announcement will be made shortly, but neither this House nor I is in possession of this information today, and, therefore, I am unable to comment on the last remark of the noble Lord, Lord Jenkins. Nevertheless, it is worth reminding your Lordships that this Government are pledged in their manifesto to continue to give,
"as generous support to Britain's cultural and artistic life as the country can afford".
I believe that the figures to date speak for themselves, and the noble Viscount, Lord Chandos, was very generous in his comments. The Arts Council has received successive grant increases from £70 million in 1980/81, to £80 million in 1981/82 and £86 million in 1982/83. By any standards, that is a lot of public money and I believe that it demonstrates the Government's commitment to the arts.
I recognise, equally, of course, that the arts are particularly sensitive to inflation and that when rises in inflation are taken into account, it can be said that the arts have not had an increase in real terms. Nevertheless, the Government have done all in their
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power, at a time of retrenchment of public expenditure, to ensure that the arts programme, as a whole, can continue without fundamental change. My noble friend Lord Stodart paid tribute to this.
Looking ahead to next year, the House will know that the Government's planned public expenditure levels for the arts, taking central and local government expenditure together, assume an increase of about 4–1 per cent. I cannot, of course, anticipate again how the 1983/84 figures will be broken down. As I said before, this will be the subject of my right honourable friend's announcement. But I should like to point out that the Government's projected expenditure figures are broadly in line with expectations on pay and price increases, and these in themselves do not sustain an argument that on this basis the arts are likely to suffer any major disasters.
In saying this, I have, of course, taken due note of the various instances of hardship and financial difficulty that have been quoted. But, we have to look at these, too, in perspective. First, there is a continuing need for economies within all publicly funded bodies, just as much as within Government themselves. An arts company, like this country, cannot live beyond its means. Of course, it is regrettable that some companies have to reduce their commitments or even, in a limited number of cases, to close.
In particular, I recognise, as does my right honourable friend, the difficulties caused by the decision of the Royal Opera House to cancel its visit to Manchester next year. But the discipline of a careful look at costs, and the need to measure opportunities against resources, should be no less welcome in the arts than elsewhere. This brings me to an important consideration which should be reiterated. The Government take decisions about the overall level of support for the arts, but they are not responsible for the way in which that support is allocated to individual companies, or, in turn, for the way in which those companies discharge their responsibilities.
Over the years, we have built up in this country the principle of independent bodies which mediate between Government support and the consumer organisations. In the field which we are discussing tonight, there are such bodies as the Arts Council, the British Film Institute and the Crafts Council; in other fields, one can cite the University Grants Committee—and I did not put that in after the noble Lord, Lord Annan, spoke—as well as the research councils. This is a tried and trusted mechanism for avoiding direct pressure by the Government of the day to support their own particular, and often temporary, interests. Equally, it means that it is wrong to look to Government to solve the crises which may occur with individual companies or situations. These are properly matters for the Arts Council and its client bodies. I am sure that the Arts Council does not rationalise to the degree that the noble Lord, Lord Annan, wishes, but I think he did it less than justice in its aim to keep a balance.
Perhaps I may take this moment to say a few words about the problems of the Royal Opera House visit to Manchester. I recognise the disappointment caused in Manchester by the cancellation of the 1983 visit. Noble Lords may, however, be aware that statements were issued last night by the Arts Council and by the

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Greater Manchester Council to the effect that, following a very useful and constructive meeting yesterday, there is some possibility that the previously uncovered estimated deficit of £370,000 on the Royal Opera House Manchester season may be covered in—rather mysteriously—one way or another. I also understand that further talks are taking place between the various parties concerned, and I very much hope, as I am sure does the whole House, that the possibility of covering the estimated deficit may become a reality.
On the Government's level of commitment, I should like to disentangle two separate strands of the arguments which are worth examining. These came slightly as a result of the article to which the noble Viscount, Lord Chandos, referred. First, it is said that the arts are an economic force in the country, a source of employment and tourist attraction and should be supported for this reason. Secondly, it is suggested that they have an inherent value to society in terms of adding to its happiness rather than its prosperity. The Government recognise that both these points have validity; they underlie the degree of central support given to the arts in the last few years that I have already quoted. But neither leg of the argument in itself is a claim for a specific level of support.
It is to the credit of the many imaginative and committed individuals and institutions in this country that the arts will always absorb what can be given to them. For practical purposes, nevertheless, the immediate benchmark must be the historic level of funding. I understand that the Arts Council have asked the Minister for the Arts for £98.5 million for 1983–84—my noble friend Lord Mancroft commented on this—which is an increase of 14½ per cent. over the current level of support, and they regard this as still £ 10 million short of what they would like as a desirable level. I have no doubt that my right honourable friend the Minister for the Arts would like to be able to meet an increase of this order, but I think it is an unrealistic expectation at the present time. The noble Lord, Lord Jenkins, commented on bodies making requests to Ministers. There is simply not enough money to go round from the public purse, however desirable the objectives may be in themselves. The belief of this Government is that a different approach is necessary to the funding of such objectives. Inevitably, there must be a basic level of public support to enable a satisfactory arts programme to be maintained and developed. We believe that we supply this. But beyond this, it is, and it should be, a matter of self-help.
It is for the bodies in the field, for the Arts Council and the individual arts companies, to develop a strategy which maximises the value from a given level of resources and which attracts the highest possible degree of support from other sources—from the box office, from marketing techniques, from streamlined management and good union practices, and from private support, be it from individuals, friends' organisations or business sponsorship. That, this Government believe, is the way forward—not by expectations, year by year, that support for the arts will be well above the expected inflation rate.
I think, too, that we do the arts a disservice in this country if we assume that they are totally dependent
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on such support for their future prosperity. The noble Lord, Lord Rhodes, made some interesting comments here. Two things stand out historically about the way the arts have flourished in the last 20 or 30 years: the fact that we have built up a world recognised level of performance in many artistic fields—and, like other noble Lords, I can cite theatre, music, opera and dance—and the fact that the artistic companies concerned have consistently been able to develop and take new opportunities, in spite of the grant restraints which have always existed. There is no reason to suppose that these trends will not continue, given an assured historic level of support.
The arts are inventive, inspirational and ingenious, and for this reason we should not seek to ossify the system. I do not think it follows that any particular company will always be able to maintain itself at the highest possible level. Thus the Arts Council is in a continuous dialogue with individual companies about their requirements, and the possibility of withdrawal in one area to advance on another must always remain open. We should not regard any arts organisation as sacrosanct in its present régime, management or structure. It lives by change. The fact that we have to some extent a changing picture of support among individual companies is not something to denigrate; rather it is a reflection of the health of our society that there are options and choices which remain open, without asking the taxpayer for an inordinate sum to shore up every individual venture.
As I have said, the Government cannot, and should not, be seen as the sole provider of the arts. Local authorities have a very large role in funding the arts, and I am happy to say, on information so far available about their expenditure in the current year, that their support for the arts has held up encouragingly well. I must now add the words. "South of the Border" to this particular phrase. With a few exceptions, local authorities have not asked the arts to bear an unfair share of any necessary economies. Indeed, the reverse is true in some cases. Many have taken a major interest in new ventures. I will give, as two examples, the new civic theatres in Plymouth and Swansea. Long may such support and interest continue. Regional arts associations also have an important part to play in dispensing Government money received from the Arts Council. They do it at a level where the smaller individual arts activity can be closely analysed.
But public expenditure, whether central or local, is not enough—nor should it be. The arts have a good track record in attracting private support. We have had an interesting example: the North-West area. However, I believe that private support can be improved. Box office takings, as a percentage of total revenue, vary greatly from company to company and activity to activity. This is something which needs to be studied closely, and where the best ideas and achievements, particularly in terms of marketing operations, need to be widely disseminated. Similarly, management practices, staffing levels and union agreements need to be kept under review. Most performing arts organisations are inevitably manpower intensive. It is therefore all the more important that they should keep their use of manpower regularly under scrutiny. I am sure that many organisations have already learned this lesson.

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I turn last, but by no means least, to business sponsorship, which I know is a particular concern of the noble Lord, Lord Polwarth. There is every sign that business sponsorship is a steady contribution to the arts and one which we can expect to grow as economic conditions improve. It is currently contributing, on the somewhat conservative estimates of the Association for Business Sponsorship of the Arts (I am a little more "bullish" than my noble friend) around £8 million a year. I am happy to pay tribute to the work of the association and to all those individual companies who have aligned themselves with support for the arts. It is not a question of philanthropy but of mutual interests being served. I believe that such liaison should be encouraged, and I would ask noble Lords in their own spheres of influence to do all they can to help. My noble friend Lord Mancroft gave us an excellent example about Bath.
I have not taken this evening the opportunity to talk about the very welcome report from the Select Committee on Education, Science and the Arts on public and private funding of the arts, because it would be premature for me to do so. I recognise, like other noble Lords, that many of the ideas have been of great interest. My right honourable friend the Minister for the Arts is currently taking soundings about them before putting together the Government response. May I simply say, in answer to the particular points in the committee's report which have been highlighted by your Lordships, that your Lordships' views will be taken into account in these soundings. I agree with many noble Lords that the Select Committee system has proved itself again in producing a report which has focussed not merely on funding the arts, but on a whole range of problems underlying this simple concept. My noble friend Lord Polwarth and one or two other noble Lords spoke about covenants. I recognise the point made about the need to offer further incentives for companies and individuals to support the arts. These are matters to which the Select Committee on the public and private funding of the arts has drawn attention. I know that these proposals will be carefully considered.
The noble Lord, Lord Polwarth, and my noble friend Lord Stodart of Leaston talked about the situation in Scotland. I realise that this is an especially difficult problem. The situation in Scotland is a matter, in a way, for the various local authorities there to decide. However, I appreciate the points made by my noble friend. In the meantime, I can assure him that his remarks will be brought to the attention of my appropriate colleagues. I thought for one moment that the noble Lord, Lord McGregor of Durris, might be speaking on Scotland, too, but fortunately he turned to the more neighbourly Walthamstow. I recognise the funding problems referred to by the noble Lord and I appreciate his plea. However, it is really a matter for the Arts Council. But I note that the Select Committee drew attention to the Scottish experience in funding amateur as well as professional work. I gladly undertake to draw the attention of my right honourable friend to the interesting suggestion of an emergency fund.
I am beginning to run out of time, but I should like to answer the question about the Riverside Studios which was asked by the noble Viscount, Lord
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Chandos. I was sorry to learn that this arts centre is to close from 5th December, at the end of the Kantor season. I know that my right honourable friend hopes very much that when the development plans for the Riverside site are agreed between all parties, the future of the arts centre, as part of that development, will be assured.
Since the war we have built up a tradition of artistic excellence in this country over a whole range of performing arts which is second to none. It is not the Government's policy to jeopardise that achievement, Many of the points which have been made here tonight are valuable in support of the case for the arts. The arts must seek to combine public help with private endeavour. They must be ready to look critically at their own use of resources. They must be ever vigilant to maximise income from all sources and they must continue to keep their dynamism. The belief of my right honourable friend is that all these things can be achieved, and that we are facing not a crisis but a renewed opportunity to demonstrate the value of the arts to our economic and social life.
7.44 p.m.
Lord Polwarth: My Lords, I hope I may be considered to have one minute left for my reply. All I will do is to thank the noble Earl, Lord Avon, for the great trouble he has taken with his reply and express the hope that, as he said, he will convey the views of this House to the Government in their consideration of this report, while bearing in mind that we are not crying "Wolf!" about the straits of the arts and that they cannot expect for ever that organisations will be able to go on turning out their high standards under the pressures to which they are subjected. I am most grateful to him.
I should like to thank all noble lords who have supported me throughout the debate. Again, may I in particular express gratitude to the noble Lord, Lord Marley, for his splendid maiden speech. As a byproduct, we have had revealed to us the hidden talent which exists in this place. I look forward to your Lordships' production of Lord Marley's South Bank revels, with my noble friend Lord Stodart of Leaston in the role of the Queen of the Fairies, to the accompaniment of my noble friends Lord Mancroft and Lord Rhodes on their 'cello and cornet respectively. As for myself, having once been privileged to take over Sir Alexander Gibson's baton to conduct an encore at a Scottish promenade concert, I shall volunteer my services as the conductor. My Lords, I beg leave to withdraw my motion for Papers.
Motion for Papers, by leave, withdrawn.

House of Lords Offices
First Report from the Select Committee made and ordered to be printed.
House adjourned at fourteen minutes before eight o'clock.

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