Sitting of 13 December 1982

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

PRIVATE BUSINESS
EPSOM AND WALTON DOWNS REGULATION BILL [Lords]
NOTTINGHAMSHIRE COUNTY COUNCIL BILL [Lords]
Orders for Second Reading read.
To be read a Second time upon Thursday.

Oral Answers to Questions
  ENERGY

    Wages Costs (Coal Industry)
    Mr. Welshasked the Secretary of State for Energy what was the change in real wages costs per tonne in the United Kingdom coal industry in 1981–82.
    The Under-Secretary of State for Energy (Mr. John Moore): Industrial wage costs per tonne fell in real terms by 2·6 per cent. in the year 1981–82 compared to 1980–81. This fall was due to higher productivity. Wage levels were maintained in real terms.
    Mr. Welsh: I thank the Minister for that reply, but does he agree, on this special occasion, that other costs must be
    2
    taken into account, such as those of disasters in mines, like the Coventry accident this weekend, which was a terrible cost? Will the Minister, because of those circumstances, convey our deep thanks to all who took part in the rescue so speedily and so well, and convey to the injured and their loved ones our best wishes for a speedy recovery?
    Mr. Moore: I am sure that on this occasion the hon. Member, with his long experience of the mining industry, expresses the mood and sentiment of both sides of the House. I visited the colliery on Saturday afternoon and the men in hospital. I am happy to report that at that time, and since, the men were well on the way to recovery. When I last heard, seven men were in hospital. I shall convey to the industry and to those involved in the excellent and courageous rescue operation the good wishes and the sentiments of the House.
    Mr. Rost: Will my hon. Friend confirm that although productivity has shown a welcome marginal increase, the deficits of the National Coal Board look as if they will be above its estimates for the current year? How will those deficits be financed unless there is a speed up of closures of uneconomic pits?
    Mr. Moore: Despite the present difficulties in the market, it is difficult to judge the current deficit. We hope that the National Coal Board will stay, as it wishes to, within its current EFL.
    Mr. Rowlands: As one who represents a mining community, I share the sentiments of anguish and grief expressed by hon. Members on both sides of the House about the colliery disaster.
    With regard to the main question, does the hon. Gentleman understand the deep sense of frustration that is felt in many parts of our coalfields, particularly in the Welsh coalfield, about the cutbacks in capital investment which will endanger the development of that coalfield? For example, is he aware that the cutback in capital expenditure in the Welsh coalfield has been 40 per cent. or more in real terms? Will the Minister re-examine these figures, because that is the basis for the frustration and anger recently expressed in that coalfield?
    Mr. Moore: As the hon. Member knows full well, the investment in the coal industry that is approved by the Government goes to the coal industry as a whole. As he also knows, the decisions on where to put that investment must be a matter for the board, and both Conservative and Labour Parties, when in Government, have given the coal industry since "Plan for Coal" £4½ billion in investment, £1½ billion in excess of that anticipated in "Plan for Coal".

    Nuclear Materials (South American Exports)
    Mr. Dalyellasked the Secretary of State for Energy whether any nuclear materials have been exported from the United Kingdom to South America over the past year.
    Mr. John Moore: The export of plutonium, uranium, thorium and their compounds is controlled through licences issued by the Department of Trade. Exports were made in the past 12 months under such licences to Brazil, Guyana, Peru, Uruguay and Venezuela. All exports were in such small quantities of materials that they could not be used to make a nuclear weapon. Where necessary, the materials are safeguarded under agreements with the International Atomic Energy Agency.
    Mr. Dalyell: Is the Minister aware that there are almost certainly six plutonium bombs in Campo de Mayo? Although almost certainly the result of the Falklands war has been to expedite the Argentine nuclear capacity, based on ex-Nazi scientists, none the less, if we are exporting very little, what about the French? What help is France giving—
    Mr. Speaker: Order. The hon. Gentleman knows that he must question the Minister about the things for which he is responsible. He is not responsible for the French Government.
    Mr. Dalyell: In that case, are we certain that exports to Peru do not find their way across the Andes to Argentina?
    Mr. Moore: All the exports from the United Kingdom this year and in previous years have been of quantities insufficient to make a nuclear weapon. All exports of nuclear materials are covered by safeguard agreements and bilateral notes, effective through countries where there are intermediaries, such as the Federal Republic of Germany.

    Heat Conservation (Publicity)
    Mr. Colvinasked the Secretary of State for Energy if he is satisfied with the publicity available setting out the most up-to-date recommendations for the conservation of heat.
    The Under-Secretary of State for Energy (Mr. David Mellor): Yes.
    Mr. Colvin: I thank my hon. Friend for that comprehensive reply. Is he aware that many local authorities are underspent on capital account and that the current estimate for this financial year is about £1,000 million? Does he not consider that public capital invested in thermal insulation of both domestic and other buildings would give the nation an immediate return in terms of the energy saved? What is his Department doing to persuade local authorities to improve their performance in this respect?
    Mr. Mellor: That is a matter primarily for the Department of the Environment. But my hon. Friend
    4
    raises an important topic, and I am happy to tell him that a good number of the additional capital investment allocations already made to local authorities have included provision for precisely this sort of investment. About £1·2 million has been made available for additional grants under the homes insulation scheme over and above the level previously announced.
    Mr. Palmer: Does the hon. Gentleman not agree that the Select Committee on Energy recently produced a comprehensive report on the conservation of energy in buildings? When can we expect the Government's observations and some action on it?
    Mr. Mellor: The Chairman of the Select Committee was notified by the Department that we hoped to have our response available by Christmas. The response is already far advanced and I hope that we shall be able to keep to that deadline.
    Mr. Penhaligon: What methods have the Government at their disposal for making a judgment about the average level of conservation in domestic properties? How does the hon. Gentleman reckon that it has changed in the last two or three years?
    Mr. Mellor: We know the overall consumption level for energy. Often it is a matter of a guestimate to know how to attribute that. But there has been a decline of between 6 and 7 per cent. in recent years as a result of insulation and other measures taken in the home. I am happy to tell the hon. Gentleman that the figure in 1981 for, say, the number of lofts insulated showed a welcome increase on the year before. In 1981 some 800,000 householders either put in insulation for the first time or added to inadequate insulation already there.

    North Sea Oil Fields (Taxable Capacity)
    Mr. Michael Morrisasked the Secretary of State for Energy when he last met representatives of the oil industry to discuss the taxable capacity of future North Sea oil fields.
    The Minister of State, Department of Energy (Mr. Hamish Gray): My right hon. Friend the Secretary of State and I last met representatives of the United Kingdom Offshore Operators Association on 2 December.
    Mr. Morris: Is my right hon. Friend aware that it is now the unanimous view of the oil companies and those who comment on and are knowledgeable about on the oil scene that the time has come for a change in the taxation of marginal fields especially, otherwise their development will be restricted? If there are to be changes, is it not appropriate that they should last at least five years, so that there can be planned development of those important assets?
    Mr. Gray: I recognise that many future fields are likely to be smaller and may be more marginal than earlier fields. I am anxious to reach a better understanding with the industry on assessment of the taxable capacity of these fields. For that reason, consultations have been taking place with the oil industry. My right hon. and learned Friend the Chancellor of the Exchequer will have to make his own assessment on these matters, of course, but my hon. Friend may be assured that the position is being looked at constantly by the Government.
    Dr. J. Dickson Mabon: In the assessment of these matters, is it the Government's intention that net self-sufficiency in oil will be continued into the 1990s? Does that not mean that about 30 marginal fields will be required to be considered under very special taxation arrangements if they are to be brought into production?
    Mr. Gray: Given the right hon. Gentleman's experience of Department of Energy matters, he will appreciate that it is not only taxation that influences decisions by the companies to proceed. I am happy to tell the House that today plans have been approved by Britoil for the Clyde field, which can now go ahead. This is a £1 billion project. The right hon. Gentleman will also be aware that the Government have pursued a vigorous policy of licensing to create maximum exploration so that discoveries may be made and the position that he desires may be achieved.
    Mr. Douglas: Does the right hon. Gentleman accept that while taxation remission for the marginal fields is interesting, there is another way to go? It is to keep down production costs, especially of the facilities which are put over the fields. What assistance is the Department giving to British enterprises to ensure that when and if new production techniques are evolved Britain is in the forefront?
    Mr. Gray: My Department is doing all that it can through the Offshore Supplies Office to give maximum encouragement to British companies in their efforts to obtain orders from the United Kingdom continental shelf. However, it would be a mistake for British industries to think that all their orders can be supplied from the continental shelf. With that in mind, we are doing all that we can to encourage our companies to bid for overseas work, especially on the Norwegian continental shelf.
    Mr. John Smith: Is the Minister aware that the frequent changes in taxation policy since the present Government came to office have made the taxation of oil companies scarcely intelligible and very capricious in its effect? Will the right hon. Gentleman undertake to simplify the structure and see whether he cannot create an incentive for further exploration, which, after all, is what we want to achieve in the North Sea?
    Mr. Gray: I do not think that the right hon. Gentleman and I differ about our ultimate objectives for encouraging investment in the North Sea. My right hon. and learned Friend the Chancellor of the Exchequer will be considering carefully the best taxation policy to follow. However, I should remind the right hon. Gentleman that, until the end of November this year, no fewer than 102 exploration and appraisal wells had been drilled. This is second only to the record year of 1975, when 116 were drilled.
    Mr. John Smith: Under a Labour Government.
    Mr. Gray: Yes. That was when the right hon. Gentleman was Minister of State. But I hope very much that, weather permitting, we shall be able to beat that record this year.

    Oil Reserves
    Mr. Chapmanasked the Secretary of State for Energy by what amounts his predictions of United Kingdom total recoverable oil reserves have varied in the last five years; and what is the latest figure.
    Mr. Gray: The estimated range of recoverable oil reserves has varied from between 3,000 million and 4,500 million tonnes in 1977 to between 2,100 million and 4,300 million tonnes in 1982. At 1 January 1982 the estimated total remaining recoverable reserves were between 1,750 million tonnes and 3,950 million tonnes.
    Mr. Chapman: As that answer presumably confirms that we are using up our oil supplies at a greater rate than we are discovering new recoverable reserves, will my right hon. Friend confirm that it essential that the utmost encouragement should be offered companies to drill in new fields? In the light of my right hon. Friend's replies to supplementary questions just now, will he confirm that the incentives are greater today than they were, say, four or five years ago?
    Mr. Gray: There is little doubt that the incentives to explore for gas are greater today than they were four or five years ago. As a result of the Oil and Gas (Enterprise) Act, companies are now being encouraged to explore for gas in a way that was not previously possible. I remind my hon. Friend, in addition, that the seventh and eigth rounds, especially the eighth, will offer considerable acreage to this end.

    Energy-intensive Industries
    Mr. Skeetasked the Secretary of State for Energy if he will take further action to assist the energy-intensive industries.
    Mr. Proctorasked the Secretary of State for Energy what recent assessment he has made of energy price trends within the Organisation for Economic Co-operation and Development countries; and if he will make a statement.
    Mr. Hannamasked the Secretary of State for Energy how electricity prices paid by British industry compare with those paid by industry in other European Economic Community countries.
    Mr. Beaumont-Darkasked the Secretary of State for Energy when he last met representatives of the Confederation of British Industry to discuss industrial energy prices.
    The Secretary of State for Energy (Mr. Nigel Lawson): Industrial energy prices were discussed at the NEDC last Wednesday. Generally speaking, they are broadly in line with those in other European countries. Industry will get further substantial help from next year's standstill in electricity prices, worth a total of £500 million to consumers as a whole, and also from the extension of the freeze on industrial gas prices.
    Mr. Skeet: As the intensive electricity users in Europe, in appropriate circumstances, will secure discounts ranging between 15 per cent. in France and 50 per cent. in Italy, compared with negligible figures in the United Kingdom, is my right hon. Friend not being misled by his Department? Will he consider one of the appropriate answers, and that is to enable the CEGB to sell direct to the energy-intensive industries in the United Kingdom?
    Mr. Lawson: The problem of electricity prices is directly related, as my hon. Friend well knows, to the costs of generating electricity, and they are not significantly affected by whether the consumer goes to the area board or direct to the CEGB, which in this country is not the

    7
    normal approach. My hon. Friend knows, too, that the cost of coal is critical in this regard. However, the difference between what the average industrial consumer pays and what is paid by the heavy energy intensive high-load factor customer on CCL—contracted consumers load; the arrangement was brought in with the agreement of my right hon. and learned Friend the Chancellor of the Exchequer in the last Budget—is about 40 per cent. The man on that scheme pays up to 40 per cent. less per unit of electricity than the average industrial electricity consumer. Incidentally, I belatedly take this opportunity to welcome the right hon. Member for Lanarkshire, North (Mr. Smith) to the Opposition Front Bench on energy matters.
    Mr. Proctor: I thank my right hon. Friend for the assistance given to heavy energy-intensive users of energy so far, but will he accept that industry itself is always nervous about accepting estimates and figures that come from his Department? Will he consider having a regular, authoratitive, agreed and unclassified statement on energy disparities with other European countries similar to that achieved through the NEDC?
    Mr. Lawson: I do not accept that what my hon. Friend says about the nature of figures emanating from my Department is warranted. We participated fully in the NEDC task force, and at present we are well content to allow the CBI and the trade associations affected, together with the electricity supply industry and the gas corporation, assisted by our good offices, to reach agreed figures on this matter. I hope that we shall get the figures sorted out quickly. In fact, we are very near to that, and I do not believe that there is any major difference between the CBI and my Department and the Government on the figures.
    Mr. Hannam: Does my right hon. Friend accept that heavy energy users in industry face not only higher energy prices than their continental rivals, but 20 per cent. higher costs for their heavy fuel oil? Notwithstanding the concessions given during the past year and the freeze on prices, does he accept that this small but important sector of heavy energy users in industry needs further help, and will he do all that he can to assist in the forthcoming Budget?
    Mr. Lawson: I am sure that my right hon. and learned Friend the Chancellor of the Exchequer, who is an assiduous reader of Hansard, will note my hon. Friend's last remark. However, it is equally important to get the matter into perspective. Although there are certain disparities, they apply to a very small number of consumers. The disparity probably affects those with a load factor of over 80 per cent.—certainly over 70 per cent.—and even those with a load factor of over 70 per cent. are only 15 per cent. of industry as a whole. As I said, that represents only a part of the industries concerned.
    Mr. Skeet: If only a small number of firms are affected, the problem is easy to cure.
    Mr. Lawson: I am sorry. I should have said that it is 5 per cent. of industry using 15 per cent. of industry's electricity. If the tariff were tilted in such a way that other consumers paid more to help those consumers, that would cause equal dismay in other quarters.
    Mr. Beaumont-Dark: Does my right hon. Friend agree that there is considerable force in the CBI's argument that industry is being asked to bear the cost of many of the surrenders that have taken place year after year to the National Union of Mineworkers? Does he also agree that every time an uneconomic pit is kept open, which means that coal costs more, it means that jobs can be lost in private industry?
    Mr. Lawson: I entirely agree with my hon. Friend about the importance of keeping down coal costs. I hope that all right hon. and hon. Members will do all that they can to assist and support the Coal Board in its current drive to make the industry more efficient and cut the cost of coal.
    Several hon. Members rose—
    Mr. Speaker: Order. I now propose to call several hon. Members from the Opposition side of the House.
    Mr. Hardy: Does the Secretary of State accept that industries such as the special steels industry of South Yorkshire have been badly hit and appear to face competition which enjoys favourable energy prices? That is because Governments in competing countries intervene and give subsidies which in some respects appear to be in breach of Community rules and appear to have gone unremarked upon? Does the Secretary of State accept that, even in countries where energy prices may be lower than they are in this country, the input price of energy and raw materials appears to be a great deal higher than here, and that Sir Terence Beckett and his friends have had little to say about that?
    Mr. Lawson: Again, it is important to get the matter into perspective. The steel industry throughout the world is facing serious and difficult problems. To speak as though the problems were peculiar to the steel industry in this country or the one about which the hon. Gentleman is rightly concerned bears no relation to the truth. About 6 per cent. of steel costs, both direct and indirect, are accounted for by electricity. The Japanese, who are the toughest competitors in steel, pay more for electricity than do steel makers in this country.
    Mr. Stoddart: Is the right hon. Gentleman aware that the coal industry in this country contributes greatly to keeping costs down? Surely the right hon. Gentleman is also aware that coal prices on the Continent are subsidised to a high degree, sometimes by as much as between £18 and £30 a tonne.
    Mr. Speaker: Order. We must have a question, not an argument.
    Mr. Lawson: I am aware of the coal industry's contribution and I am also aware of how much greater a contribution it could make.
    Mr. Palmer: On electricity, could not the right hon. Gentleman use the Energy Bill, which is now going through the House, to remove the non-discrimination clauses on electricity tariffs for industrial users?
    Mr. Lawson: It is a nice question whether in the long run industry would benefit from the removal of the non-discrimination clauses. The hon. Gentleman should consider the case of gas, where there is no similar non-discrimination, no undue preference statute. Under the Labour Government the price of gas to industry was forced

    9
    up and the price of gas to the home was kept down. I therefore very much doubt whether the practical facts of politics are such that industry would benefit from the removal of the undue discrimination clause.
    Mr. Hal Miller: Will my right hon. Friend pause to recollect that energy-intensive industries are concerned not only with gas and electricity? Will he say anything about the future of the foundry coking coal subsidy, and whether those prices are still to be related to the oil coefficient thermal value?
    Mr. Lawson: The last matter is a trifle too technical for me, but I am sure that my hon. Friend the Under-Secretary, who knows all about these things, will be only too happy to write a letter, expressed in simple terms, which I might be able to understand. The future of the renewal of the foundry coke subsidy is under consideration.

    Nuclear Power Generating Stations
    Dr. J. Dickson Mabonasked the Secretary of State for Energy how many privately owned nuclear powered generating stations are in operation in the United Kingdom; and what recent requests he has received from individuals or private companies to build such nuclear powered generating stations.
    Mr. Mellor: None.
    Dr. Mabon: Why are we persisting with the provision in the Energy Bill that allows private companies to be main generators of nuclear power? If the Minister does not sympathise with that, why does he not scrap it?
    Mr. Mellor: If I may say so, the right hon. Gentleman is being a little perverse. It has been made clear that the Government are erecting a further barrier that would lie in the way of a private generator who wished to build a nuclear power station. As the right hon. Gentleman was happy that a private generator did not require the Secretary of State's consent when he was in the Department of Energy, I cannot understand his concern now.

    Standing Charges
    Mr. Moateasked the Secretary of State for Energy what representations have been made to him concerning the levels of standing charges charged by the electricity and gas industries.
    Mr. Greenwayasked the Secretary of State for Energy what response he has had to his proposal that standing charges should represent no more than half the total sum charged to the domestic consumer by electricity and gas boards.
    Mr. Aitkenasked the Secretary of State for Energy if he will publish the independent reviews of domestic gas and electricity standing charges.
    Mr. Teddy Taylorasked the Secretary of State for Energy what response he has received from the gas and electricity industries to his proposals on standing charges.
    Mr. Warrenasked the Secretary of State for Energy whether the electricity and gas industries have yet responded to his request that they should limit standing charges for small consumers of energy.
    Mr. Nelsonasked the Secretary of State for Energy whether any progress has been made in revising the structure of standing charges for small consumers of gas and electricity.
    Mr. Lawson: The nationalised gas and electricity industries are still considering my proposal that standing charges should represent no more than 50 per cent. of a domestic consumer's bill. Representations from individual members of the public are overwhelmingly in favour of the proposal. Meanwhile, the independent review of their standing charges commissioned by the industries is making good progress and I would expect the results to be published in the new year.
    Several Hon. Members rose—
    Mr. Speaker: Order. As the six hon. Members who tabled the questions that are being answered together are all Government Members, I propose to vary my usual custom and call an hon. Member from each side of the House in turn. Therefore, some hon. Members may have to wait.
    Mr. Moate: My right hon. Friend's answer confirms that there is extensive and widespread support for his efforts, but does he accept that there is an impression that the industries are dragging their feet? Is he getting proper co-operation, or is he being thwarted in his efforts?
    Mr. Lawson: There are some people in the industries who are not fully aware that this is a matter of elementary commercial common sense. There is a small but highly aggrieved sector of the population who feel strongly on this matter and the scheme would alleviate their anxiety. Over one-third of the letters that my Department receives on standing charges are on that relatively narrow point. However, the industries do have a fair point when they say that they would like to see the results of the independent reviews that I have mentioned before they come to a conclusion.
    Mr. Rowlands: Does that answer mean that we are not to have the 50 per cent. concession before the completion of the review for which the Minister promised to press the industries last week during questions on energy? Is he aware of the typical case of a constituent of mine, Mrs. Rees in Merthyr—[Interruption] who received a gas bill for £10, of which £9 was the standing charge? When does the right hon. Gentleman expect to have an answer to the 50 per cent. proposal that he has put forward? Will it be before Christmas or after?
    Mr. Lawson: The moving example that the hon. Gentleman has just adduced will assist in the process that I am seeking to push along.
    Mr. Greenway: When, finally, we hope, the industries agree to my right hon. Friend's excellent suggestion, will he endeavour to have it implemented from now? In particular, will he do all that he can to ensure that old-age pensioners eventually get full relief front standing charges?
    Mr. Lawson: My hon. Friend will be aware that the industries are responsible for their tariffs and I have no power to direct them. I have called upon them to make a modest change in their tariffs and I hope that in due time they will do so. To give all pensioners full relief would be a costly exercise and I do not think that the extra cost that would result to other consumers could be justified.
    Mr. John Smith: The Secretary of State complains that he has no power to direct the industries. He will be aware that there is an Energy Bill before the House at the moment. Why does he not table an amendment to give himself such powers?
    Mr. Lawson: The Energy Bill relates to the electricity supply industry, whereas this matter relates to electricity and gas.
    Mr. Aitken rose—
    Mr. Speaker: I shall call the hon. Gentleman after I have called other hon. Members whose questions are being answered.
    Mr. Warren: While I welcome my right hon. Friend's initiative, may I ask him to put strong pressure on the boards to respond, as discussions on standing charges have been going on for at least two years now? Will his Department try to agree, particularly with the gas and electricity boards, the nature of the standing charge calculation, on which there appear to be substantial errors at present?
    Mr. Lawson: I hope that the independent reviews that have been put in train by the industries at my request will settle the problem once and for all and that there will be no more errors, as my hon. Friend calls them. He is right to say that the standing charges have been a matter of concern for two years, if not longer, but the 50–50 proposal—if I may call it that—was put forward as recently as October this year.
    Mr. Penhaligon: If the Minister's proposals were implemented, what percentage of the customers of the electricity and gas boards would be helped for at least one-quarter of the year?
    Mr. Lawson: About 1 million electricity consumers and about 1 million gas consumers would be assisted by the proposals.
    Mr. Aitken: In view of the widespread concern among small consumers, particularly the elderly, will my right hon. Friend give some idea of how he attempts to define a "small consumer"?
    Mr. Lawson: Yes. The category can be simply defined by quoting people such as Mrs. Rees—I am not sure whether she is any relation of the right hon. Member for Leeds, South (Mr. Rees)—whose quarterly standing charge is greater than the charge for the units consumed.

    North Sea Gas Supplies
    Mr. Douglasasked the Secretary of State for Energy if he will make a statement on the level of gas supplies from the southern sector of the North Sea in the current year.
    Mr. Gray: Total gas production from the southern basin of the United Kingdom continental shelf in the first nine months of this year was approximately 19·5 billion cubic metres.
    Mr. Douglas: Will the Minister concede that in due time we shall have to import gas to offset the decline in the United Kingdom gas industry? What arrangements are being made with the Norwegians to use the United Kingdom as a land bridge, both to import, and probably to export, Norwegian gas in order to balance and reduce the dependence of Western Europe on Soviet gas?
    Mr. Gray: The hon. Gentleman will be aware that at present Britain imports approximately 20 per cent. of our gas requirement from Norway. It has already been suggested to the Norwegians that the United Kingdom might be used as a land bridge but so far they have not shown much enthusiasm for the proposal. However, the Government are endeavouring to ensure that there will be adequate supplies of gas by enacting the Oil and Gas (Enterprise) Act, which now makes it much more attractive for companies to explore for gas. With regard to the southern basin, no fewer than 38 gas blocks are on offer in the eighth licensing round.
    Mr. Eggar: Can my right hon. Friend confirm that British Gas is now predicting a serious shortfall in gas supplies in the late 1980s? Is that not directly due to the failure of British Gas over the years to give a decent price to southern producers?
    Mr. Gray: British Gas is making every effort to obtain gas purchases so that such a deficit will not be reached. It is best to leave pricing to British Gas. It is not something on which we can intervene.
    Mr. Eggar: No.

    Wind Power
    Mr. Tony Spellerasked the Secretary of State for Energy what potential there is for the development of wind power as a renewable source of energy.
    Mr. Mellor: The potential of wind energy is high. My Department is funding further research and development, including the construction of a large wind generator on Orkney.
    Mr. Speller: I thank my hon. Friend for that reply. If he revisits North Devon, may I suggest that he and his officers visit the Isle of Lundy, where, in the past month, an aerogenerator has been installed which creates enough power for the entire local load, with surplus capacity for the future? Does he agree that we should be planning both offshore and onshore aerogenerators in places where the wind blows regularly?
    Mr. Mellor: I am familiar with the 55kW aerogenerator on Lundy. I hope that it will be a success and that as a result of experiments throughout the country we shall be able to embark on a wider scale exploitation of wind power.

    Combined Heat and Power Schemes
    Mr. Rostasked the Secretary of State for Energy what steps he is taking to encourage the growth of industrial combined heat and power schemes.
    Mr. Mellor: The Energy Bill will positively encourage such schemes. It will remove legislative constraints and establish for the first time a statutory framework for fair dealings between the operators of these schemes and the public electricity supply industry.
    Mr. Rost: Will my hon. Friend confirm that much of industry is rightly complaining about uncompetitive energy prices and is now regarding the Energy Bill as a means of providing an alternative opportunity for producing their own heat and power more economically than by using existing nationalised industries? Will my

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    hon. Friend give more publicity to the opportunities that the Energy Bill will provide for fair competition in the private sector?
    Mr. Mellor: The Bill was embarked upon after careful consultation with various industries and their representatives. We have every reason to believe that there is a demand for the new regime created by the Bill and we shall give it all the publicity that we can.
    Mr. Hooley: Since the Secretary of State has taken an unusually intelligent decision not to proceed with the fast breeder reactor, is it not possible to divert funds from wasteful expenditure on nuclear methods to increased public support for combined heat and power?
    Mr. Mellor: I do not know where the hon. Gentleman gets his information from, but what he said about the Government's statement on fast breeder policy is an absolute travesty. The merits of CHP are clear and established and are not advanced by people using them as a stalking horse for anti-nuclear sentiment.

    Energy Consumption
    Mr. Hardyasked the Secretary of State for Energy what is his estimate of the total amount of energy consumed in the United Kingdom in the first six months of 1982, expressed in terms of tonnes of coal or coal equivalent; and how this compares with consumption in each of the three previous years.
    Mr. John Moore: United Kingdom energy consumption at 163 million tonnes of coal or coal equivalent in the first six months of 1982 was 0·7 per cent., 7·2 per cent. and 14·5 per cent. lower than in the corresponding periods of 1981, 1980, and 1979 respectively. I shall arrange for details to be published in the Official Report.
    Mr. Hardy: Does not that answer illustrate the serious nature of the problem that affects our energy industry? Is it not clear that the amputation of demand in Britain has created more problems than it has solved?
    Mr. Moore: The answer illustrates in part the impact and depth of the recession. The hon. Gentleman will be particularly interested, in view of his attitude to conservation, that it shows clearly that energy consumption per unit of industrial output fell by 10 per cent. in that period. All concerned with energy efficency will welcome that.
    Mr. Eggar: Does not the fall in energy consumption reinforce the need to ensure that the National Coal Board produces coal at competitive prices and continues in its determination to close uneconomic pits?
    Mr. Moore: It clearly shows, as has been said from both sides of the House many times, that if we are to achieve more markets for coal or any other fuel we have to be concerned about price competitiveness and security of supply. A key ingredient—[Interruption.] The right hon. Member for Lanarkshire, North (Mr. Smith) keeps interrupting from a sedentary position. I repeat to him that capital investment has been £4½ billion since "Plan for Coal". That is £1½ billion in excess of that anticipated for the period.
    The following are the details:
    14

    Total primary energy consumption

    January to June each year

    1979

    1980

    1981

    1982

    Million tonnes of coal or coal equivalent

    190·6

    175·7

    164·2

    163·0

    Index numbers, January to June 1982 = 100

    117

    108

    101

    100

    Table 1

    Total consumption by fuel, 1979 to 1982 (January to June) Primary fuels for energy use*

    January to June each year

    1979

    1980

    1981

    1982

    Million tonnes of coal or coal equivalent

    of which:

    Coal

    67·8

    64·9

    60·2

    58·2

    Petroleum

    74·3

    63·7

    56·1

    57·9

    Natural gas

    40·3

    39·3

    39·5

    38·4

    Nuclear electricity

    7·1

    6·9

    7·2

    7·3

    Hydro electricity

    1·1

    0·9

    1·2

    1·2

    Total

    190·6

    175·7

    164·2

    163·0

    Percentage shares (fuel equivalent basis)

    of which:

    Coal

    35·6

    36·9

    36·7

    35·7

    Petroleum

    39·0

    36·3

    34·2

    35·5

    Natural gas

    21·1

    22·4

    24·0

    23·6

    Nuclear electricity

    3·7

    3·9

    4·4

    4·5

    Hydro electricity

    0·6

    0·5

    0·7

    0·7

    Total

    100·0

    100·0

    100·0

    100·0

    Source: Energy Trends.

    * Including non-energy use of natural gas.

    Table 2

    Index numbers of consumption by fuel, 1979 to 1982 (January to June) Primary fuels for energy use*

    January to June 1982 = 100

    January to June each year

    1979

    1980

    1981

    1982

    Coal

    116

    112

    103

    100

    Petroleum

    128

    110

    97

    100

    Natural Gas

    105

    102

    103

    100

    Nuclear electricity

    97

    95

    99

    100

    Hydro electricity

    87

    72

    95

    100

    Total

    117

    108

    101

    100

    Source: Energy Trends.

    * Including non-energy use of natural gas.

    Table 3

    Final consumption by user, 1979 to 1982 (January to June) Thousand million therms (Heat supplied basis)

    January to June each year

    1979

    *1980

    1981

    1982

    Iron and steel industry

    2·6

    1·4

    1·6

    1·7

    Other industries

    9·7

    8·9

    7·5

    7·7

    Transport sector

    6·8

    6·9

    6·6

    6·8

    Domestic sector

    9·6

    8·8

    8·6

    8·6

    Other final users

    4·7

    4·1

    4·1

    4·1

    Total

    33·4

    30·1

    28·4

    28·9

    Source: Energy Trends.

    * Figures for the iron and steel industry were to some extent affected by the strike early in 1980.

    Alternative Energy Sources
    Mr. Knoxasked the Secretary of State for Energy whether he proposes to have discussions within the European Economic Community Council of Ministers about alternative sources of energy.
    Mr. Mellor: Yes, Sir.
    Mr. Knox: Does my hon. Friend agree that this sphere of research should be undertaken on a Community basis rather than on the basis of the present mixture of national and Community research?
    Mr. Mellor: I cannot agree with my hon. Friend. The interests of Community members in relation to renewables are different. When one looks in detail at the matters that are subject to Community programmes one realises that some renewables—geothermals for example—are of greater importance to Britain and are not as fully covered by the Community as Britain's interests demand.

    National Coal Board
    Mr. Dormandasked the Secretary of State for Energy when he next proposes to meet the chairman of the National Coal Board to discuss productivity in the industry.
    Mr. Canavanasked the Secretary of State for Energy what subjects he expects to discuss at his next meeting with representatives of the National Coal Board.
    Mr. John Moore: My right hon. Friend and I meet the chairman of the National Coal Board regularly and discuss all aspects of the board's business, including productivity.
    Mr. Dormand: Does the Minister agree that the miners have met every productivity target that they have been asked to meet since "Plan for Coal"? What does the Minister have to say about the disgraceful remarks made by the director of the CBI about the miners affecting the economy so badly?
    Mr. Moore: I do not think that anyone on the Government side of the House has a more consistent record than I in arguing for the mining industry, when that is merited. We all wish to argue on the basis of fact. Until the last two and half years the productivity increments expected under "Plan for Coal" had not occurred. That is fact. We all welcome the current increased productivity. Equally, we all understand the difficulties through which the coal industry is passing. None of us wishes to underestimate those difficulties or to give an incorrect slant to the facts, as some outside the House might.
    Mr. Canavan: Will the Minister warn the NCB that it would be a recipe for all-out industrial action if the NCB tried to force the closure of pits with workable coal reserves? I refer to Scottish pits such as Cardowan, where over 1,100 people are employed and which is on the NCB hit list. Do the Government seriously want a repetition of the 1974 confrontation which led to the ignominious defeat of the Tory Government?
    Mr. Moore: As the NCB has made clear, there is no hit list. The hon. Gentleman's language does not assist the coal industry in trying, in the face of extremely difficult conditions, to develop markets for today and the future. The Government are not in the business of warning any side of the coal industry. The coal industry knows the
    16
    difficulties and will make decisions rationally. Governments do not have the ability to determine the future of individual pits, let alone decide on the engineering availability of coal in any pit in Scotland.

    Fast Breeder Reactor (Programme)
    Mr. Maclennanasked the Secretary of State for Energy if he will set out the terms of reference for the discussions between the chairman of the Atomic Energy Authority and the chairmen of the generating boards on the programme for the fast breeder reactor.
    Mr. John Moore: As my right hon. Friend has already informed the House, the chairman of the Atomic Energy Authority has been invited, in consultation with the generating boards, British Nuclear Fuels Ltd., and the National Nuclear Corporation, to draw up a fast breeder reactor development programme which makes the best use of our resources and experience.
    Mr. Maclennan: What conditions has the Minister attached to the study? In particular, can he say whether the plans are contingent upon the participation of other countries? Is the domestic industry free to produce its own proposals?
    Mr. Moore: To the extent that the domestic groups to which I have referred have been asked to draw up plans, the Government have said publicly that in the world of fast breeder reactors they would welcome the possibility and prospect of international co-operation. Equally, it has not been made a pre-condition, because obviously it might restrict the organisations in developing proper plans for our country.
    Mr. Rost: Will the Minister confirm that one of the main objectives of the study is to simplify the design so that the cost of the fast breeder reactor can be brought within the realms of economic possibility?
    Mr. Moore: It would be premature to deal with points such as those that my hon. Friend has just made. We wish to secure the best fast breeder development programme for our country.
    Mr. John Smith: Is the Minister aware of the anxiety, not just in the locality of this fast breeder reactor, but over a more widespread area, that there is a possibility of a slowing down in the programme? Will he confirm that the Government will not put any obstacles in the way and ensure that the fast breeder programme continues actively?
    Mr. Moore: I have difficulty in understanding the right hon. Gentleman's comments, because anxiety was expressed during the period of the review. However, I see from the local press that the director of Dounreay, the chairman of the Dounreay action council, the industrial head of the Highlands and Islands Development Board and the chairman of Caithness district council were pleased with the announcement. It seems to me that the fact that all those in the area who were legitimately worried during the process of the review have been reassured is crucial for the future of the programme.

    Electricity Prices
    Sir Geoffrey Johnson Smithasked the Secretary of State for Energy when he last met the chairman of the Central Electricity Generating Board to discuss electricity prices.
    Mr. Lawson: I am in regular contact with the chairman of the CEGB on all matters of mutual interest.
    Sir Geoffrey Johnson Smith: When my right hon. Friend meets the chairman, will he thrash out the question of prices so that the small minority of intensive users can have a better deal? May I remind my right hon. Friend that he earlier said that they are not getting electricity at internationally competitive prices? If neither my right hon. Friend nor the chairman can do anything, will they prevail on someone else in the Government to take action, as those users are a crucial part of British industry?
    Mr. Lawson: I recognise my hon. Friend's anxiety, which he has voiced on a number of occasions. The Government have already done a great deal. I mentioned the £100 million contracted consumer load scheme announced in this year's Budget and I have made it clear, that, with the industry's agreement, there will be a standstill on electricity prices next year. In real terms they will fall for everyone. That is of great benefit. Over one half of the £500 million benefit will go to industry. Certain countries subsidise consumers in various circumstances, but I am sure that my hon. Friend would not suggest that we equal every subsidy given. If that is what he is suggesting, how does he suggest that we pay for it?
    Mr. Moate: If my right hon. Friend agrees that the key to electricity prices is the competitive position of coal, what is the economic logic of the National Coal Board exporting coal to the Continent at prices below those available to United Kingdom customers?
    Mr. Lawson: I believe that my hon. Friend is referring to one particular contract with France. The National Coal Board is doing everything that it can to make the industry more efficient and bring down the cost of coal. That will help British industry and the nation, and I hope that it will command the support of both sides of the House.

  HOUSE OF COMMONS

    Accommodation
    Mr. Dormandasked the Lord President of the Council if he will make a statement on the progress being made in providing improved office accommodation for hon. Members.
    Mr. Dubsasked the Lord President of the Council if he has any proposals to improve the working conditions of hon. Members.
    Mr. Canavanasked the Lord President of the Council what representations he has received about the adequacy of accommodation for hon. Members in the House.
    The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen): The matter of hon. Members' accommodation has been raised with me by a number of hon. Members.
    The Accommodation and Administration Sub-Committee of the Services Committee is currently considering the use that the House might make of refurbished premises fronting Parliament Street, between Derby Gate and Bridge Street, to the west of Cannon Row. A report will be made to the House as soon as practicable on this proposed development and on the possibility of developing the remainder of the Bridge Street site.
    Mr. Dormand: Is the right hon. Gentleman aware of the Opposition's anxiety over the lack of progress on this? Can the right hon. Gentleman confirm that the offices in Parliament Street and Bridge Street will not be available for another five years? Does he accept that the efficiency of hon. Members is affected by their working conditions, which would not be tolerated outside this place?
    Mr. Biffen: The extent to which our working effectiveness is governed by the accommodation available is a subject for argument in the House. I am advised that the buildings should be available, if the plan is confirmed by the House, in 1987–88. I can confirm that progress has been made in the consideration of phase 1 of the site. Evidence should be published before Christmas.
    Mr. Dubs: Is the right hon. Gentleman aware that people who know about our working conditions are appalled by them and believe that it is our own fault that we have made no progress? Does the right hon. Gentleman recall that three years ago proposals were made for a new building on the other side of the road, but nothing has happened? More rapid progress is required.
    Mr. Biffen: The work undertaken by the Accommodation and Administration Sub-Committee of the Services Committee deserves the praise of the House. It is proceeding in circumstances where its decisions by no means have the unanimous approval of the Chamber; in fact, quite the opposite. As to the hon. Member's first point, I was not aware that the public were appalled at the working conditions of hon. Members. I believe that they are much more appalled at the luxury of other public offices.
    Mr. Canavan: How much longer will we have to tolerate the position where some hon. Members have to share cramped office space, about the size of an average bathroom, while Members of the other place have nice big, spacious, luxurious offices to themselves at the other end of the same building? Is that not another argument for supporting Labour Party policy to abolish the other place so that the office accommodation at the other end of the building can be put to better use by the elected representatives of the people?
    Mr. Biffen: I realise that the case for the abolition of the other place becomes a little threadbare as it is debated ahead of the general election. I shall give the hon. Gentleman whatever argument he chooses to reinforce it.
    Sir Geoffrey Johnson Smith: Is my right hon. Friend the Leader of the House aware that we are coming to the end of information technology year? When he looks at the present office accommodation will he consider what steps might be taken so that we can use some of the excellent technology and probably save a little on research assistants, of whom some people might think there are too many?
    Mr. Biffen: I note what my hon. Friend says about the extent to which the House now enjoys the services of research assistants. With regard to the general issue of information technology, the use to which the Parliament Street site might be put, is one of the factors that will engage the attention of the Administration Committee.
    Mr. John Wells: Is my right hon. Friend aware that every time there is an improvement in accommodation for hon. Members attendance in the Chamber declines? Is he

    19
    further aware that since the abolition of counts it is normal for there to be about 30 Members on the Government Benches and 12 Members on the Opposition Benches and nobody else, even during major debates? Therefore, will my right hon. Friend think long and coolly before he further discourages hon. Members from coming to the Chamber?
    Mr. Biffen: I note what my hon. Friend has said. Other than the allocation of funds, those are not matters for my determination or the Government's. They are matters for the House. I am certain that when the House comes to resolve those matters it will take into account the overwhelming necessity to ensure that the Chamber remains at the heart of Parliament's acts and deliberations.
    Mr. Straw: While I do not depart from, or disagree with, what the Leader of the House has said, may I ask whether he is aware that hon. Members on both sides of the House are accommodated in appalling conditions in the Cloisters downstairs, with 14 hon. Members sharing a corridor room? The room that I share is an elegant Gothic slum, which is so small that we cannot get to the bookcase because of the filing cabinet and we cannot get to the filing cabinet because there is a desk in the way. Will the Lord President say that the allocation of funds, over which he has responsibility, is something that he will treat with a great deal more urgency? Will he announce an allocation of funds so that the new building across the road can be brought into use long before 1987 or 1988?
    Mr. Biffen: I preface my remarks by saying that my hon. Friend the Member for Rutland and Stamford (Mr. Lewis), whom I do not see in this place, will confirm that for about 10 years I had a desk in the Cloisters, and I found it an admirable working place. If it has degenerated into a slum, I can only solemnly reflect upon what ill-fortune has befallen it since I left. The hon. Gentleman will realise that the funding of the proposition would become part of the PESC programme, with which the Treasury is involved. Doubtless the representations of the House, after it has considered phase 1 of the Parliament Street site, will be taken into account in the implementation of the PESC programme.
    Mr. Stokes: Despite all that we have heard, does my right hon. Friend agree that it is a great privilege to be here and that our work cannot be compared with any other occupation? Is it not therefore somewhat unseemly to have these continual complaints from the Opposition?
    Mr. Biffen: The arguments that concern us are not merely advanced by the Opposition. It is properly a House of Commons affair. I agree with my hon. Friend that to serve in this building and Parliament is one of the greatest privileges that one can acquire. Although working
    20
    conditions are obviously important, none the less they are, if not subsidiary, complementary to the main role of speaking for one's constituents in the Chamber.
    Mr. Hooley: Does not the Leader of the House think that there is some mild element of humbug and hypocrisy in the attitude of Ministers, who enjoy adequate accommodation and staff, yet treat with urbane contempt Back Benchers' requests for similar facilities?
    Mr. Biffen: I believe that I would be advancing exactly the same arguments if I were sitting on the Back Benches as I advance from the Dispatch Box. My judgment will not determine the matter. It is a matter for the House itself.

    Northern Ireland Committee
    Sir John Biggs-Davisonasked the Lord President of the Council whether, in view of the competence of the Northern Ireland Assembly to consider and comment on certain proposed legislation and draft Orders in Council, he will make a statement about the policy of Her Majesty's Government on reference of matters to the Northern Ireland Committee of this House.
    Mr. Biffen: I do not envisage any changes in existing arrangements, pending devolution of powers to the Northern Ireland Assembly.
    Sir John Biggs-Davison: Is my right hon. Friend aware that when the Northern Ireland Assembly was preparing to debate security, for which it has no responsibility, the Northern Ireland Committee of this House was permitted to discuss what a dog licence should cost in Northern Ireland? Does my right hon. Friend think that the matter was properly thought out when the policy of the Northern Ireland Act 1982 was laid before the House?
    Mr. Biffen: I gained the impression that some of the Northern Ireland Members were anxious that the Draft Dogs (Northern Ireland) Order 1982 should be considered by the Northern Ireland Committee of the House. Whether the Northern Ireland Committee could also consider matters of security must, I imagine, be a matter for representation in the normal way.
    Mr. J. Enoch Powell: Will the right hon. Gentleman confirm that nothing so far done under the Northern Ireland Act 1982 has reduced the responsibility for legislation, constituents or general policy, of hon. Members representing Northern Ireland constituencies?
    Mr. Biffen: Certainly that is my understanding in relation to the operation of the Northern Ireland Committee, which is the subject of the question.

Command War Headquarters
3.32 pm
Mr. Michael Meacher: 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 proposal to site the United States European command war headquarters in the United Kingdom, whether at High Wycombe or elsewhere, when it has never been openly discussed or debated in the House".
This is a proposal of the utmost gravity. It raises questions of life and death for every man, woman and child in the country, yet the nation learnt of it only as a result of a newspaper exposé. Hon Members on both sides of the House are anxious that matters of vital national interest should not be dealt with behind Parliament's back. It is by chance that the matter has come to light before a decision has been taken.
The matter is specific and crucial. The acquisition of a European command war headquarters exposes our people to the much greater likelihood of a pre-emptive nuclear strike in the event of hostilities anywhere in the region of Europe. Our entanglement in a nuclear war through a possible American confrontation elsewhere, over which we would have had no control, is of supreme importance to all our citizens. It has been estimated that our involvement in a nuclear war would cause the death of four out of every five of our citizens.
The matter is urgent. It is clear from the confirmation of the report by a Minister in the Ministry of Defence that the matter has been under consideration for a considerable time and that a decision is imminent—if it has not already been taken. It is a vital decision, affecting millions of our people, and should not be taken behind closed doors.
Mr. Speaker: The hon. Member for Oldham, West (Mr. Meacher) gave me notice before 12 o'clock midday that he would seek leave to move the Adjournment of the House under Standing Order No. 9, for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the proposal to site the United States European command war headquarters in the United Kingdom, whether at High Wycombe or elsewhere, when it has never been openly discussed or debated in the House".
As the House is well aware, I do not decide whether an important matter is to be discussed; the decision is in other people's hands. I am directed to take into account the several factors set out in the order but to give no reasons for my decisions in reply to requests for emergency debates.
I listened carefully to the hon. Gentleman, as the House did, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit it to the House.

Private Members' Business
3.36 pm
Mr. Leo Abse: On a point of order, Mr. Speaker. I wish to raise two matters following the debate on Friday.
First, those of us who are exceedingly jealous of the time accorded to private Members are particularly anxious about the manner in which the debate was conducted, because it had the effect of impinging on the opportunities for hon. Members to speak. Under the terms of the motion, the debate involved the relationship of this country with other countries. The Minister chose to speak early in the debate and he did so for about an hour. Although hon. Members were still waiting to speak, Mr. Deputy Speaker later chose to call the junior Minister to speak as well, so that on a private Member's day the Government hijacked one hour and 20 minutes of debating time. It would be an unhappy precedent if it led to a similar occurance again in private Member's time, unless there were compelling reasons.
Secondly, it was not a regional debate but affected all hon. Members. Out of 635 hon. Members, only 12, or 1·9 per cent., represent Northern Ireland. As long as we continue to rule Northern Ireland from this Parliament, hon. Members representing Scotland and Wales should not be under the grave disadvantage of being treated as they were on Friday, when far more hon. Members for Northern Ireland were called than were called from the rest of the United Kingdom.
As it is likely that we shall continue to rule Northern Ireland from this Parliament for some time, the status of the Chamber should not be diminished by being used as a Northern Ireland Assembly whenever we have a Northern Ireland debate. In future, would it be possible for the Chair to guide the House and restrain speakers so that Back Benchers are not deprived of the opportunity to speak in a debate that is important to us all?
Mr. K. Harvey Proctor: Further to that point of order, Mr. Speaker. I, too, was in the Chamber for the five hours on Friday and was not called to speak. I might have been disappointed about that, but I support the Chair's decision. I found the debate interesting and was pleased to hear the wide views from hon. Members from Northern Ireland and elsewhere.
Mr. Speaker: Order. It is unusual for the Government to take one and a half hours in private Members' time, and it is a little unusual for a Minister to speak for 23 minutes after the Government have spent an hour in opening, but it was an unusual debate.
Secondly, the speeches on Friday were exceptionally long. I have a list of those speeches. The shortest—I shall not give the name of the hon. Member who made it—was 16 minutes long and the others were in the realm of the high twenties, and even 37 minutes on one occasion. I shall not give the names of the hon. Members who made those speeches either.
It is true that the subject being discussed during a Northern Ireland debate is a matter for the whole House, but I believe that priority is bound to be given to those hon. Members who are sent here by the electors of Northern Ireland when we are discussing what is primarily their major consideration.

23
I am sorry that the hon. Member for Pontypool (Mr. Abse) sat here all day and was not called. It is the gravest problem for whoever occupies the Chair when that type of thing happens.

Nuclear Weapons
3.41 pm
Mr. Frank Allaun: On a point of order, Mr. Speaker. The application of my hon. Friend the Member for Oldham, West (Mr. Meacher) for a debate under Standing Order No. 9 has been turned down, and I do not intend or wish to repeat his argument, but you will be aware that on several occasions in the past 37 years decisions have been taken on nuclear weapons without the British people being told. As the Government Chief Whip is present, may I ask you to ask him to arrange a debate on this subject so that recent experience will not be repeated in the immediate future?
Mr. Speaker: The Government Chief Whip is usually characterised by his silence in the Chamber. I am afraid that the hon. Gentleman's point of order is not one that I can answer.

BILL PRESENTED
  TRAVEL CONCESSIONS FOR THE UNEMPLOYED (No. 2)
  Mr. Alfred Morris, supported by Mr. Charles R. Morris, Mr. Lewis Carter-Jones, Mr. Andrew F. Bennett, Mr. Stanley Orme, Mr. Frank R. White, Mr. Gerald Kaufman, Mr. George Morton, Mr. Tom Pendry, Mr. Robert Litherland, Mr. Ken Eastham and Mr. John Evans, presented a Bill to provide for the extension of travel concessions to registered unemployed persons and persons working under the youth opportunities programme: 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 43.]

Statutory Instruments
Mr. Speaker: By leave of the House, I shall put together the Questions on the two motions relating to draft statutory instruments.
Ordered,
That the draft Oil Taxation (Gas Banking Schemes) (No. 2) Regulations 1982 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Unfair Dismissal (Increase of Compensation Limit) (No. 2) Order 1982 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Boscawen.]

Ordered,
That the Currency Bill be referred to a Second Reading Committee.—[Mr. Boscawen.]

Ordered,
That the Civil Aviation (Eurocontrol) Bill be referred to a Second Reading Committee.—[Mr. Boscawen.]

Tenants' Rights
3.42 pm
Mr. Doug Hoyle: I beg to move,
That this House expresses its disgust at the appalling treatment by this Government of tenants, public and private, and calls upon it to accord these citizens equal treatment with private owners of property in order to remedy the injustices which the Government is imposing upon them.
The motion refers to a substantial number of people—about 44 per cent. of the population. I am asking that they be accorded the equal treatment that they were promised by the Prime Minister on the steps of No. 10 Downing Street when the Government came to office. The Prime Minister quoted St. Francis of Assisi. She said:
"Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith and where there is despair, may we bring hope."
That message has a hollow ring to tenants, whether they be in the private or the public sector. It does not have that ring only to tenants, but I shall deal with the plight in which they find themselves under the present Government.
Rents paid by council tenants have in many cases more than doubled in the past three years and the subsidies that they have been given have been reduced. In 1978–79 the subsidy given by the Government was £1,004 million and the rate fund contribution was £200 million, yielding a total of £1,204 million. In 1980 the Government subsidy had decreased to £915 million, the rate fund contribution was £362 million, which made a total, at 1978–79 prices, of £865 million.
The planned figures for 1982–83 are even worse. The Government subsidy is to slump to £592 million and the rate fund contribution is to be £325 million, producing a total of £917 million. At 1978–79 prices, that £917 million is only £578 million. Therefore, the planned subsidy for 1982–83 is less than 50 per cent. of what was given in 1978–79. It means that the future of private tenants is bleak. It also means that they are being punished, when they are already suffering. Because of the Government's economic policies, many of them have lost their jobs. They are distressed and finding things extremely difficult.
Moreover, tenants are finding that local authorities are spending less on essential repairs. The housing stock will fall increasingly into despair as a direct consequence of the Government's policies. There is another facet of the problem. It used to be the case that young couples who got married could look forward to becoming tenants of a council house. Those who live in a community that calls itself civilised have a right to decent housing. They also have a right to expect either facilities to purchase a house or rented property to be available.
We know from long experience that, irrespective of what is done in the private sector, the quantity of rented property is decreasing, but under successive Governments it has always been possible to obtain a council house for rent. That applied under previous Tory Administrations, but they were nothing like the present one. The facility to obtain council houses for rent is being removed rapidly.
I shall quote the figures for local government starts and completions that have been given to me. In 1978 there were 79,517 starts and 101,877 completions. In 1979 there were 58,424 starts and 79,005 completions. In 1980 starts slumped dramatically to 37,492 and there were 79,896 completions. In 1981 starts had slumped again to 26,399
26
and there were 58,101 completions. The figures are even worse this year. In the first six months of 1982 there were 17,649 starts and 17,726 completions.
All that has occurred under a Secretary of State who, when in Opposition, repeatedly castigated the Labour Government for their building programme. The right hon. Gentleman was was fond of saying how disgraceful it was and how, when the Tories came to office, that sad state of affairs would be remedied. In reality, things are very different from what the Secretary of State for the Environment suggested. In the first six months of this year starts numbered only 17,649 and completions 17,726. If this continues, at the end of the year these will total 38,000 and 36,000 respectively.
When I talk of tenants in privately rented accommodation, I am talking of 44 per cent. of the population, or 9 million people. The vast majority of them will be unable to get a home of their own. The Government should be condemned, not only for their record but for their lack of interest in what has occurred in the housing sector.
It is disgraceful that many young people will have no opportunity to get a home. As a result, they will be forced into overcrowded accommodation or pushed into housing which, in many instances, is a disgrace. Such a state of affairs should not be allowed to exist. A remedy is needed, but the Government show no sign that they are taking any notice of what is happening.
The Tory Opposition used to tell us that they would find more privately rented property and strengthen the rights of private tenants. They used to say that they would become the friends of people in privately rented accommodation. The Secretary of State used to say that the Tories would tap the reservoir of empty private property and make it available. In reality, things are quite different.
As a result of the Housing Act 1980, housing is in many cases more expensive for private tenants. By that Act the Government reduced the minimum period for rent registration from three years to two years which means that landlords can have so-called fair rents reviewed every two years instead of three. It also means that instead of being spread over a three-year period, the fully registered rent becomes operative after two years, and that will lead to an escalation in the level of private sector rents.
A nasty shorthold tenancy provision was also introduced by the Minister for Housing and Construction and applied to lettings after November 1980. Under that provision a landlord can charge any rent and the terms of the letting can vary from one to five years. When we debated this matter we warned the Government that they were making a big mistake, because there was no requirement for compulsory rent registration.
The Government argued "Well, if the tenant so desires, he can always go to the rent officer". That is like telling a man armed with a peashooter that he can attack an army battalion armed with the most modern weapons. Nothing could be more suicidal, because if that tenant went to the rent officer he would more often than not be out on the street within six or seven months.
I am talking about some of the most defenceless people in our society. I am talking about young married couples who are unable to get local authority accommodation and who are desperate for any kind of accommodation. They will fall into the trap set by the sort of unscrupulous landlord about whom I am talking.
Students are equally affected but are not in a strong bargaining position. They will be forced to accept such

27
accommodation, as will people who have moved to obtain a job. Nowadays, people must be increasingly mobile and must travel the length and breadth of the country to find a job. When they do find a job, it is often extremely difficult to get accommodation. It may even be years before they can be reunited with their wives or families. They are likely to be caught in the snare that has been set by an unscrupulous landlord.
The game was given away when it was discovered that this provision did not apply to the London area, but even so it has not resulted in the availability of more property. Instead, it has allowed some unscrupulous landlords to make a killing. It has been a bad deal for the private tenant, yet the Government have allowed such things to occur.
Another difficulty faced by private tenants is the time taken by landlords to carry out repairs, even though many of the properties are in a shocking and disgraceful state. Even when private tenants have security of tenure, it is a long time before the necessary repairs are carried out. All hon. Members are aware of the frustration that results. We have all received letters about that or have met constituents who have told us about the conditions in which they must live. Many of them do not even know the name of the landlord, because their rent is collected by a nominee. However, they do know that it takes a long time for the local authority to obtain the necessary orders so that action can be taken.
As a result, frustration and despair occur and such people have a lack of pride in their home, simply because their basic needs have not been met. In my constituency there are still many private properties with no hot water or inside toilet. The same can be said of many other areas. Alternatively, many flats are in such a state of disrepair that they ought to be condemned immediately. Instead, it is a long time before any action is taken by the local authorities. That is the sort of frustration experienced by private tenants, and I am sure that all hon. Members have at some stage been approached by tenants in that predicament.
In many local authority areas, repairs that would normally be carried out fairly speedily are not being done because funds are not available. Some repairs are held up because of bureaucratic mismanagement or red tape. One of my constituents suffered a burst pipe in his kitchen during last year's severe winter. He reported it to the local authority, which tried to repair it but found that the stopcock in the kitchen would not close. The authority then asked the water authority to turn off the stopcock on the main outside, but it could not find the stopcock. That repair has still not been completed and my constituent has to put out a bowl overnight to catch the water that is still leaking in. Such frustration is unnecessary, even taking into account the backlog of essential repairs that have been held up because of cuts.
I know that I speak for many hon. Members when I say that my post-bag is full of queries about repairs that have not been carried out. Many people come to my surgery asking whether something can be done to speed up repairs. Sometimes they do not know what is happening. They may have reported the fault to the local authority through, for example, the rent collector.
Mr. John Cartwright: In many constituencies there are no rent collectors. All repairs
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required are fed into a computer. The computer is not swift to respond to demands for action and the position becomes even more impersonal.
Mr. Hoyle: I accept what the hon. Member for Woolwich, East (Mr. Cartwright) says. A computer is only as good as the information fed into it. However good the local authority, the information is fed in by faceless bureaucrats and the tenant cannot obtain an answer. In many cases there is no human contact.
I hope that the Government will accept the amendment in the name of my hon. Friend the Member for Bolton, West (Mrs. Taylor) to the Housing and Building Control Bill, which calls for a tenants' charter. That may begin to solve the problems that I have outlined. A tenant who reports a fault to either a private landlord or a local authority could, after a reasonable period had elapsed and the necessary repair had not been carried out, obtain three estimates from an approved list of builders held by the local authority. To provide a fair comparison, one builder would be the direct labour organisation of the local authority. The tenant must accept one of the three estimates, call in the builder to carry out the repairs and then send the bill to the local authority or the private landlord for payment. In that way we might overcome the difficulties that I have outlined and the difficulties with computers. It would certainly reduce the delay and the frustration of tenants.
The period meant by "reasonable" would vary according to the repairs. About four weeks would be long enough to wait for a new gate, window or door. For structural repairs, tenants must wait much longer before action is taken. However, those details can be filled in later. We must overcome the menace of the bad landlord in the private sector. In the charter that I have outlined, the good private landlord has nothing to fear. Good local authorities which are prepared to keep in touch with tenants and to ensure that repairs are carried out will have nothing to fear. But the bad local authority, where there is much red tape, frustration and bureaucracy—
Sir Albert Costain: Is the hon. Gentleman trying to persuade the House that there are never bad tenants but only bad landlords?
Mr. Hoyle: The hon. Gentleman knows that I would never say that. There are bad tenants, just as there are bad landlords, but at the moment most of the frustrated tenants are good tenants. They take a pride in their property and wish to see it kept in good repair. We wish to deal with the bad landlord who will not carry out repairs, and the absentee landlord who may be unknown to his tenants. Tenants are frustrated by "get rich quick" landlords who will not carry out repairs.
The charter that I have outlined would bring much relief, end frustration and begin to improve housing standards. The Government must consider such an amendment favourably. Most repairs begin as small repairs, but the longer they are left the larger they become and the more they cost to carry out.
In the Housing Act 1980 provision was made for the establishment of a charter for tenants. Welcome though it was, it was a watered down version of what would have been in Labour's 1979 Housing Bill. Tenants feel great frustration. They are often unaware of the general direction of the local authority's housing policy. Often they are not consulted about decisions. Although the

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measure made provision for participation, that should now be taken a stage further. There should be real participation, so that people are aware of what is happening. They should be free to partake in the making of decisions. It would give them a pride in the estate or area in which they live.
In addition to meaningful participation, there should be a growth of tenants' co-operatives. One or two have been established, but I should like to see the establishment of self-managing co-operatives in which tenants can play a positive role in management. That would do much to solve the problems which occur on many estates where there are rundown houses and much frustration.
Sometimes vandalism occurs because of tenants' frustration with what they find round about them. However hard they strive, they are unaware of what is happening. They feel that they are not in touch with the people on the councils. The position was not helped by the reorganisation of local government, because people felt more and more divorced from what was happening in the local authority. Although many councillors try hard to keep closely in touch with tenants, there is still a need for a positive role for tenants in the management of their estates. There should also be decentralisation so that decisions are taken as near as possible to the estates.
Tenants now find themselves in a more difficult position in relation to owner-occupiers. I say at once that I believe in help being given to owner-occupiers. Everything possible should be done to help young married couples who want to own a house of their own. However, whatever scheme is devised, there will always be some people who cannot afford a house of their own and will have to seek property in the rented sector.
The wealthier the owner-occupier, the better his position in relation to tax exemption and grants, but the ordinary private tenant who has been protected by legislation that keeps the rent of the property below the true market cost is finding that his protection is being slightly nibbled away. Council tenants are also finding that subsidies are being phased out. Council house rents have doubled in the last three years and are likely to increase in the future. That is unfair, particularly to the section of the community least able to defend itself.
There should be a general social subsidy on housing which tries to provide equity between owner-occupiers, council tenants and those in the private rented sector. Housing should be regarded as a social service. Good housing ought to be available to all. That is not possible at present, because of the Government's housing policies. They are obsessed by political dogma which leads them to believe that the best solution is for everyone to own his own house. The dream of a free market economy that would give everyone the best of all possible worlds is an impossible dream. It is unrelated to reality. There is a demand, and always will be, for rented property. There should be a subsidy, but it should be a general subsidy on all housing.
I hope that the Minister will take a leaf out of the housing programme outlined at the last Labour Party conference. Relief should be given to those who are most hard pressed. There should be a statutory one-year rent freeze. It should apply not only to council tenants but to the private rented sector and to housing associations. That would help to provide equity between each sector. In the longer term we should look at the rented sector as a whole and bring the housing associations and private rented property more into line with local authority housing.
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I referred earlier to the mortgage relief that is given to the owner-occupier and said that I was strongly in favour of it, but I am not in favour of benefiting the very wealthy in our society in that respect. The cut-off should be at the standard rate of income tax. That is where help can be given to most people. While benefiting the greatest possible number, it would prevent benefit going to very wealthy people. The tax relief should be altered so that it acts in the same way as the mortgage option scheme—in other words, like a subsidy. That is one of the ways in which we could begin to move towards equity.
The Government are mistaken if they think that they can somehow wave a wand and prevent any further diminution in the private rented sector. They often say that the private rented sector diminished under the Labour Government, but it is diminishing even while the Tories are in office. That decline is irreversible. The Labour Government were moving in the right direction. The next Labour Government should move in a similar direction. They should, by every means available, actively encourage the transfer of the private rented sector into the public sector. As far as possible the private rented sector should become public. That is the only way in which we can ensure that there will be a fair deal for tenants.
Housing problems in inner cities, far from getting better, are getting worse. Problems have been caused by high-rise flats. There have been defects in the structure of flats that were built in the post-war period. Problems have been caused because successive Governments believed that high-rise flats should be built because there was a shortage of land. However, those flats separated people from their neighbours and broke up the community spirit that used to exist in inner city areas. People feel a sense of frustration because they are isolated. There is also the problem of the rundown of inner city areas. Things are not getting better in those sectors, but worse.
The answer to those problems is not to send in a blaze of glory, as if he were Messiah coming down to earth, the Secretary of State for the Environment. In Liverpool he came, he saw and he proposed, but the problems remain. The planting of a few trees in the centre of Liverpool is not the answer to the problems there. The problems in Liverpool, which were largely the result of a lack of employment, decent housing and education facilities, are still there. In many inner cities there are racial problems. There could be an eruption at any time unless a major effort is made to solve the problems.
The problems are partly caused by a lack of housing. What we are saying about Liverpool applies to other inner city areas as well. In Liverpool there should be an investment of a large sum of money to provide decent housing, to give people a sense of belonging and to rekindle the community spirit, which is absolutely essential if we are to combat the growing vandalism and sense of frustration and suspicion, particularly between the races. The Government must rethink their policy.
The Government will not solve the problems by having a free market economy or by making appeals, however well-meaning, to the City to bring people in black coats and pin-striped trousers to Liverpool and other cities to make proposals. They will not begin to touch the problems by doing that. Many of the problems in such areas are tenants' problems. The Government need more imagination. Money must be put into those areas. The problems can be resolved only within the public sector. The money that is put in must be in the hands of the local authority.

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It must be used in such a way that the people in the communities are involved in a partnership, so that the problems can begin to be solved.
The Government treat housing, as they do many other things, dogmatically. They look at it in a narrow political sense, as if all the answers can be found through the market solution. For housing, that is not true. More imagination and flair are needed. Their policy should have a new look about it.
The debate will be invaluable if the frustration of tenants, both council and private sector, is brought home to the Government. I hope that the Minister will give a sign that the Government are not only aware of those things but have a more radical plan for beginning to tackle the problems, which will not go away, but will become worse. The time to begin to solve many of them is growing short. I ask the Government to listen to the comments of those who take part in the debate. Many hon. Members will describe the problems faced by tenants. Whatever solution they propose, they will probably agree that it will take more than the £109 million that the Minister for Housing and Construction proposed last week to begin to solve the problems.
If the will is there, the problems can be solved. If the money was made available, employment would be provided in the construction industry, which is one of the most hard-pressed industries in the country and which has one of the highest unemployment rates of any industry. By making the money available the Government would bring not only employment but satisfaction to a deserving section of the community—the 44 per cent. of the community who are tenants. I appeal to the Government to do something to help them before their frustration boils over.
4.26 pm
Sir Albert Costain: We have just listened to a speech on housing of almost one hour. The only suggestion of the hon. Member for Warrington (Mr. Hoyle) to solve the problem is that basically housing should be nationalised and taken over by local authorities. To give him his due, he has criticised local authorities and the way in which they have managed housing, but he still thinks that nationalisation is the solution.
I should like to ask the hon. Gentleman one or two questions. Will he give me any reason why houses are in short supply at present other than that they are rationed and controlled? Can he tell me of any other commodity than housing that is in short supply? Does he realise that housing is rationed and controlled?
I do not know where the hon. Gentleman lives. He did not declare an interest. He did not say whether he was a tenant or a landlord. My impression is that he lives in Dolphin Square. I thought that I saw him there. I may be wrong.
Mr. Hoyle: The hon. Gentleman is wrong.
Sir Albert Costain: The hon. Gentleman was probably going swimming there. I did see him there, but I shall not press him.
Dolphin Square is a perfect example of a block of flats that was built by private enterprise for private tenants. It
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has been a great success. If my records are right, there have always been at least 40 Members of Parliament living there since the day it was built.
Mr. Hoyle: To say that the conditions in Dolphin Square exist throughout the private sector would be to talk about a different world. The hon. Gentleman knows as well as I do that the reality is different. Many landlords are not prepared to keep their property in good repair. I was addressing my remarks to tenants in such circumstances.
Sir Albert Costain: The hon. Gentleman is kind enough to say that I know as much about housing as he does. I suggest that I know a darned sight more. The company with which I was connected built tens of thousands of fiats. It would undertake developments such as Dolphin Square time and time again if it were not for rent restrictions. Before rent restrictions were introduced, which was during the First World War, most pension funds invested in private rented accommodation. The unions were only too happy to invest their funds in housing to let for their members and others. In other European countries where there are no controls private rented accommodation is being built to the great advantage of all.
Every proposal that Labour Governments and Oppositions make is designed to stop housing being built for rent. This stops the provision of badly needed accommodation. My solution to the housing problem would be aimed precisely in the opposite direction. Rent restrictions should be removed immediately in any area where the supply of houses exceeded demand. The Government have given many concessions in their enterprise areas, but I am disappointed that when houses are built to let they are still controlled.
The hon. Member for Warrington referred to shorthold tenancies. He claimed that they are not producing the desired results. He omitted to say that 30,000 houses are standing empty because shorthold tenancies are not being taken up as they should be. They are not being taken up because Opposition housing spokesmen have repeatedly threatened or promised that the Labour Party, if ever returned to office—heaven forbid!—would alter the law on shorthold tenancies. The result is that no one will build houses to let on these tenancies. If they built them and the Labour Party was returned to office, they would witness the cancellation of the shorthold concept.
Mr. Joseph Dean: If the hon. Gentleman is a supporter of building housing for rent in the private sector, will he tell us why houses or flats were not built for rent subsequent to the 1957 rent legislation, which produced Rachman?
Sir Albert Costain: The hon. Gentleman seems badly to have misunderstood me. I have said that housing for rent would be built by means of the investments of pension funds and unions. That would happen in the absence of rent controls.
Mr. Douglas Hogg: Is not the answer to the hon. Member for Leeds, West (Mr. Dean) that after the 1957 Act the tenant of furnished accommodation did not have security of possession? It is only recently that that security has been extended throughout the housing market.
Sir Albert Costain: The answer lies in supply and demand. The Opposition must realise that if all their proposals are against the landlord and in favour of the tenant the landlord will not build houses for tenants. How

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simple can we make this? The hon. Member for Warrington has union connections. Perhaps he will explain why trade union pension funds are being used now to invest in antiques. The answer is that there are no controls on antiques. The unions do not build houses to let because of the controls.
Mr. Joseph Dean: If union funds had been used to buy some of the housing in the area that I represented in Manchester 15 to 20 years ago, they would have been buying antiques.
Sir Albert Costain: I do not know the housing position in Manchester. As a Liverpudlian I never refer to housing in Manchester. If I took up Manchester's housing, or any of its other issues, I might be had up for slander. This is an old Liverpudlian-Mancunian situation. If I went into it now, I should bore the House.
As I have said, the answer lies in the basic principle of supply and demand. If enough premises were available for rent in the areas where prospective tenants wanted them, there would be no need for controls. There are controls because that level of supply does not exist. The controls will not be removed until prospective investors recognise that it will be worth while to invest.
The company with which I was connected built many houses to let over many years. In the end it had to build rented accommodation abroad and to concentrate on building office properties in this country. It built up a business of constructing blocks of flats and offices to sell to pension funds as investments. That meant that the company had sufficient funds to allow it to continue building. The pension funds discontinued this form of investment when controls were introduced. They decided to invest in office blocks and my company had to switch its operations from domestic housing to office blocks. It did not want to do so, but its hand was forced because it could not afford to build without the prospect of selling.
The hon. Member for Warrington talked about high-rise buildings. Does he realise that no private property company would have dreamt of engaging in high-rise building? These developments were introduced only when local authorities decided to take over the building of flats to let—[Interruption.] If the hon. Member for Leeds, West wishes to intervene, I ask him to rise in his place and not to growl at me. Do not growl at me, please, for it is bad manners.
Mr. Hoyle: The hon. Gentleman is painting a picture of conditions that disappeared a long time ago. He is talking about conditions before the First World War when 90 per cent. of rented accommodation was in the private sector. Will he explain why successive Governments since the end of the Second World War have chosen, quite rightly in my view, to protect tenants against landlords like Rachman and others? Surely it has been necessary to do this. Is he not harping on an era that will never return?
Sir Albert Costain: If the hon. Gentleman is saying that I am harping on a situation that will never return, he is admitting defeat. Rent controls were introduced during the First World War. There were about nine housing reports at that time. As a boy of 12 I went with my father to the first council estate to be built. It was built at Bootle. I remember being told "This is a council estate. It will provide homes for the heroes whom Lloyd George has been talking about. We are building 50 houses for the
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Bootle corporation. The people will not really want to live in them because they will think that they are almshouses. They will live in them for only three, four, six or nine months. They will want these council houses while they are waiting for accommodation to be built following the war."
However, the Government decided to retain controls because housing was in short supply. Unfortunately, the hon. Gentleman's mind is made up and he does not want to hear the facts. He must realise that landlords will invest in housing only when they recognise that it is worth while doing so. The hon. Gentleman keeps talking about the need for tenants to have certain rights. He says that tenants should have the right to have repairs done to their property and draws attention to landlords' obligations. If a window is smashed or a back door is broken, he says that he should be able to inform the landlord and to have the repair work done at his convenience.
What happens if a tenant and his family break the windows once a week? This happens in some areas. What happens if that and other damage is caused regularly by the tenant? I have seen houses where things have been thrown at the husband that damaged the plumbing and the electric work. It has taken two to three estimates to repair the damage done during a wifely row.
The hon. Gentleman must get it right. I admit that there are some bad landlords—I have one in my constituency. I am doing my best to get rid of him. Thank goodness, I have only one. However, I have more than one had tenant, but the hon. Member is saying that they should never be got rid of. All they should do is live in a house, make a mess of it, spoil it and move on, leaving the landlord to fix it. It is simple. We are short of houses to let because there are controls. If controls are released, there will be houses to rent. It is as simple as that.
4.40 pm
Mr. Robert Edwards: I should like to follow the speech of the hon. Member for Folkestone and Hythe (Sir A. Costain) in some detail because we have listened to the genuine voice of the builders. He referred to the period when the trade unions put money into the building of houses, through the National Housebuilders Guild. Many of our trade unions emptied their treasuries for that project. However, the building materials monopolies made it extremely difficult for the guild to get supplies. It negotiated thousands of agreements to build houses for local authorities, fine high-quality houses at low rents.
The Tory Government of the day were so scared at the development of the guild that they introduced legislation in a new housing Bill that made it almost impossible for the guild to negotiate new agreements with local authorities. It was this that destroyed the majestic project under which the unions were financing the building of good quality houses at low rent for the people. That is the true history of the finance of the guild.
Mr. Joseph Dean: Is my hon. Friend aware that some of the housing schemes that started with trade union backing had to be taken over by the local authorities, but still stand today as some of the best value for money in bricks and mortar, if one takes a 60-year loan repayment period into account?
Mr. Edwards: My hon. Friend confirms what I was saying about the National Housebuilders Guild. The

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unions were ready not just to put pension funds into building but to put general funds into the building of high-quality houses.
We are grateful to my hon. Friend the Member for Warrington (Mr. Hoyle) for introducing this subject for debate. I thought his speech was a majestic one, constructive and well argued. I compliment him on his remarkable speech, which will read well in Hansard tomorrow. The speech was so constructive that it is rather difficult to follow. I should like to say the same things. However, there are a few issues that he has not mentioned with which I should like to deal.
A report is coming out this week dealing with housing in England. It states that one in every 10 houses in England is not fit for human habitation. It goes on to say that there are 1 million houses in England that lack basic amenities. This is a scandal, and we should be ashamed of ourselves as Members of Parliament that we allow such a problem to exist.
We need millions of houses. Every hon. Member here knows that at every surgery we attend half of the cases are to do with housing, with young couples on long housing lists and old people in high-rise flats who want to get out because their lives are a misery. These flats should be razed to the ground, just as some of the slums should be razed to the ground.
We are in the middle of a period of depression, with 4 million unemployed, and we should be thinking in terms of rebuilding our cities and inner cities. What is the problem? There are 400,000 building trade workers unemployed—denied the right to work. There is plenty of land, and millions of bricks piled up unused. There is all the skill in the world and thousands of unemployed steel workers who could supply the steel needed. Pilkington Bros. is closing part of its glassworks, when that glass could be used for building houses. What is the problem? Is it a shortage of money? There is no shortage of money. We do not know what to do with the money that we have.
Lloyds Bank has just received permission from the Government and the Bank of England to loan the Fascist Government of Argentina £600 million. It is enough to make the 400 British Tommies who died in the Falkland Islands turn in their graves that we allow such a thing. We cannot find money to clear the slums but we find money to sustain the declining economy of this Fascist dictatorship. How can this be justified?
The pension funds have been mentioned and there is about £60 billion in them, but the money is being invested in South Africa, Latin America and the new technology overseas to compete with our own new technology. I do not blame the unions for this. They have very little control over pension funds.
Mr. Hoyle: Does not this make the Labour programme to reintroduce exchange controls and set up an international investment bank that would invest in the construction industry and in projects such as those that my hon. Friend is describing essential if we are to get out of the economic mess that we are in?
Mr. Edwards: My hon. Friend is a loyal member of the Labour Party and subscribes to its policy. However, the present financial system has failed—it has broken up all over the world and we know it. We need massive Government intervention to use the money that is not
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being used effectively to reconstruct our country and put people back to work. This seems to be an elementary issue. One of the big construction jobs that is crying out loud to be done is the rebuilding of our inner cities. We must make our cities fit for our children to live in, in security and dignity. That is what the Labour movement wants to do with the funds that are available but are not being used.
My hon. Friend the Member for Warrington mentioned a charter for council house tenants. In 1969 I introduced a Private Member's Bill entitled the Council Tenants' Charter Bill, which aimed to
"Establish a charter of rights for council tenants."
I introduced the Bill twice and received a promise from the Labour Government of the time that they would find time for it. Unfortunately, we lost the election and with it the opportunity to enact my Bill. However, I was given a promise that time would be found, and I accepted that promise.
My Bill was a simple one that asked that the 5 million council tenants should be consulted, that there should be a statutory body so that they would have some say over rents, amenities and referrals, and that every council estate should have a tenants' council.
Mr. Douglas Hogg: The hon. Gentleman said that he was promised by the Labour Administration that Government time would be found for his Bill. When was that promise given?
Mr. Edwards: It was included in the Labour Party's manifesto for the following election. Unfortunately, we did not win the election. I was promised that it would feature in the then Government's policy and that time would be given for such a Bill. I accepted that promise from my Chief Whip and the Leader of the House, because I introduced the Bill on two occasions. I must also point out that it was not a negative measure; it was not just for council house tenants. I also introduced a Private Member's Bill to protect home owners against jerry builders, and we had a considerable debate in the House on those two subjects.
It is still valid to have a charter covering council house tenants. I repeat, there are 5 million of them. They are a very important section of our community. This country is one of the most backward in the world when it comes to consultation. There is very little consultation in industry and almost none in housing, whether it be in the private sector or in the sector controlled by local government. It is time that we brought house owners and tenants into active participation in the running of their estates. If nothing else, it would end vandalism.
I remember an occasion in my constituency when a number of small trees were planted, and they were vandalised. Council officials visited local schools and asked every child to adopt a tree. That ended the vandalism, because each child had a tree to conserve. That is the kind of participation that we should support actively.
I know that other hon. Members wish to take part in this debate. The case has been made extremely well by my hon. Friend the Member for Warrington. But even at this late hour I ask the Government to co-operate with us to get some kind of dignity, control and participation among council house tenants. They need a charter desparately.
4.53 pm
Mr. John Heddle: It is always a great pleasure to be called immediately after the hon. Member for Wolverhampton, South-East (Mr. Edwards) and, before I deal with the speech of the hon. Member for Warrington (Mr. Hoyle), perhaps the hon. Member for Wolverhampton, South-East or the hon. Member for Bolton, West (Mrs. Taylor) can explain why the last Labour Government gave the hon. Gentleman the green light to introduce a Bill establishing a tenants' charter, bearing in mind that in 1977 a Labour Government voted down a similar Bill introduced by my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre). It seems to be yet another example of the Labour Party, when in Government, speaking out of both sides of its mouth and making contradictory statements.
There must be many hon. Members on both sides of the House who would give their eye teeth to come third in a private Members' ballot, many more to come second, and still more to come first. We should be grateful to the hon. Member for Warrington for giving the House the opportunity to discuss, in the words of the motion,
"its disgust at the appalling treatment by this Government of tenants, public and private, and calls upon it to accord these citizens equal treatment with private owners of property in order to remedy the injustices which the Government is imposing upon them."
I congratulate the hon. Member for Warrington on selecting this subject for debate, because it gives Government supporters the chance to examine precisely what the Labour Party did in government between 1974 and 1979, what the present Government have done since 4 May 1979, and what the Opposition parties would do if they were elected, jointly or severally, at some future general election.
I should begin by declaring an interest. The hon. Member for Warrington spoke of rent collectors, and his comment was picked up by the hon. Member for Woolwich, East (Mr. Cartwright). More years ago than I care to remember, when I was an articled pupil with a firm of chartered surveyors, I started every Monday morning on a bicycle collecting rents, drinking more cups of tea than I wish to recall, and listening to complaints, some relevant to the properties and others more relevant to the families of the tenants whose rents I was collecting. Having declared that interest, I shall refer later to the vital and important role of the rent collector.
The hon. Member for Warrington will be surprised, as will the House, that I agree with one or two of his arguments. I agree that a number of local authorities are patently bad landlords and will invest the money that they raise from the sale of council houses not in their housing stock, but in mayoral cars and liveried chauffeurs. The Labour-controlled Tamworth borough council did precisely that this month. Instead of making available bathrooms and new electricity circuits and curing the damp in properties in Bailey Avenue, Tamworth, for several of its needy and deserving tenants, the borough council decided to invest £20,000 in pomp and glory to provide Councillor Mrs. Nancy Padfield, the mayor of Tamworth, with a new Ford Cortina Ghia and a liveried chauffeur who is no doubt on an index-linked pension. I am entitled to ask the hon. Member for Warrington where the real priorities of Tamworth borough council lie.
The motion also enables the House to cast its mind back to the period of the last Labour Government, when the
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hon. Member for Warrington was a Back-Bench Member. The House will recall that that Government were responsible for the Rent Act 1974. As with all Rent Acts, it had precisely the reverse effect to that which the legislators and parliamentary draftsmen intended. Instead of increasing the supply of furnished rented accommodation, the Act decreased it. Instead of decreasing homelessness, it increased it.
The hon. Gentleman's motion also affords us the opportunity to recall that, during the lifetime of the last Labour Government, homelessness doubled. In 1974, the number of registered homeless people was 27,500. In 1975 and 1976, after the implementation of the 1974 Act, the figure rose to 33,600. By May 1979, when that Government were denied a further period in office, the number of homeless families had risen to 57,200.
Perhaps the most damning indictment of the housing policies of the Labour Government is put no better than in the first leader in The Times of 1 February 1977:
"The 1974 Act itself, extending security of tenure to the furnished tenant, only completed a long train of legislation concerned with the landlord only as potential oppressor. There are many clogs on the easy renting of housing that fall easily inside Mr. Shore's proviso about security of tenure—the cumbersome processes that a landlord entitled to repossess must go through, the limited categories of cases in which special circumstances are held to justify letting for a limited period, the complicated accretion of laws and customs governing the fixing of rents, and so on. The failure in its present form of the rent allowance scheme (taken up by only a third of those entitled to it) is a decisive bar to the creation of a rational rent system …But it is the excessive weight given to the tenant's security in all circumstances that most limits the usefulness of the private rented sector. As at every other level, our housing policy heaps benefits, often irrelevant, on the incumbent tenant at the expense of those who seek to become tenants themselves. A major easing of the housing shortage could be achieved by drastically widening the opportunties for a landlord to enter into an agreement with a tenant without signing his property away for a lifetime."
We must move on from 1974 to 1977. The hon. Member for Warrington was a Back-Bench Member of that Government, and he will recall his Government's housing policy review of 1977, which said:
"If the decline continues"—
this refers to the private rented sector—
"unabated and no action were taken to compensate for the loss of accommodation from that sector, many people—particularly new and mobile households—might not be able to find the housing they need. It might be argued…that this is already beginning to happen in a number of areas. To guard against this, we"—
that is, the then Government—
"need to consider what action can be taken to stimulate the supply of lettings within the private sector, and what can he done to provide accommodation in the public sector."
What did the hon. Gentleman's Government do? They did precisely nothing. They did so little that no subsequent Labour Party conference even bothered to debate the findings of that Green Paper.
Perhaps I may remind the House of what Mr. David Webster said in an article headed
"Why Labour failed on housing"
in New Society of 17 January 1980. I am not a regular reader of New Society, but I suspect that its views are not entirely dedicated to all the philosophies and policies of the present Administration. Mr. Webster said:
"Perhaps most culpable was the failure of Labour's annual conference to transmit the growing discontent of council tenants or to mount any real pressure to tackle bad conditions in council housing. This probably reflects the party's declining mass base. But such a stance would also have been inconvenient for the party's traditionalists"—

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I include the hon. Member for Warrington among them.
"Council housing 'must be good', by definition, because it is in the public sector."
There Mr. Webster sums it up.
What have this Government done in housing in three and a half action-packed years? Hon. Members may laugh, but I shall tell them precisely what this Government have done in three and a half years to help tenants in both the public sector and the private sector, and perhaps hon. Members will then admit that they had the opportunity during five whole years to do precisely the same, but that they let the opportunities pass by.
Did the Labour Government introduce a tenants' charter? No, they did not. This Government did. Did the Labour Government introduce security for public sector tenants? No, this Government did. Did the Labour Government extend to tenants in the public sector the right to take in lodgers to supplement their incomes? No, but this Government did. Did the Labour Government extend to tenants the right to sub—let, to provide accommodation for students, to provide the much-needed homes for first-time buyers, the newly-marrieds to which the hon. Member for Warrington referred? No, but this Government did. Did the Labour Government introduce the right for tenants to carry out repairs to the property that they hold either through the local council or a private landlord? No. This Government did, and, in particular, this Government increased substantially the improvement grants available to both private sector and public sector tenants. Indeed, recently my right hon. Friend the Secretary of State for the Environment announced the extension of the 90 per cent. improvement grants to April 1984, which must further stimulate demand in the construction industry.
Mr. Hoyle: The hon. Gentleman knows very well that in the 1979 Housing Bill, which would have been enacted by a Labour Government, there was a far stronger tenants' charter than the one in the Housing Act 1980. It ill becomes the hon. Gentleman to say such things, when he knows full well that that charter would have been introduced by a Labour Government.
Mr. Heddle: I am tempted to remind the hon. Gentleman of Nero's fiddling while Rome burned. Instead, I shall remind him and the House of the occasion when the great artist Turner was painting the "Fighting Téméraire". You will recall, Mr. Deputy Speaker, that most vivid and beautiful sunset. Someone said to Mr. Turner "I could have done that". Mr. Turner carried on painting, and said after a few minutes "Why didn't you, then?" That is my answer to the hon. Gentleman.
I understand why Labour Members do not sit easily in their seats. Did they give tenants the opportunity to obtain the information about who owned their property? The hon. Member for Warrington specifically referred to absentee and anonymous landlords. If he read through the Housing Act 1980 he would find it all there. The present Government gave tenants those rights. Did the Labour Government introduce a national mobility scheme, a tenants' exchange scheme, to get our wooden and static society on the move again? No, but this Government did. Did the Labour Government introduce facilities to bring forward rundown houses in inner city areas for sale, either outright or on half-and-half schemes? No, but this
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Government did, backed up by generous grants of £7,500 in the provinces and £10,000 in London, to enable the houses which complied with yesterday's standards to be brought up to today's standards and to provide homes for young couples tomorrow.
Did the Labour Government introduce share purchase? No. This Government did. The hon. Members for Warrington and for Wolverhampton, South-East mentioned the plight of the inner cities. Inner cities can be given new life by enabling the people who live there to have a stake in their environment. That can be done best by allowing them to buy part of their home, if they cannot buy all of it now, and subsequently to buy more, as their job prospects improve.
The Housing and Building Control Bill, now in Committee, extends that right to many more council and private sector tenants. The Government have also introduced mortgage guarantee schemes to enable public sector tenants on low incomes to take out mortgages, and the Government will underwrite any loss that the local authority may suffer by selling to such tenants.
The Government have also introduced the priority estates project. In just over three years, they have, by enlightened estate management, brought forward 300,000 hard-to-let dwellings. The hon. Member for Warrington spoke of tenants' co-operatives. To an extent, I go along with him, but I commend to him and to the House the priority estates project. I know the plight of tenants who live in system-built high-rise blocks of flats, a subject dear to the hon. Member for Leeds, West (Mr. Dean). The hon. Member for Wolverhampton, South-East also referred to them. I agree with them that it is not morally right for tenants who live in such accommodation necessarily to suffer the dereliction that is not the fault of themselves, but, in large measure, of the architects and corporation officials who employed untried and untested materials and methods. That is why the House will welcome the Government's initiative in introducing the housing defects prevention units.
Mr. Joseph Dean: Before the hon. Gentleman leaves that point, it is not fair to blame only the architects and local authorities. I agree that they have a tremendous responsibility for introducing the monstrosities with which we are now saddled, some of which are having to be demolished, and for which the coucil house tenants still have to pay. However, the overriding driving force was successive Governments of both parties. Let us put some of the blame where it lies. The idea was to get an extra 100,000 units per year into the building programme. That was the way in which Governments said that it could be done. At local level, some of us in both parties opposed it, but unfortunately we lost the vote. The main culprits were Governments, and it was all to do with high-density subsidies.
Mr. Heddle: I do not deny that that is true, but the Government have done something about it by introducing their housing defects prevention unit and, more directly, by protecting tenants and people who have exercised their right to buy under the Housing Act and who have bought Airey houses. They will have the security of knowing that any inherent defects in those structures will not be landed at their front door.
In addition, the Government have introduced the shorthold scheme. Labour Members will sneer cynically

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when we say that one reason why the shorthold scheme has not yet met the considerable demand for the right to rent is because the Labour Party is committed, out of sheer blind political dogmatism and hatred of the private landlord, private property and capital, to deny those awaiting the key to a council house the opportunity to rent. Does the hon. Member for Warrington agree that his party should withdraw its commitment to repeal the shorthold provisions of the Housing Act so that they can be given an opportunity to work?
Mr. Hoyle: The Housing Act is obviously not working. Why will not the hon. Gentleman admit that the private sector is still in decline, as it was under the Conservative Government which preceded the last Labour Government? The rosy picture that he is painting of the Government's actions is far from true. Why does not he admit that the Government have built fewer houses than any Government since 1924?
Under this Government mortgage interest rates rose to their highest level and are only now beginning to drop. Far from the picture being rosy, it has been more difficult for people to buy a house under this Government than under the Labour Government and, indeed, under previous Conservative Administrations as well.
Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I remind the House that the Front-Bench spokesmen hope to reply at 6.15 pm and six hon. Members are trying to catch my eye. Interventions tend to prolong speeches.
Mr. Heddle: I shall draw my remarks to a conclusion and say that Conservative and Labour Members should paint a constructive picture. Unfortunately, the hon. Member for Warrington has not done so. He has peddled the further myth that by building more council houses homelessness will be reduced. The figures do not support that argument.
I shall conclude by making three constructive recommendations. Council house rent arrears are so appallingly high in some areas because, as was mentioned earlier, council tenants have no connection with their landlord. They cannot relate to the town hall. Therefore, I suggest that the rent collector should be brought back, not only to collect rents, but to advise generally on household management and to be a counsellor in times of need and distress.
Local authorities should be given the opportunity to take out insurance policies to cover themselves against defects causes by poor design, construction or materials. They would then be able to take early action to protect their properties and their tenants' interests.
The voluntary housing movement, housing associations and housing societies may have a rather better record as estate managers than do local authorities. Is not that an argument for transferring at least the estate management function—rent collection and the supervision of repairs—from the town hall to the voluntary housing movement? Until the Labour Party stops treating every council estate and tenant as its own electoral fief, put into practice what its housing policy review preached in Government and begins to understand the aims, ambitions and aspirations of ordinary people, it has no right to express its disgust of Government policy towards tenants in the public and private sectors. I hope that the House will overwhelmingly reject the motion.
5.14 pm
Mr. John Cartwright: Like the hon. Member for Lichfield and Tamworth (Mr. Heddle), I should like to congratulate the hon. Member for Warrington (Mr. Hoyle) on his choice of subject for debate this afternoon. The hon. Member for Warrington ranged over a much wider area than is covered by the motion. If he will forgive me for saying so, the motion is a somewhat black and white work which seems to suggest that the Government are responsible for every ill that tenants are suffering.
I am willing to agree that the Government's attitude is not all that encouraging for tenants as a group. They certainly give the impression of believing that owner-occupation is inherently good, whereas renting implies a second class status, of which council house renting has the lowest ranking of all. The picture of feather-bedded council tenants being subsidised by hard-working, rate-paying owner-occupiers was always a caricature of the truth. The Government seem determined to reverse the postion by the help that is being given to owner-occupiers as compared with that which goes to council tenants.
I do not want to spend a long time on a negative argument. I do not believe that tenant's problems, whether council or private, are just a matter of Government policies, important though those are. Tenants are affected by their landlord, by his responsiveness to their needs and by his sensitivity to their problems. On such a test, too many local authorities fail. Too many are remote and bureaucratic, collecting rent, as has been said, by computer, failing to answer letters and taking months over comparatively simple repairs.
I make no apology for concentrating my remarks on the local authority sector because that affects many people in Britain. For example, 50 per cent. of my constituents live in local authority housing. I and my authority believe that a powerful case can be made for decentralisation in the management of local authority housing. I do not believe that highly centralised local authority housing departments can manage between 20,000 and 60,000 homes and at the same time provide the sensitive service that tenants need and deserve. That is why I, and Social Democrats generally, are strongly opposed to the municipalisation of private rented property.
I do not want to see local authorities, which are already struggling with housing problems, faced with another burden of a decaying and often dilapidated property in addition to their management problems. A system of local management in council housing, with a local manager in an area office close to the bulk of the tenants for whom he is responsible, would provide the responsive style of management that tenants need and deserve. Such a decentralised manager should have control over the day-to-day repairs—everything but the major repair problems. There should be, as hon. Members have said, the closest possible involvement of tenants in the area management structure.
If we want to attract tenant involvement in the management of estates, we must give them real responsibility, real problems to face and real duties to carry out. Some of the joint tenants and management committees that we have seen in the past have not been well supported by tenants because they turned out to be mere talking shops. If we want proper tenant involvement

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we must give joint tenant and management committees power over such things as housing budgets, standards of local services on the estates, and so on.
I agree with the hon. Member for Warrington that we should encourage management and maintenance co-operatives among council tenants. I think that he would accept that that is an easy argument to put forward, but a much more difficult argument to bring to reality. Many tenants simply say that they pay their rent, want the services for which they pay provided for them and would rather the local authority did its job properly than that they should be involved in all the hassle and difficulty of running a co-operative.
I agree, in principle, that the ideal way to organise such involvement would be through a method of management and maintenance co-operatives in which the tenants had control over their destiny and therefore could improve the quality of life on their estates.
The motion speaks of the need to give tenants
"equal treatment with private owners".
In one respect local authority tenants are at an obvious disadvantage compared with private owners. I refer to the choice of property. Owner-occupiers have a choice where they live. Council house tenants, whether at the beginning of a tenancy or in a transfer, must go where the local authority tells them to go. The allocation system offers them only one or two choices. If they do not accept an offer they go to the back of the queue. That system of allocation causes resentment amongst tenants.
The allocation system is inefficient. Many properties are left empty for months because of the time that it takes to reallocate a property when it becomes vacant. Delays are caused by dealing wih repairs, and offering it to umpteen different people before it is accepted.
I was staggered to learn from a recent written reply that nearly 33,000 council properties were vacant in the Greater London area on 1 April this year. Between them, 11 inner London boroughs owned 22,000 of those properties. We are all familiar with the properties involved. They are boarded-up month after month because tenants will not take them.
We should introduce an element of do-it-yourself into the allocation system. People should be told what type of property is available to them. They should be allowed to examine vacant property lists and settle where they live for themselves. That would give council tenants greater satisfaction. They do not come out of the ark in neat packages so that they fit neatly into the computerised allocation system. Experiments have taken place. Housing allocation offices should operate more like estate agents.
The question of repairs has loomed large in the debate. I am glad that a tenant's basic right to repair his own home is now recognised. I welcome the commitment by my hon. Friend the Member for Bolton, West (Mrs. Taylor) in the new clause she has tabled to the Housing and Building Control Bill. The Labour Party is not alone in supporting such a reform. The tenants' movement has suggested it for many years. The SDP made a similar proposal in its discussion document on inner city problems published in the summer. The document states:
"Tenants who are dissatisfied with repair services should be given the right to call in an outside contractor from an approved list."
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There is a measure of agreement across a broad spectrum that tenants are entitled to such support. I welcome the conversion by some members of the Labour Party to the belief that competition with private enterprise can result in a better job for tenants who need repairs to their homes.
Some hon. Members suggest that repair delays on council estates are due to Government cuts. I have no doubt that that is a major factor, but other problems arise from bad organisation. Sometimes three local authority departments are involved. The housing department will receive the basic complaint, the works department has to do the job and sometimes the architect's department is involved. Sometimes outside consultants or contractors are also called in. That takes time and, as the hon. Member for Warrington said, tenants are not usually kept informed. The tenant may have to wait months for the work to be done. That causes frustration. Tenants believe that, since they pay their rent, they are entitled to expect the jobs to be done.
I have heard of constituents having to wait months for rotten window frames to be replaced. They encounter demarcation problems. The man who puts in the window frame is not the man who puts in the glass. When the carpenter leaves a tenant may have to wait weeks or months before the glazier puts the glass in the window. The tenant has to live with hardboard or polythene in the window. There can be further delays before the decorators repaint the window. Such demarcation may have been necessary once, but we can no longer afford it now.
We all know tales of disaster in our constituencies. I shall relate one about an elderly pensioner who was called back from holiday last August by a panic telephone call telling him to go home at once, because his house was on fire. My constituent rushed home to discover that the council's painter and decorator, when burning off the paintwork, had set fire to his bedroom window. The fire brigade prevented the blaze from spreading far, but the council had to board up the bedroom window. It is still boarded up four months later. The council has measured up, but cannot say when the replacement frame will be installed. Such delays cause bitter resentment and frustration.
Mobility is an essential ingredient of any tenants' charter. There are many schemes but few moves. It is easier to transfer a constituent to Australia or Canada than from one London borough to another. Many tenants want to move from inner London to more desirable areas in outer London or the shire counties. They have only an eighteenth storey flat in a multi-storey block to offer and mutual exchanges are not easy to arrange. Insufficient rented housing exists in the outer and rural areas.
A charter must include provision for compensation when tenants improve their homes. Some of my constituents have installed central heating, modernised their kitchen or built a garage in the garden, but when they move they receive not one penny piece in compensation. Sometimes they are billed by the local authority for putting back original fittings, which they have modernised at their own cost. A meaningful tenants' charter must include a compensation system for council tenants who improve their homes.
Council tenants must be given power and involvement. I was shocked by a statistic in another recent written reply about the number of properties in Greater London officially described as difficult to let. The Department of the Environment applies that description to

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"dwellings which are frequently rejected or accepted very reluctantly even by applicants in urgent housing need."
In Greater London there are about 90,000 such dwellings in the public sector. Between them, 11 inner London boroughs own 68,000 properties described as difficult to let. Such statistics are an appalling indictment of the standards on too many of our council estates.
The tenants usually know the solutions to the problems best. The more we recognise that council tenants have rights and the more power that we give them, the more successful we shall be in removing the stigma of council tenancies and the more we shall do genuinely to improve the quality of life for millions who live on council estates.
5.29 pm
Mr. Douglas Hogg: The subject is wide-ranging. The most useful approach by Back Benchers is to focus on one matter which, in their opinion, provides opportunity for change. I suggest that tenants are unfairly treated in one major respect and that my right hon. and hon. Friends can intervene. Tenants have security of possession as a result of the Rent Acts, most recently as a result of the Rent Act 1977.
Many right hon. and hon. Members probably do not know that certain provisions of the Housing Act 1957 deprive tenants of their security of tenure as provided for by the Rent Act 1977. I am referring to the power of local authorities to make demolition and closing orders. Those powers are enshrined in section 16 to 20 of the Housing Act 1957.
A local authority has the power to make a closing or demolition order where it is satisfied that a house is not reasonably fit for human occupation, and, furthermore, that it cannot be put into such a condition at a reasonable cost. When a local authority is satisfied of those facts it makes either a demolition or a closing order. The consequence of such orders is great, because they mean exactly what they say, subject to one important proviso—that the owner may be able to persuade the local authority to revoke the order if he is able to embark upon a satisfactory rehabilitation scheme.
The orders have also a serious effect on tenants because, once a closing or demolition order is made, the tenant has no defence to an action for possession, and the Housing Act 1957 provides that the Rent Acts do not apply to such premises. Thus, when a closing or demolition order is made the tenant is out and he has no defence. The effect of the provision is so great that Parliament has enshrined two safeguards in the Housing Act 1957. Unfortunately, those safeguards do not assist the great majority of tenants.
The first safeguard provided by the Housing Act 1957 against an injustice resulting from such orders is the obligation on the part of the local authority, which is contemplating making such an order, to give notice of that fact to various classes of person. When such a notice is given those classes of person have the right to be heard by the local authority.
The classes of person whom the local authority is obliged to notify are mortgagees, owners and the person entitled to receive the rent. The tenant is the one person who is not told that a closing or demolition order is being contemplated. A fortiori, the tenant has no right to appear before the local authority to object.
Mr. Heddle: I find what my hon. Friend is saying interesting. I had no knowledge of it. Lest the House gains
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the wrong impression, will my hon. Friend confirm that the local authority has not just the power, but the duty, to rehouse the tenant whose property is subject to a closing or demolition order, and that in the majority of cases closing or demolition orders arise because of representations made by the tenant?
Mr. Hogg: The answer to the first question is, yes, the local authority has a duty to rehouse. However, the local authority does not always offer the tenant comparable accommodation, and in any case a long-term tenant might not want to move. The answer to the second question, as to whether the original complaint comes from the tenant, is "Sometimes but not always".
The tenant is the one person who does not receive a time-and-place notice, but the injustice goes further than that. Because the effect of the orders is considerable, Parliament has provided that there should be a right of appeal and the appeal procedure is enshrined in section 20 of the Housing Act 1957. It provides that any person aggrieved should have a right to appeal to a county court where the matter is considered afresh. However, section 20(2) limits the class of persons who have the right of appeal and the tenant does not have a right of appeal unless the unexpired portion of his tenancy exceeds three years. Tenants do not have a right of appeal if they are periodic, weekly, monthly, yearly or statutory tenants. A statutory tenant is a contractual tenant who is holding over under the statutory provision. Periodic and statutory tenants form the vast majority of tenants.
Closing or demolition orders are methods whereby tenants are excluded as they have no defence to a claim for possession of premises. A tenant who is affected is never informed that the local authority is contemplating an order, and he has no right to make representations or to appeal. That could be bad enough if landlords were always fair and reasonable people. What happens if the landlord is not a fair and reasonable person and has recognised that the interplay of those two statutes gives him a unique opportunity to secure possession of the premises? If the landlord incites the local authority to make a closing or demolition order, acquiesces in it, and the local authority makes the order, the landlord takes possession proceedings. There is no defence. The tenant is evicted. The landlord takes possession. He rehabilitates the property and sells it with vacant possession.
Mr. Robert Edwards: Is that done frequently?
Mr. Hogg: I am not able to quantify the number, but I know of cases when it has been done. If it can be done, I wager that it is done frequently. Some unfair landlords can gain possession of property by using a procedure that was never contemplated for that purpose. It is a use of an unfair position which has existed since 1957. It could he put right easily in two ways, firstly, by amending section 16 of the Housing Act 1957 so that tenants must be given notice that the local authority is contemplating making an order and thus, a fortiori, the right to address the local authority. Second, section 20 of the Housing Act 1957 should be amended by repealing subsection (2) to give all tenants the right to appeal to county courts against the making of such orders. The injustice would then be eradicated.

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There is no political capital to be made out of the matter. No party is to blame. The position has existed since 1957. It is wrong, and I hope that in due course the House will put it right.
5.38 pm
Mr. Joseph Dean: I join hon. Members from both sides of the House in complimenting my hon. Friend the Member for Warrington (Mr. Hoyle) in choosing this subject for debate. It is a while since we had a reasonable debate on housing and the rights of tenants, although the debate has ranged wider than that.
The overwhelming majority of tenants are in the public sector and most of my remarks will be made on their behalf. My hon. Friend the Member for Warrington said that the Government's record on housing construction was the worst since 1924. I believe that their general housing policy is the worst since 1924. They have not increased public sector tenancies by one property, and any increase in the private sector has been minimal.
Since the Government took office council rents have risen by over 120 per cent. That is a much greater rise than for any other vital commodity. The Government are using council tenants in the worst way in their financial experiments. At present, 40 to 50 per cent. of council tenants are in receipt of assistance; the other 50 per cent. are having to bear the main brunt of the Government's rent policies. It may be argued that tenants have the chance to buy, but most of them, with incomes just sufficient for them to pay the full rent, are in no position to buy and never will be.
The hon. Member for Lichfield and Tamworth (Mr. Heddle) spoke of the vital role of housing associations. I was chairman of housing in a large authority and have always been interested in housing. I am aware that charitable housing associations fill an important gap in areas that are particularly stressed, but the associations are being put into the sausage machine. When the Government's present legislation goes through, they will have to dispose of their assets.
Council rents are having to be increased to pay for many things. The hon. Member for Lichfield and Tamworth had a first-class debate on Airey housing. That is another facet of industrial building that is deteriorating. People who have bought the houses will have to spend substantial sums—considerably more than they can afford—to remedy the construction defects.
The Minister gave these people certain guarantees, but hundreds of thousands of council tenants live in Airey houses that are deteriorating. The city of Leeds has over 2,000 Airey houses and it will cost approximately £20 million to remedy the defects. The Minister has made no promises about council houses. He has not told Leeds that he will underwrite a large proportion of the money needed to do these repairs.
All informed opinion states that 500,000 fewer properties are available to let than when the Government took office. When the defective industrialised building is disgorged from the housing stock, I believe that the figure will be nearer 1 million. The Government have failed to grasp the nettle. It has been suggested that £3,000 million is needed to deal with the problem. Will the Government once again say that council tenants must pay?
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During an Adjournment debate we discussed property in Leeds. A property in the constituency of my right hon. Friend the Member for Leeds, South (Mr. Rees), consisting of 1,200 units and costing nearly £5 million, was built just over 15 years ago. After paying loan charges for 15 years, £4 million is still owed and the building needs to be demolished.
Mr. Ted Graham: While my hon. Friend is talking of the enormous burden of debt that is likely to fall on council tenants, will he bear in mind the terrible plight of people in new towns? There have been appalling tragedies, particularly in such places as Easington, where bills of £40 million must be met. The Government promise only a small part of the sum needed.
Mr. Dean: That is true. It is a pity that the debate is short and that we do not have anyone from the new towns to take part in it.
Merely to demolish the block in Leeds and carry forward the loan charges will put 22p a week on council house rents for over 40 years. When I led a delegation to the Minister to ask whether Leeds would be given justifiable assistance, he told us to put up the rents.
It is time that the Government ceased their vendetta against council tenants. Most are not tendants by choice. A cross-party decision was made years ago on council housing and many Conservatives believe in council housing, where people should not be punished by high rents.
Where systems have been given full financial approval by the Government and local authorities have had to demolish the properties, the Government should bear the cost and allow the authority additional capital reserves for replacements. It is disgraceful for the Minister to suggest increasing rents.
Mr. Tom Clarke: My hon. Friend speaks eloquently, sincerely and with a greater knowledge than many Tories. May I remind him—
Mr. Deputy Speaker: Order. The hon. Gentleman must not take too long with his intervention. Others are waiting to speak.
Mr. Clarke: I remind my hon. Friend that the Secretary of State for Scotland said recently that rent arrears in the district and island authorities had doubled in the past two years. The Government's policy is not only a failure; it is without mercy.
Mr. Dean: I am grateful to my hon. Friend for raising that point.
The success of a Government's housing policy can be judged by the length of waiting lists and of queues at one's surgery on a Saturday. Waiting lists and the queues at my surgery have escalated considerably. I lay the blame fairly and squarely at the Government's door.
5.49 pm
Mr. Sydney Chapman: I am glad to have the opportunity to make a brief speech. I am also grateful to the hon. Member for Warrington (Mr. Hoyle) for raising the subject, although it will come as no surprise to him if I completely dissociate myself from the terms of the motion. I am also pleased to follow the hon. Member for Leeds, West (Mr. Dean), who I know has great experience of housing.
Understandably, the hon. Member for Leeds, West concentrated on the public sector. I should like to

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concentrate on the private rented sector and to make a defence, if that is necessary, of the private landlord. I know that to do so will not be popular. The law of political popularity deems that there are more tenants than private landlords and therefore anything Government do to help the tenant, even though it may hinder the landlord, is good for votes.
I am conscious that it is difficult to generalise about the private rented sector. The speech of the hon. Member for Warrington in that regard seemed at best to be a gross over-simplification of the problem and at worst revealed the widespread and inherent prejudice there is against private landlords. The hon. Member for Leeds, West referred to the Government's vendetta against the public sector tenant. The Labour Party's vendetta against the private landlord is more overt.
I agree with the hon. Member for Warrington in one respect—there has been a decline both in the numbers in the private rented sector and in the proportion of the private rented sector within the total housing stock. In 1914, there were 7½ million dwellings in the private rented sector. That represented 88 per cent. of the total housing stock. By 1956, that had been reduced to 5·4 million dwellings, or 36 per cent. of the total housing stock. The most recent figure that I have—for 1978—shows that there are only 1·9 million dwellings in the private rented sector, representing less than 10 per cent. of the total stock.
Part of the reason for that decline is the increase in home ownership and the increase in council house building during this century. But a significant reason for the decline is that there has generally been a gross unfairness, especially in post-war rent legislation, directed against the private landlord.
Successive Governments have done little to stimulate private lettings. Conservative Governments have not done as much as I should like and the Labour Party, in both words and deeds, has positively encouraged the demise of the private rented sector. My hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) touched on a recent example. He reminded the House of the Socialist commitment to kill off the all-too-modest shorthold tenancy that the present Government introduced.
There are two good reasons why the private rented sector should be encouraged. First, there is a lack of accommodation, to which hon. Members on both sides of the House have referred. That is especially so in London and other conurbations. Surplus accommodation could be provided quickly in large cities if suitable incentives were offered to existing and potential landlords. Secondly, the private landlord is best fitted to provide accommodation, especially for the young and mobile, who do not choose, or initially cannot afford, to own their own homes.
There are many private landlords but quite a high proportion of them are single retired people on extremely modest incomes who have only one property to let. To conjure up visions of the landlord as a Rachman figure—that name has already been used today—is misleading. Moreover, I sincerely believe, however unpopular it may be to say so, that the rent legislation that has been passed by successive Governments is the Achilles heel of British justice. It is loaded so unfairly against the private landlord that it has become self-defeating.
It seems that rent legislation has been devised on the assumption that every private landlord is a rich, villainous exploiter and that every private tenant is a poor, innocent victim. That is not true. It is little wonder that the private
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rented sector is dying when a recent Department of the Environment publication showed that private landlords on average, under so-called fair rents, received only a 3 per cent. gross return on their investments.
I have six proposals that I hope that the Government will consider. Some are interrelated. First, I suggest that the Government seriously consider using existing powers under section 143 of the Rent Act 1977 to experiment and to disapply rent regulations in a selected region of Britain to see what happens. It is worth pointing out that the Rent Act 1977 was introduced and passed by the Socialist Government. If the Government are not minded to follow that suggestion, my second proposal is that they might seriously consider, for a trial period and in certain circumstances, that the Rent Acts should not apply to some new lettings henceforth. If they are not minded to do that—I do not see why not—my third proposal is that lettings of rooms by owner-occupiers should be free from all rent controls from now on. That would encourage more spare and surplus accommodation to come on to the market and it would help to reduce waiting lists and homelessness.
My fourth suggestion is that registered rents should be index-linked to inflation and adjusted every 12 months. The hon. Member for Warrington complained because the period of fixing rent reviews had been reduced in the 1980 Act from three to two years. He would soon be complaining if the retirement pension was reviewed only every two years rather than annually. I cannot see, in all conscience and equity, why the private landlord should not have his rents index-linked, irrespective of the level at which they are fixed under the so-called Rent Acts.
My fifth suggestion is that at least part of the tenant's rent should be allowable against tax along the lines of an owner-occupier claiming tax relief on mortgage interest. That would be a fair way of encouraging tenancies and helping tenants. Finally, the rent income of individual private landlords—it is little enough in most cases and is certainly not an adequate return on investment—should be treated in part as earned, and not as investment, income.
While thanking you, Mr. Deputy Speaker, for calling me in a debate which must be of immense interest to you in light of your experience as a Minister, may I express the hope that we can cease the vendetta that I believe successive Governments have waged against private landlords? I hope that it will be recognised that the private landlord has a valuable contribution to make to the housing stock. If any of my proposals are accepted, I believe that they would ameliorate the plight of at least some of the far too many people who are desperately looking for accommodation for their families.
5.59 pm
Mr. John Spellar: If housing vendetta there be in British politics and in this House, it is a vendetta by the Conservative Party, which is obsessed with council house tenants and the public sector generally.
I was struck by the suggestion of the hon. Member for Chipping Barnet (Mr. Chapman) that registered rents should be index-linked. The tenants in my constituency would like to have had their rents index-linked over the last two years, because while the retail prices index has gone up 50 per cent., their rents have gone up 202 per cent.—even higher than the national average.
Mr. Chapman: The hon. Gentleman may be right if he takes the last three-and-a-half years, but since 1974 rent increases have not gone above the retail prices index.
Mr. Spellar: Since the Conservative Government came to power there has been a dramatic and massive increase in the rents paid by tenants in my constituency.
The hon. Member for Folkestone and Hythe (Sir A. Costain) persistently referred to housing being rationed. It has always been rationed. The argument is whether it should be rationed according to need, or according to price. Conservative Members seem to be keen on the latter.
My hon. Friend the Member for Warrington (Mr. Hoyle) gave a general outline of the effects on council tenants of recent changes in housing policy and called for equal treatment and fairness. I should like to tell the House of what the general position has meant for tenants in Birmingham, particularly those in the Northfield constituency.
I have already referred to the increase in rents compared with the increase in the RPI. The RPI is heavily weighted by the impact on mortgages. Therefore, the recent reduction in mortgages as a result of the reduction in interest rates has relieved pressure on many of our constituents, but the reduction in the RPI is thereby even more loaded against council house tenants. That is why Labour Members echo the call by my hon. Friend the Member for Warrington for a one-year rent freeze so that we can achieve some sort of balance.
The background to this increase in rents has been a dramatic drop in the Exchequer subsidy. In 1980–81 the subsidy to Birmingham was £45 million. In 1981–82 it fell to £26 million, and, according to the figures for 1982–83, it will drop to £15 million. By next year, Birmingham, like most other housing authorities, will be out of subsidy. That is a massive reduction, which must be borne direct by the residents and rentpayers of Birmingham.
In a recent debate, in reply to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), the Under-Secretary of State said:
"Within the funds available nationally for housing, our priority had to be to safeguard capital investment … and thus curb the indiscriminate revenue support".—[Official Report, 21 October 1982; Vol. 29, c. 644.]
Although there are some differences between capital and revenue, that again reflects the Conservative Party's obsession with capital and revenue. In 1982–83, Birmingham will spend £6·73 million on starts. If, however, Birmingham loses £45 million and intends to spend £6·73 million, the argument about diverting money from revenue to capital sounds pretty thin.
The effects of the Government's housing policy are felt not just on the capital side, but on the maintenance side. In 1979–80 Birmingham spent £148 per dwelling on maintenance. It is now spending £217. That is a 46 per cent. increase, but it is well below the dramatic rent increase to which I referred earlier. As a result, repairs are not being carried out and properties are suffering from damp. That is especially true of system built housing.
In the recent debate the Minister made much play of a substantial increase in repairs, but many of those were the result of schemes adopted by the previous Labour administration in Birmingham. Many of those repairs also resulted from a catching-up process, because the
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Government's direct labour legislation substantially disrupted local authority direct works departments and the placing of tenders.
Mention has also been made of Airey system houses. On the south side of Birmingham there is a major problem with Smith built houses, for which the Department has said it will not give relief either to council tenants or to people who have bought those properties.
The city of Birmingham will complete only 214 houses in the forthcoming year, of which 190 will be for the elderly and 24 for the disabled. Not one family property will be completed in Birmingham this year, and that will have a massive effect on the 15,000 people on the waiting list.
Much has been said about people living in council flats, and many of them will now be condemned for life to live in those flats. Indeed, the number of points which two or three years ago would have obtained a house is no longer sufficient, and at the same time as no new properties are being built the council is selling the properties that exist—not only properties with sitting tenants, but empty properties as well.
The hon. Member for Woolwich, East (Mr. Cartwright) spoke of do-it-yourself allocations and of potential tenants finding the property. The tenants in my constituency are doing that, but when they contact the housing department they are told "We are sorry, the property may be empty, but it is already in the hands of the estate agents." A large number of empty properties in the city have already been sold, and many others are now in the hands of the estate agents. Therefore, do-it-yourself allocation does not work in Weoley Castle, especially in view of the response from the housing department.
Birmingham is a massive municipal authority with 132,000 properties under its control. I accept the need for devolution and decentralisation of those properties, but, as a result of the recession and Government and council rent policies, 88,000 of those tenants—seven out of 10—are on some form of housing assistance. It is ludicrous to suggest that they should now purchase those properties, especially as Birmingham has more high-rise blocks than any city in Europe.
It is unrealistic to talk of those tenants buying those properties, especially in view of the massive increase in rents. However, that is the attitude of the current housing chairman, who is so pleased that she has raised rent levels above the monthly mortgage repayment that she has written to tenants to that effect. There is, therefore, very little hope for such tenants, and the need for equal treatment is very much in the forefront of our minds.
There has been much talk about the inner cities. As I said in my maiden speech, Northfield is not an inner city constituency. It is among those areas that often suffer from higher deprivation than the inner cities. Such areas usually include an outer ring redevelopment area with massive housing estates, many of which have been system built, where the problems are even greater than in the inner cities.
The hon. Member for Folkestone and Hythe, among others, also referred to good and bad tenants. Many estates now suffer because bad tenants and, indeed, bad citizens are dumped in them. The fact that little control is exercised over such tenants is the result of the decline in the number of rent collectors and the breakdown of our society. Much greater attention must be paid to the problems of bad tenants. The Housing Act 1980 has not helped. Tenants

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should not be required to pay massive increases in their costs and rents, while at the same time they are being attacked on ideological grounds by the Government and by Birmingham city council, which reflects the Government's ideology. What I hope for, but do not expect to receive, from the Government is a new deal for council tenants, both nationally and in Birmingham.
6.9 pm
Mr. Mark Lennox-Boyd: I had not intended to intervene in the debate, but this morning I received a letter from the director of the Guinness Trust expressing the trust's deep anxiety about the way in which the provisions of the Housing and Building Control Bill might affect charitable housing associations. I declare an interest, in that my family has strong associations with the Guinness Trust. That is why I am so well briefed about the trust's anxiety.
The indignation expressed in the director's letter is surprising and persuasive, coming as it does from someone who has spent many years of his life quietly helping to provide good housing cheaply for others. The Government's decision to affect charitable housing associations in the way provided by the Bill is likely to lead bodies such as the Guinness Trust seriously to consider whether they should ever accept Government funds to supplement their own funds in paying for housing for poor people.
In 1974, when the provisions of the housing association grant were made available to bodies such as the Guinness Trust, many of the diehards—I know them all personally—expressed the fear that if they accepted such funds their independence would be compromised. In the end, the diehards' fears seem to have been proved correct. It is a salutary warning to any individual or body that craves independence never to take money from the Government.
The Government's proposals have led the trustees of the Guinness Trust to do an unusual thing—to join a pressure group called the National Federation of Housing Associations. I know all the people concerned, and that is an unusual and distasteful thing for some of them to do. My hon. Friend the Under-Secretary of State will know some of the people involved, and he may agree with me on that score if nothing else.
I appreciate that the provisions of the Housing and Building Control Bill do not affect all of the Guinness Trust property, but only that part which since 1974 has been constructed with the benefit of housing association grant. I appreciate also that the provisions do not affect that property for which exemptions are provided in the Housing Act by reason of accommodation being provided for the elderly and so on. Amongst all United Kingdom charitable housing associations, in addition to the Guinness Trust and including the trust's property, about 80,000 to 100,000 homes will be affected.
One point of criticism is that trusts such as the Guinness Trust are not Government agencies and the Government have no right to impose retrospective conditions upon them. Such trusts are not in the public domain. They are private owners of property held for the public good. The fact that they have received Government subsidies is not enough to bring them within the orbit of public ownership.
A housing association grant is different from other grants available to private individuals, such as improvement grants, subsidies and tax relief, none of
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which is recoverable. However, a housing association grant can, if the Government so wish, be repaid fully through the grant redemption fund.
The legal basis of charities causes considerable anxiety. They have a legal duty to obtain the best possible price for the properties that they sell, in the charities' interests. However, this legislation will require charities to obtain, not the best possible price, but a discounted price. That could establish a dangerous precedent, which may be used as an argument against many charitable institutions held dear by Conservative Members of Parliament and others who support the Conservative cause.
Housing associations are more adversely affected than local authorities—although local authorities have no reason to complain—because, once a property is sold at a discount and the housing association grant repaid, there will be precious little money left to increase the capital funds of the charitable housing association. They will not be in a position similar to local authorities, which can use renewed capital resources to build new houses to replace those that have been sold.
I urge the Government to be careful and not to go quite so far down this road as they intend. There are three areas of housing for rent—public housing owned by public authorities, private housing owned by private individuals and private housing for the public good, which is in the middle. It is private housing, because the charitable institution is both private housing and independent. If we go too far down that path, it will undoubtedly lead to a challenge to private owners. I hope that my hon. Friend the Under-Secretary of State can give us some assurance tonight. If he cannot, I hope that the matter will be reconsidered carefully and that we can look forward to reading about such a reconsideration in the Committee considering the Bill.
6.17 pm
Mrs. Ann Taylor: I congratulate my hon. Friend the Member for Warrington (Mr. Hoyle) on his good fortune in obtaining this debate. The House should be grateful to him for his choice of subject. He raised a matter that worries many people. He referred to tenants as the minority, but they are a substantial minority and it is important that we should discuss their problems seriously. My hon. Friend and hon. Members on both sides of the House, including the hon. Member for Morecambe and Lonsdale (Mr. Lennox-Boyd), highlighted the problems that face many tenants, both in the private and the public sectors.
The problems to which hon. Members referred have become much worse during the past three years because of the direct results of Government policies and because of deliberate Government decisions to weaken the position of tenants and harm their interests rather than to protect them. The protection of tenants should be a duty of the Department responsible for housing. That Department should have special regard for the needs of tenants because, by and large, they are the least affluent members of society in that they cannot afford to buy their homes.
I hope that the Under-Secretary of State realises the strong feelings, both outside the House and in this Chamber, about the proposals in the Housing and Building Control Bill. The hon. Member for Morecambe and Lonsdale mentioned some of the problems that we have been trying to explain to Ministers. I hope that the Under-Secretary of State will not ignore the arguments advanced

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by the hon. Gentleman tonight. The Bill cuts across charitable law and it is retrospective, because, when housing associations accepted money under the housing association grants, they did not realise the consequences.
I hope that his hon. Friends—the Members for Chipping Barnet (Mr. Chapman), Lichfield and Tamworth (Mr. Heddle) and Chichester (Mr. Nelson)—who are all, like the Minister, members of the Housing and Building Control Bill Committee, will have listened carefully to what the hon. Member for Morecambe and Lonsdale said. Labour Members will pursue those points closely in Committee and will probably quote what he has said today.
One of the reasons why we are debating this subject today—apart from my hon. Friend's good fortune—is that the Government's decisions have made life much worse for those in rented accommodation. One of the Government's first decisions was to halve spending on housing. Unfortunately, the Government are well on target for making such a cut. Housing spending has been reduced considerably. We are now seeing belated crocodile tears about the drop in capital expenditure, but a Government cannot announce cuts as large as those which were announced three years ago and later cry about the impact of those cuts.
Mr. Graham: This Government can.
Mrs. Taylor: The Government's intention to halve spending on housing was wrong, but what is appalling is the way in which the massive cuts have fallen mainly on the poorest sector—on those in rented accommodation who need help most.
We acknowledge that those who buy houses have been hit in the past three years. Although mortgage rats may be falling now, they have been at record levels. But when interest rates rise, so do the subsidies to owner-occupiers. That is not so for tenants. The Government have deliberately ensured that the brunt of all the cuts has had to be borne by tenants, and particularly those in the public sector. Under this Conservative Government, no group of people has been hit harder than the council tenants.
We need only consider rent levels to see one of the most important ways in which the Government have hit council tenants. In April 1979, the average council house rent was £6·40. In April 1982, it was £13·54. Tenants also have to pay £4 or £5 in rates, and many of them have substantial heating costs.
The Government have always said that rents had to be increased because they were low in 1979. It is true that rents formed a smaller proportion of the average income when the Labour Government left office in 1979 than they had in 1974. That is not surprising, as that Government had tried to help those most in need.
Even if rents were slightly lower in 1979 than when the previous Tory Government left office in 1974, we must consider the magnitude of the increases in the past three years. The doubling of council rents in those years has not simply restored rents to their previous high, Tory, level. There have been massive further shifts, and rents as a proportion of income are now higher than they have ever been. That is a clear result of Government directives. Each year the Secretary of State for the Environment has stated by how much rents should be increased, and has forced local authorities to increase them. The Government have
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deliberately forced rents up to the highest ever level, both in money terms and as a proportion of income. We should consider, as some of my hon. Friends already have, what tenants have had in return.
Have services to tenants improved? No. Have repairs been carried out more effectively? Certainly not. Have modernisation programmes been accelerated? No, of course not. In many areas, repairs and services have deteriorated, and in some areas they have reached crisis point. As a result of all the pressures that the Government are putting on local authorities, tenants are now paying more and getting less.
In the past few years the general level of subsidies to tenants has fallen dramatically as the level of rents has increased, whereas the subsidy to owner-occupiers has continued to rise. An examination of the balance of subsidy shows that over the past few years council house tenants have suffered considerably. The official Opposition would maintain the level of income tax relief on mortgage payments for those who are paying tax at the standard rate, but we believe that it is unfair to give so much help to those who are buying a capital asset, while penalising those who pay rent week after week for the whole of their lives. The present balance of subsidy is wrong, and the figures show how wrong it is.
In the current year, the subsidy per tenant in the public sector is now running at £287, according to recent answers to parliamentary questions. A person who is buying his own house on mortgage gets, on average, £375 tax relief per year, so the person who is buying a home gets far more subsidy than is received by the person who is living in a council house.
Given the level of rent increases, it is no wonder that the Minister for Housing and Construction was able to boast recently that, after discounts, many tenants would now find it as cheap to buy their homes as to continue renting them. That is the point that my hon. Friend the Member for Birmingham, Northfield (Mr. Spellar) mentioned earlier. Some councils have deliberately forced up rents to such a level that council tenants would be better off buying their own homes. It is all part of the Government's drive towards the sale of council housing, which seems to be the principal objective of their housing policy.
The high rent policy that the Government are now pursuing will raise some awkward questions for the Government in the long run, and eventually Ministers will have to answer them. Already this year about 100 councils are transferring housing surpluses to subsidise their rate fund—in other words, council tenants are paying to keep the rates down.
The case of east Cambridgeshire, which has had a great deal of publicity, is becoming well known. It now gets more income from profit on its council house rents than from its entire rate bill, both business and domestic. I do not want to dwell on that case because the finances in east Cambridgeshire are somewhat exceptional, but there are other authorities which are also making a profit out of their housing revenue account.
The Minister for Housing and Construction is with us this evening. This year the Tonbridge and Mailing district council, in his own constituency, is transferring £861,000 of profit from its housing revenue account to the rate fund. The Secretary of State for the Environment represents an area in south Oxfordshire. The council there is transferring £481,000 worth of profit from its housing revenue account

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to subsidise the general rate fund. Those examples may be somewhat exceptional but I think that more authorities will be placed in that position next year and in future years, and council house tenants will increasingly be subsidising the general rate fund.
I am told that computer runs that have been done by the Department of the Environment show that if there is a £1 rent increase next April, not just 100, but 308 out of 367 local authorities will go into surplus on their housing revenue accounts. Therefore, in all those councils the general rate fund will be subsidised by profits that are being made out of council house tenants. That is unacceptable. I should like to know how the Government justify that. We have had no assurances from Ministers that that situation will not continue and worsen. When they talk about council house tenants being subsidised they should bear in mind how much subsidy council house tenants pay to everyone else. The least affluent people in our society are subsidising the general ratepayers.
Mr. Joseph Dean: The figures that my right hon. Friend has quoted are a revelation. Does not that mean that the people who are meeting the full charge of their rent—just over 50 per cent.—are supplying the subsidy to the ratepayers?
Mrs. Taylor: My hon. Friend is right. Because of the general level of rent increases and the increased incidence of unemployment, more people have to claim some kind of rebate. That means that the tenants who are paying the full amount of rent—the unrebated rent—are subsidising everyone else and carrying the full burden of all the increases that the Government have been making.
I hope that in future when Conservative Members speak about council house tenants they will acknowledge both that those tenants pay so much in subsidies to other tenants who receive rebates, and, more importantly and increasingly, that they are subsidising the general rate fund. I wish that Conservative Members would acknowledge that. I do not expect them to explain it, but I wish that they would acknowledge it.
My hon. Friend the Member for Warrington mentioned some of the things that were necessary to help tenants out of this situation. He mentioned a rent freeze and a better deal on repairs and services. The Opposition are committed to those things. It is essential for us to change people's attitudes to council tenants and acknowledge the need for equality of subsidy and of status. Conservative Members should stop talking about council house tenants as subsidised people.
My hon. Friend also mentioned the private rented sector. Nothing effective has been done to alleviate the problem of that sector, which contains some of the worst housing and some of the poorest households in the country. We have heard mention of the rapid decline of the private rented sector. It is true that that sector has declined recently. I hope that it will decline more in future.
Mr. Heddle: No.
Mrs. Taylor: I said that I hoped that the private rented sector would decline more in future. There is no way in which the interests of the private landlord and a fair deal for the tenant can be reconciled. The fact that that sector is bound to decline in future does not mean that we can ignore the difficulties of the 2 million households that remain in the private rented sector. Everyone knows that
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some of the worst housing is in the private rented sector. The recently commissioned survey by the Department of the Environment in Sheffield proved that many houses in the private rented sector lack basic amenities. We all recognise that major disrepair is a significant problem in the private rented sector.
Mr. Chapman: Of course, there is property in a serious state of disrepair in the private rented sector, but not all such property is in that sector. Is the hon. Lady saying that, because some such property is in the private rented sector, that sector should be finished?
Mrs. Taylor: No. Perhaps the hon. Gentleman misunderstood me. I acknowledge that there is poor property in other sectors. The private rented sector has a disproportionate amount of poor property. That sector has no long-term future, not because of the condition of the property, although that is one factor, but because the landlord's need for profit and the tenant's need for decent housing at a reasonable level of rent cannot be reconciled.
The Government have blamed the decline on the Rent Acts. That was one of the points that the hon. Member for Chipping Barnet mentioned. He should look at the Select Committee on the Environment's report on private rented property. It is not the Rent Acts or the present security of tenure that put off private landlords. The Committee's evidence shows that, especially in areas such as London, a high proportion of landlords know their way round the Rent Acts. Bogus holiday lets show how easy it is for people to abuse the Rent Acts.
One of the reasons why shortholds have proved to be such a failure is not, as hon. Members would have us believe—and which I wish was the case—that my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) has the power to say that, because we shall repeal them, no one will take them on now. His powers may be persuasive and some people may not go into shortholds because of that, but there are many other ways of getting round the Rent Acts. People have found other dodges. Many of them do not require shortholds to abuse the system in the private rented sector.
All of us in the Opposition could give the Minister many examples of abuse in the private sector. Recently there was a court case when a letting was claimed to be furnished because there was a charge of £1·25 for the use of the linoleum. Such abuse in the private sector is rife. Conservative Members have not mentioned it. The next Labour Government intend to tackle that abuse so that all the present loopholes can be closed.
Mr. Hoyle: Does my hon. Friend agree that her points and the points that have been made by Opposition Members need a reply from the Minister?
Mrs. Taylor: Yes. I hope that the Minister will reply to our points. I suspect that this is what my hon. Friend is getting at. I doubt whether the reply will be adequate. The Government do not realise the full consequences of their action. The Government cannot decide to cut spending on housing in half and expect to have no problems. They cannot pretend that all their so-called new initiatives make up a housing policy.
My hon. Friend and others have shown today that tenants in the private and public sectors have had a raw deal from the Government. They have been treated as second-class citizens. The Government have waged a

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vendetta against tenants. If the Government will not give equal treatment to tenants by supporting my hon. Friend's motion, tenants can have no hope of any help from the Government and they can only look forward to a change in Government, which will give them a better deal.
6.38 pm
The Under-Secretary of State for the Environment (Sir George Young): The Government very much welcome the opportunity that the motion tabled by the hon. Member for Warrington (Mr. Hoyle) provides to set out the substantial progress that the Government have made to improve the lot of tenants and to widen their housing expectations. Our policies are based, not on the paternalism of many Opposition Members, but on enfanchising the tenant where possible and giving him a greater say in the management and control of his environment. Our policies are much more in tune with what tenants want than are those of Opposition Members.
The motion begins by calling attention to tenants' rights. I shall remind the House of the rights given to public sector tenants by the Government in the Housing Act 1980. Before that measure was passed, security of tenure was a matter of great concern to public sector tenants. The scales were balanced heavily in favour of public sector landlords when they acted to terminate tenancies and obtain possession orders. Tenants had a limited defence against such action. Landlords could seek and obtain possession orders based on the flimsiest of reasons and, in theory, without giving any reason. In creating secure tenancies and limiting the grounds on which the court may order possession, a proper balance between landlord and tenant has been achieved and the ability for a tenant to challenge his landlord in a possession case before the court has been established.
Until the passing of the Housing Act 1980, the right of a tenant's family to succeed to the tenancy on the death of the tenant did not exist. It was left to the discretion and decision of the public sector landlord, and on occasion the family of the tenant, who might have been born in the house and lived there all their lives, faced eviction or transfer to some other house or flat because there was no right of succession. The right of succession now exists as part of the Government's tenants' charter.
The charter predates this Parliament. The Conservative Party attempted to introduce such a charter when it was in Opposition. My hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre), who is now the Under-Secretary of State for Transport, introduced a Bill on 1 March 1977. It received its Second Reading on 13 May of that year. I happened to take part in the debate, and perhaps I shall be forgiven for quoting the final three sentences of my remarks. I said:
"I gather from listening to speeches made by Labour Members that some of them are minded to oppose the Bill. If so, that will be bitterly resented by millions of council tenants throughout the country, who will rightly interpret such opposition as resistance to giving them a greater say in how they manage their affairs. The Labour Party has problems enough on council estates without being further handicapped by an intransigent and paternalistic approach, which is what would happen if Labour Members voted against the Bill."—[Official Report, 13 May 1977; Vol. 931, c. 1801.]
That is exactly what they did and the Bill was defeated.
The Housing Act 1980 put the charter on the statute book. The right to take in lodgers was also established, and
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provision for sub-letting with a landlord's consent has been created. Before the passing of the 1980 Act it was apparent that a tenant's freedom to carry out improvements to his own dwelling, even to the limited extent of painting his front door, was limited by pettifogging restrictions that were insisted upon by the landlord. The right of a tenant to carry out improvements to his home and for consent not to be unreasonably withheld by his landlord was also established, together with the right of access to improvement grants.
An examination of tenancy agreements revealed a pretty sorry state of affairs. These were agreements of a sort that had not been reviewed for many years. They were riddled with restrictions on tenants and their families. Some had rules about times of the day when sticks could be chopped to light the fire—perhaps 15 years after the house had been converted to gas central heating. We introduced a right for tenants to be provided with information about secure tenancies and a written statement on the terms of such tenancies. My hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) mentioned many of the other tenants' rights that were introduced in the 1980 Act. The Act has been a major contribution in improving public sector tenants' standing, changing landlord-tenant relationships and improving tenants' freedom.
In many minds the most important tenant's right is that of the right to buy. Not once in a 25-minute speech did the hon. Member for Bolton, West (Mrs. Taylor) mention the right to buy, which in the view of most hon. Members is the most significant right that tenants have been given this century.
The Government have done more than any previous Administration to recognise the desire for home ownership and to enable people to realise that ambition. Our policies have been given further impetus by our success in reducing mortgage interest rates to their lowest level since November 1978. We have given local authority tenants, new town tenants and certain housing association tenants the right to buy their homes at discounted prices. We have given them a right of access to mortgage finance to ensure that their right to buy is a reality and not an empty promise. In doing this we were honouring a major manifesto pledge.
The response has been truly remarkable. We estimate that by 30 September about 425,000 tenants of local authorities, new towns and housing associations in Great Britain had bought their houses since the Government were elected, either by means of the right to buy or through voluntary sales. This is a massive response and a vindication of the Government's policies. Other parties may theorise about equality and the redistribution of wealth, but the Government are doing something about it. The spread of home ownership has been the one most important factor in extending wealth holding over the past 30 years, and our policies will give that trend a fresh impetus.
There are wider benefits, too, besides those for the individual purchaser. There is evidence that on the whole owner-occupied houses are better maintained, age for age, than are houses rented from either private or public landlords. There is normally a greater ease of mobility in the owner-occupied sector, though we are taking steps to improve it in the public sector. There are social advantages in mixing forms of tenure rather than having areas of cities consisting of nothing but council housing. For the local

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authorities there are the capital receipts that they obtain from sales, 50 per cent. of which can be used directly to supplement their housing investment allocation.
On this, the most important right that any tenant can have, the Labour Party has pronounced. The hon. Member for Bolton, West, when she addressed the House on the Housing and Building Control Bill's Second Reading, said:
"I am happy to tell the Secretary of State that we are committed to the repeal of the right to buy. We shall say so in our election manifesto."—[Official Report, 23 November 1982; Vol. 32, c. 730.]
The Labour Party has done nothing over the past three and a half years. It has learned nothing from the large swings to the Conservative Party in the new towns, in places such as Birmingham, Northfield and in the large estates on the outside of London which have been run by Labour authorities. In a desperate attempt to turn back the clock, it is revealing that it is out of touch with what ordinary people want.
Mr. John Spellar: It was the swing from the Conservatives in Northfield that led to me replacing a Conservative.
Mr. Peter Bottomley: Come off it, John.
Sir George Young: The largest swing to the Conservative Party in the May 1979 election occurred in Northfield, a constituency in which there are many tenants who are greatly attracted by the Government's right-to-buy policy. The hon. Gentleman should watch out for his prospects at the next general election if he endorses his party's policy on denying tenants the right to buy.
Some hon. Members have talked about repairs. My hon. Friend the Minister for Housing and Construction has today answered a parliamentary question that was tabled by my hon. Friend the Member for Reading, North (Mr. Durant), in which he commends local authorities on the imaginative scheme which has been established by the London borough of Havering, in which tenants' rent accounts are credited in respect of repairs that they do for themselves. If new clause 1 is reached in our consideration of the Housing and Building Control Bill in Committee, we shall be dealing with that in a Government measure.
The Housing and Building Control Bill, which my right hon. Friend the Secretary of State introduced last month, extends the right to buy in three ways. First, it includes significant groups of tenants who remained outside the entitlement that was granted by the 1980 Act as well as those who have not been able to afford to exercise their right to purchase their homes outright. It brings within the scope of the right to buy 50,000 secure tenants of local authorities, new towns and housing associations whose landlords do not own the freeholds of their dwellings but who would otherwise qualify under the terms of the 1980 Act. These tenants will be given the right to buy the lease of their homes provided that their landlords' interest in the property is sufficient to grant a lease of not less than 22 years for a house and not less than 50 years for a flat.
I know that these developments will be of interest to tenants in Bolton. My Department received the following letter from someone who lives in Victory Road, Bolton:
"Recently I applied to buy the house, but my application was turned down by the Council which is Labour-controlled, on the grounds that they do not own the freehold. I am not satisfied with this, as the house adjoining to mine is under the process of being
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bought, and it is only since the Council became Labour-controlled that these weak excuses have been given. I have spoken to our local Conservative councillor Mrs. Millicent Lawton and she has advised me to write to you, as our local MP is Labour. I am quite prepared to buy the freehold if it is available for sale, but on enquiries to our town hall no one will tell me who owned the land … Please could you help or advise me because I want to fight the decision of the Council."
Help is on the way through the Housing and Building and Control Bill.
Mrs. Ann Taylor: Will the Minister acknowledge that he can talk about tenants getting out of the tenanted sector and trying to buy their own housing only because the Government are offering them nothing and giving them a raw deal as tenants?
Sir George Young: I outlined at the beginning of my remarks the tenants' charter, which Labour Members voted down when they were in Government. Although they said that they would introduce a charter, there was nothing on the statute book by 1979. If the hon. Member for Bolton, West provokes me any more, I shall read out more letters from others of her constituents who are dissatisfied with her representation of them in the House.
Secondly, we are extending the right to buy to about 80,000 tenants of charitable housing associations and trusts whose homes have been provided wholly or substantially from public funds. We believe that it is unfair to deny the opportunity—perhaps the only chance that they will have to buy a home—to tenants of dwellings that have been provided out of public money and that are directly compatible with the housing stock of other housing authorities and non-charitable housing associations.
My hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) made clear his reservations, and my hon. Friend the Minister for Housing and Construction hopes shortly to make a speech on this topic in Committee. I am sure that he will take on board the anxieties expressed by my hon. Friend.
Thirdly, we are creating a new right to shared ownership. Many thousands of tenants, who have the right to buy but who cannot afford to buy their homes outright, will be given the opportunity to purchase an initial share of not less than 50 per cent., while continuing to pay rent on the outstanding share. They will then be able to proceed to full ownership whenever they wish by buying further shares in 12½ per cent. slices. In this way many tenants will be given a chance to get a firm foothold on the home ownership ladder, taking on the full financial commitment as time and resources allow.
As well as these three major extensions of the right to buy, we are taking the opportunity in the Bill to help those who are already seeking to exercise their right to buy by removing various uncertainties and anomalies and by dismantling the several obstacles which a narrow-minded minority of landlords have sought to throw up in the path of claimants, in the desperate attempt to deny them their legal entitlement.
The Government have also initiated a large number of low-cost home ownership schemes to try to take home ownership further down the lower income scale. We have promoted a six-point low-cost home ownership programme. I am happy to say that since we came to office more than 19,000 families have become home owners through one or other of these measures. Many of them would not otherwise have had such an opportunity.
Mr. Joseph Dean: In the few minutes that the Minister has left, will he answer some of the points raised by Labour Members instead of merely answering the points raised by his hon. Friends?
Sir George Young: A large number of Labour Members made suggestions about the private rented sector, with which I shall now deal. If I have time later I shall try to deal with some of the matters that the hon. Gentleman raised on Airey houses and some of the points that he made about Leeds.
The motion calls on the House to express disgust at the Government's treatment of tenants in the private rented sector. No treatment can have been more appalling than that dished out by the Labour Party, whose antagonism towards this sector of the housing market is clearly on record, and whose Rent Acts, by deterring landlords from letting, led to a decline in the role of the private rented sector in meeting housing need. My hon. Friend the Member for Chipping Barnet (Mr. Chapman) made this point in an intervention.
In the Housng Act 1980 the Government took a number of measures to make more privately rented accommodation available. If there is to be any disgust expressed, it should be at the Opposition's efforts to hamper the full effect of these initiatives by threatening to repeal shorthold. The 1980 Act also introduced a whole host of improvements to the rights of private sector tenants.
The hon. Member for Warrington advocated municipalisation of private rented stock, and from a sedentary position the right hon. Member for Manchester, Ardwick (Mr. Kaufman) indicated his assent. Do they propose to confiscate the property, or will they compensate the people from whom they take it? If so, that will involve them in a substantial amount of public expenditure, for no housing gains. It will provide no jobs and no new homes for tenants. If there is one sure way of drying up possible extra investment in housing from the private sector, it is to issue the threat of municipalisation, which will be bad for jobs and tenants. My hon. Friend the Member for Folkestone and Hythe (Sir A. Costain) made this point.
One or two Labour Members have been talking about figures and have endeavoured to show that the Government have been favouring the home owner at the expense of the tenant in the assistance that they give. It is of course all too easy to allow oneself to be deceived by the comparisons made and the numbers quoted. It has long been recognised that there are many contentious items which some would include and others would exclude in this particular numbers game.
The last Labour Government in their Green Paper on housing warned all those attempting the comparison of assistance to home owners and local authority tenants:
"There is no objective basis for deciding these questions".
No doubt this advice will temper the certainty with which Labour Members announce their conclusion to the matter.
If one takes account of the various forms of assistance for housing, costs coming from the public purse, inclusive of supplementary benefit, the figure for the average tenant household is about £485 per annum, and that for the average owner-occupier household £205 per annum—[Interruption.] These figures are not nonsense, they are the truth.
I hope that this removes any misapprehension that the Government are directing a disproportionate amount of
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their assistance away from tenants toward owner-occupiers. Tax relief on mortgage interest payments is widely recognised as a most effective means of encouraging and supporting home ownership. I am glad of the opportunity therefore to repeat the assurances given by my right hon. Friend the Prime Minister that there is no truth whatever in reports that this Government are considering the abolition of tax relief on mortgage interest, and that there will not be any truth in it as long as she remains First Lord of the Treasury.
One or two hon. Members spoke about council house rents in such a way as to suggest that they had not been charged before we took office. We are now familiar with the tactics employed by Labour Members. They point to the increases in council house rents over the past three years and conveniently ignore what happened beforehand. That is hardly surprising, for the last Labour Government professed a policy of rents moving broadly in line with money incomes. In practice, they allowed rents to fall well behind. That was the position that the Government took over. As a result of rent increases since we took office, rents in relation to earnings are now at about the same level as that which the last Labour Government inherited from us. We have done the job that they said they would do.
In the previous Labour Government the policy set out by the Chief Secretary to the Treasury was summed up by this:
"I believe that we are right to plan in the longer term for the proportion of housing costs to be borne by rents to grow from 43 per cent. in 1976–77 to 50 per cent. by 1980."—[Official Report, 10 March 1976; Vol. 907, c. 453.]
However, by 1979–80 the position inherited by this Government was that rents on the basis that he used accounted for only 38 per cent. of costs. My hon. Friend the Member for Grantham (Mr. Hogg) raised a rather upmarket point about the Housing Act 1957, but it is probably best if I try to deal with this point in writing.
With regard to Airey houses in Leeds, the Government will take into account the costs that Leeds will have to bear to put it right when they come to calculate the HIP allocations of the years in which the expenditure will fall.
Perhaps I can write to my hon. Friend the Member for Chipping Barnet in response to his four suggestions.
The hon. Member for Wolverhampton, South-East (Mr. Edwards) urged the Government to adopt an imaginative approach to the problems and called for partnership. The last example of this that I should like to give is what the Government are doing on the Cantril Farm estate in Merseyside. This is a major experiment that can demonstrate a new way to rescue severely rundown council housing estates.
The problems of Cantril Farm are rooted in its poor design. Vandalism has grown, some families have drifted between empty flats, rent collection has become difficult and arrears have grown alarmingly. Our approach to this is to set up a trust involving private developers, local tenants and the local authority to try to tackle these problems with the benefit of public and private investment. We have been enormously encouraged by the response of tenants on the estate to this new solution. A major programme of housing and repair will be executed by the trust, but it will be related to environmental schemes aimed at creating a more attractive and secure environment.

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I hope that I have said enough today to demonstrate that the welfare of tenants has been, and will remain, one of the principal concerns of the Government's housing policy. Our record of achievement so far is one of which we can be proud. Few Governments can claim to have done so much to improve the well-being of tenants, expand the range of housing opportunities before them, and give them a say in the management and maintenance of their environment.
The only right that Labour Members appear to be interested in is the alleged right of a tenant to remain a local authority tenant, often against his will, in a property run by a remote, paternalist authority. That is a philosophy that the Conservative Party decisively rejects.
6.59 pm
Mr. Hoyle: I thank all hon. Members on both sides of the House who joined the debate. It has been an interesting debate, and I am only sorry that the Minister did not see fit to reply in a constructive way. He did not allay the fears of tenants. What I gathered from his remarks shows that I am right and that the vendetta will continue. Nothing that the Minister said will enable tenants to hope that they will get a fair deal. He could only concentrate on the selling of houses, which will not solve the problem.
However, it was right to air this problem today. The fact that we have had this debate was in itself well worthwhile. But, since we have had the debate, I hope only that the Government will allow time for a longer one. In view of that, I beg to ask leave to withdraw the motion.
Motion, by leave, withdrawn.

Orders of the Day

  Electricity (Financial Provisions) (Scotland) Bill
  Considered in Committee
  [MR. PAUL DEAN in the Chair]

  Electricity (Financial Provisions) (Scotland) Bill
    Clause 1

      BORROWING POWERS OF SCOTTISH ELECTRICITY BOARDS
      Motion made, and Question proposed, That the clause stand part of the Bill.
      7 pm
      The Second Deputy Chairman of Ways and Means: With this motion we are to discuss new clause 1—Disconnection of electricity supply—
      Part of the increased borrowing powers referred to in section 1 shall be used by the Scottish electricity boards to avoid disconnections of electricity supply to households where such disconnection would result in hardship.
      The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): The purpose of the clause is to increase the statutory limit on borrowing of the Scottish electricity boards from £1,950 million to £2,700 million, with an interim figure of £2,300 million. As in the past, these limits have been fixed to meet the boards' needs for periods of about three years at a time, and the interim figure is subject to an affirmative resolution of the House.
      The boards' capital investment programmes must be approved by my right hon. Friend the Secretary of State for Scotland, and his specific consent is required before expenditure is incurred on any new power station. All borrowing requires his consent and the approval of the Treasury.
      Mr. Dennis Canavan: On Second Reading the Minister said that the increased borrowing powers referred to in the clause would be largely used up by the Torness power station, and he gave me a figure for the total budget for the power station of £1,097 million. But, of course, that figure is based on March 1980 prices, and obviously it must be updated. Hon. Members on both sides of the Committee will agree that that is a very large sum of money to be spending on one nuclear power station.
      It so happens that on Friday of last week, between Second Reading and this debate, I and some of my colleagues in the Scottish parliamentary Labour group had an opportunity to visit Torness, where we discussed the project with the chairman of the South of Scotland electricity board and some of his colleagues. To be fair, I think that anyone who has visited the site must be impressed by what will be a tremendous achievement of science and engineering. But I could not help thinking of the great assistance that could be provided to many consumers of electricity in Scotland if even a fraction of the sum being spent on Torness power station was used to assist consumers either with their electricity bills or by way of lower prices for electricity or, indeed, by introducing a massive programme of home insulation in

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      both the public and private sectors, which would have the useful by-product of providing jobs for many unemployed construction workers. Unfortunately, because of cuts in public expenditure, we are not seeing a home insulation programme of the size that we ought to have in Scotland.
      Even before Torness is completed, there is an overcapacity of generation in Scotland, and the Minister has not explained adequately the Government's priorities on expenditure or how all the increased public expenditure referred to in clause 1 will be used. In the new clause I suggest that at least some of the increased expenditure proposed should be used to help the many families who have been disconnected or threatened with the disconnection of their electricity supply. It is a widespread problem in Scotland which is causing a great deal of hardship and misery, and the Government seem to be doing little if anything about it. I raised these matters on Second Reading. I did not get an adequate reply from the Minister, and I am grateful for the opportunity to discuss them in this debate.
      To those hon. Members who thought that I was exaggerating about the extent of the problem in Scotland it must be pointed out that the rate of disconnection in the area of the South of Scotland electricity board alone is running at about 1,000 a month. I understand that the corresponding figure for the North of Scotland hydro-electric board is about 260 per month.
      Mr. Norman Hogg: I am sure that my hon. Friend will agree that the figure for the North of Scotland hydro-electric board is significant when account is taken of the fact that that board provides electricity for only 2 per cent. of the nation's consumers. That makes it a high figure.
      Mr. Canavan: My hon. Friend is right. We have to look at the figures in terms of the populations in the areas concerned and the number of electricity consumers there. I shall come later to a comparison between the Scottish boards and what is happening south of the border.
      The number of households disconnected at any time in Scotland is considerably higher than the figures I quoted. The earlier figures related to the number of disconnections per month. To give an idea of the number of families remaining disconnected, I can tell the House that during December of last year 3,700 families remained disconnected during the coldest recorded winter this century. Of those, 80 per cent. had been without a supply for a month or more. The Policy Studies Institute pointed out that 90 per cent. of those disconnected were mentioned specifically in the code of practice but that, despite the existence of the code of practice, there appeared to be no real protection for many of those families. I know that the Government pay lip service to the code of practice and have even tried amending it to produce what they describe as slight improvements. However, the problem remains, despite the alterations in the code.
      I have in my possession one of the most recent leaflets on the subject. It is quite a good one. It is fairly understandable. Some leaflets issued by the Civil Service and public corporations are difficult for ordinary people to understand. This one is fairly clear. But I suggest that some people reading it may be given a false sense of security.
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      Some of the categories in the code of practice include people receiving supplementary benefit or unemployment benefit. It also includes cases where
      "all the people in the house are Old Age Pensioners".
      It also includes people who are
      "blind, severely sick or disabled",
      and cases where there are
      "children under 11 years old"
      or where people in the house are receiving family income supplement. Those are all very deserving categories. They include people who are suffering from some disability, or people who are suffering financial hardship. Nevertheless, as I said, 90 per cent. of the people disconnected fell into the categories which were specifically mentioned in the code. Therefore, the code is hopelessly inadequate, and it is up to the Government to take much firmer measures, and to take them urgently, to deal with the problem of fuel poverty.
      Mr. Russell Johnston: I am not sure what the hon. Member's criticisms of the leaflet are. He told us what was in the leaflet, but he did not tell us his objections to it.
      Mr. Canavan: The leaflet says that it is "a code of practice". People looking through it may see that they fall into a special category and therefore assume that they will get protection. I shall come to specific cases later. There is nothing wrong with the leaflet in itself, but the code of practice should be toughened up and, if necessary, statutory protection should be given to the categories of people which are mentioned in the leaflet.
      I am told that about 30,000 people are at present on the fuel direct scheme in the South of Scotland electricity board area alone. That, too, shows the difficulty that many families on low income now face in trying to pay their electricity bills. Those families have opted for, or been advised to go for, the scheme whereby their fuel is paid directly by the Department of Health and Social Security, by deductions from their benefits. It shows, too, the difficulties that many people are facing as a result of the escalating price of electricity. Since 1974, electricity prices have increased about four and a half times. Of course, the Minister will tell us that many other things have increased since 1974. However, even taking inflation into account, I am informed that electricity costs 47 per cent. more in real terms than it did eight years ago.
      I come now to the comparison that I mentioned earlier between Scotland and England. It takes 20 per cent. more fuel to heat a house in Glasgow that it does to heat a similar house in the south of England. In the north of Scotland—for example, in Aberdeen—it takes 30 per cent. more fuel to heat a house than in the south of England. Clearly, for climatic reasons, the average consumption in Scotland is much higher. It works out at 5,500 units per annum in the South of Scotland electricity board area and 6,500 units per annum in the North of Scotland hydro-electric board area, whereas in England the average is only 4,000 units per annum. Thus, Scottish consumers have to burn more electricity to be reasonably comfortable in their homes, although there seems to be no Government compensation for the more extreme climatic conditions that exist in Scotland. It is not surprising, therefore, that the number of disconnections in Scotland is considerably higher than in most of the English areas.
      Mr. William McKelvey: It may assist my hon. Friend to realise that I wrote to the Minister about the climatic differences between England and Scotland and received a reply saying that there was no difference.
      7.15 pm
      Mr. Canavan: That is typical of the Minister. When he gets off the plane in Scotland, he does not seem to realise that it is a bit colder. However, perhaps he is so thick-skinned that he does not realise the difference. One does not need a thermometer to realise the difference.
      I was speaking about the percentage of domestic consumers who had been disconnected. Unfortunately, I do not have the most up-to-date figures for the breakdown. The figures that I have are for 31 March 1981. They showed, that the percentage of disconnections in the SSEB area was ·55, the North of Scotland hydro-electric board area was ·49, whereas for the North-East of England the figure was ·28, the North-West ·27, South Wales ·29, the South-West ·18, the Southern area ·13, and the South-East ·16. So there are significant differences in the proportion of homes that have been disconnected in Scotland compared with south of the border. Unfortunately, my figures are not as up-to-date as I should like. I hope, therefore, that the Minister will give us the up-to-date figures to see whether the situation has improved.
      I come now to some individual cases. On Second Reading last week I mentioned the case of a single parent in my constituency, with a young child, whose electricity had been disconnected. She came to see me and I managed to get the electricity reconnected later the same day. Why should people have to come to Members of Parliament? I do not mind helping constituents who are in difficulties, but it shows that there is something wrong with the system. In that instance, there had been a breakdown in communications between the statutory authorities, and I managed, through the fuel direct scheme, and so on, to get an arrangement to repay the debt by instalments. I suggest that it is often against the interests of the electricity boards to disconnect customers. It would often be more in the boards' interests to reach some agreement with the consumers to get debts repaid in instalments. Through lack of communications, often someone appears, armed with a piece of paper, and has authority to break down the door if the person is not in. There is something wrong with the system if that can happen. A local authority would not be allowed to treat its tenants in that way. We debated tenants' rights earlier this evening.
      Mr. Tim Eggar: How many times has the electricity board normally tried to contact the non-payer before such action is taken?
      Mr. Canavan: The electricity board would have the best people to answer that question.
      I shall give some instances of disconnections. There are warning notices, and so on, but they may go astray or be misinterpreted. Sometimes people are so terrified that they are unwilling to tell the people in authority that they do not have the money to pay the bill. Many people are so poverty stricken that they are ashamed of it, and that is part of the problem.
      In the recent case that I have just mentioned concerning my constituent I was able to have the electricity supply switched on again. However, there was no need to switch off the supply in the first place. The very fact that the board
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      switched it on again at my intervention seems to show that at one level it agreed with me although at another level a man went out to disconnect the supply on the instructions of someone within the board.
      That case is by no means unique. Strathclyde regional council gave me some similar documented cases which had been passed to it by its social work department. One was of a Mr. X, a landlord with four sub-tenants, operating a prepayment meter for their electricity supply. A bill of £770 accrued but Mr. X could not be found. The supply was disconnected in breach of the code leaving three pensioners and one student without lighting or electrical facilities. One pensioner died before the supply was reconnected on the Tuesday, following the Friday disconnection. The supply was reconnected when the attention of the SSEB was drawn to the fact that a new code of practice had been issued which prevented the disconnection of tenants for a landlord's debts.
      Another case was of a Mrs. E, a recovering alcoholic. With social worker's support she intended to re-establish her family home after its disconnection for two years. She applied for a prepayment meter with suitable calibration in order to pay back the arrears but was told that she must pay £100 before it could be connected. She could not afford £100 so she did not get her prepayment meter.
      The SSEB seems reluctant to install prepayment meters. We hear of it refusing to give prepayment meters in areas which it considers to be a bad risk because it is afraid that the house will be broken into and the money stolen. What right has the SSEB or the North of Scotland hydro-electric board to discriminate against tenants just because they live in a particular area? It would be in the better interests of the electricity boards if they could accommodate their consumer's choice of prepayment meters. I know of several cases in my constituency of people who are now managing to pay off debts by using suitably calibrated prepayment meters.
      I want to deal with some of the options that have been mentioned. It is all very well criticising the existing system. I am sure many hon. Members will be getting to their feet and doing the same. However, I am not merely a negative critic. I always believe in looking at positive alternatives. One option which has been suggested is that there should be no disconnections without a court order. Earlier, I drew attention to the parallel between local authority tenants' rights and electricity consumers' rights. No housing authority in Scotland could evict a tenant without a court order, yet the electricity boards are apparently able to disconnect supplies without one. Often, the loss of an electricity supply can be almost as bad as the loss of a roof over a person's head. I hope that the Minister will comment on the possibility of introducing amending legislation in order to prevent disconnections without a court order.
      Another suggestion is that there should be a statutory code of practice, not just a piece of paper, albeit an easily read and readily understood one. For some people, this code is not worth the paper it is written on because it does not give adequate protection to those whom it is meant to protect. Will the Minister consider the possibility of a statutory code of practice for the electricity boards? If the Department of Energy is too bone idle or unwilling to make the necessary provisions, why on earth cannot the Scottish Office for once be in the vanguard of progress instead of following in the wake of all the silly decisions that are taken by Departments here in London? I am sure

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      that even the Minister, whom I have criticised on odd occasions, would be praised by people like myself if he were seen to be taking initiatives along those lines.
      Another suggestion is that fuel-direct plans should be more widely available, not just for those receiving supplementary benefit but other benefits as well. I know that strictly speaking that is not within the Minister's remit, but in the light of collective responsibility I hope that he will have something constructive to say about that suggestion.
      In some cases the debt which has been run up is so large that we must face up to the fact that it will be virtually impossible to repay it. I have heard of some cases where, under the fuel-direct scheme, it would take about 20 years to repay a debt. In such cases it would be as well to be realistic and write the debt off if there are special circumstances and give consumers a fresh start rather than that they should have such huge debts round their necks, perhaps for the rest of their lives.
      As I have mentioned, prepayment meters are often not as widely available as they should be. The electricity boards say that they will be made available where it is safe and practicable to do so. Will they consider giving them to consumers on request unless there are absolutely compelling reasons why they should not—for example, the danger of break-ins or possible danger to the people living in the house?
      So far, the Government have failed to give any constructive response on these matters. On Second Reading last week I, and several of my hon. Friends, put these points to the Minister, although perhaps more briefly. He has had the best part of a week to do his homework. Therefore, I hope that when he replies he will show that he is not only aware of the problem but that he will do something about it. I have frequently raised in the House and elsewhere the scandal of warrant sales. This matter is even worse because it affects thousands more families. We are now in the middle of another severe winter. The Minister must say that he intends to do something by accepting my new clause.
      7.30 pm
      Mr. J. Grimond: I trust that none of the extra money that may be made available to the electricity boards under the Bill will be used for uranium mining in Orkney. We are as emphatically opposed to uranium mining as we ever were.
      I congratulate the North of Scotland hydro-electric board on its experiment with wind power. I have no objection to the money being used for that purpose. Orkney's power supply is now joined to the mainland, but windmills on the outer islands could make an important contribution to providing power and lighting on those islands. Some of the islands may come to depend upon wind entirely. I do not exaggerate the ability of wind power to deal with Britain's energy requirements, but the experiments are important. I hope that they will be encouraged and kept at a practical level.
      We have not heard much about wave power lately, but we can make use of experiments by other countries. Wave power does not seem as useful as once it did, but it could be a large source of energy. I hope that we are continuing our experiments or ensuring that we can take advantage of experiments elsewhere.
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      I support what the hon. Member for West Stirlingshire (Mr. Canavan) said about disconnections and the Scottish climate. The weather may be bad in Stirlingshire, but it is far worse in Orkney and Shetland. Apart from cold and wind, we have to beat the damp and our fuel bills mount year by year. Many houses these days are all electric. In Orkney and Shetland we have no gas except calor gas so that we are entirely dependent upon electricity. To be cut off is exceedingly serious.
      The most useful step would be to keep down the price of electricity. It is extraordinary and shocking that the price of electricity and other fuels has risen at a rate that exceeds the inflation rate. My constituents are annoyed when they look out of their windows and see the night sky lit up by the flaring of gas at Sullom Voe and, to a lesser extent, at Flotta. They cannot help thinking that there must be a scientific way of using that energy. A little of it is used but year after year we are told that the position will improve and that more of the gas will be used, but it is still flared off in enormous quantities.
      Hardship and danger result from cutting off electricity supplies. In my experience the hydro board behaves with humanity. Unlike the hon. Member for West Stirlingshire, I have received few, if any, complaints about the board's lack of humanity to people in difficulty. I hope that the Minister can give an assurance that the welfare services are in a position to assist people who find paying their bills difficult. I accept that some people deliberately avoid paying, but I hope that people in genuine difficulty will not be suddenly cut off and that the welfare services ensure that hardship is avoided or kept to a minimum.
      Mr. McKelvey: I welcome the opportunity to support the new clause tabled by my hon. Friend the Member for West Stirlingshire (Mr. Canavan). I admire his initiative.
      Scotland's electricity boards cut off 20,000 households last year. If the figures are anything to go by, they will cut off electricity supplies from even more households this year. Figures show that well over three-quarters of the people cut off are poor and suffer hardship. Fuel poverty and the inability to afford adequate warmth results in an important social problem that affects a growing number of unemployed, elderly, sick and disabled people and their families throughout Scotland.
      The main reason for disconnection is poverty. The electricity boards still believe in the myth that people can afford to pay but choose not to. They claim that most people pay up after disconnection. That is true, but, since it is a matter of life and death, means of paying the bills have to be found. People go to the moneylender or skip paying other debts.
      The code of practice aims to alleviate hardship among families. It is an easy document to read, but its key defect is that it contains no relationship between the people defined as suffering hardship—the blind, unemployed and disabled—and the financial help available through Government agencies. A family in the hardship category may get nothing from the DHSS and is unlikely to be treated differently from any other family. There is no guarantee that people will receive money from Government agencies to help with their fuel bills. It is cruel to dispatch the "offenders" to Government agencies to state their case when their hopes will be dashed and they will receive no assistance.
      Only this morning a lady of almost 70 years of age contacted me. She lives alone and her total income is

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      £37.50 a week. Religiously she puts £10 a week away to cover the cost of heating. She lives in an all-electric house and it takes £10 a week, not to heat the house, but to heat the one room to which she is confined. Apart from the cold that she suffers when she goes to the kitchenette from the living room to make a cup of tea, the lady fears the cost of heating the kettle. She can afford only £10 a week. She manages to pay her fuel bill but finds it difficult. She is confined to her home because of her disability and to one room because she cannot afford to heat any other rooms.
      Beer, baccy and Benidorm are often blamed for fuel poverty. The myth is that low income people are feckless and reckless in the way that they manage their money. Whether disconnections or evictions are involved, some say that mismanagement and a frivolous attitude to money is to blame. The South of Scotland electricity board would argue that they are feckless. I have encountered that attitude on many occasions. I have had many cases referred to me, which I have referred to the SSEB. To be fair to the board, in many cases it has managed to reconnect the supply and come to some financial arrangement with the appellant. Not one of the cases with which I have had to deal has been due to mismanagement or feckless spending by the individual or family. It has been the opposite. They simply did not have the money to pay the debts they had accumulated in order to have an adequate standard of living. Most if not all are living under conditions that I and most hon. Members would consider inadequate.
      I do not want to reel off thousands of statistics, because they can be not just boring but difficult to understand. However, it is worth mentioning some documents from which statistics can be obtained by any interested hon. Members. I recommend to the Minister that he should read, if he has not already, "Living in the Dark Ages" which is produced by Robert Edwards and Alistair Grange who are on the Scottish Fuel Poverty Action Group. It is an excellent document and some of the chapters are like reading "A Christmas Carol" by Charles Dickins. "The Human Cost of Fuel Disconnection" is a discussion paper that has been issued recently and is far-reaching in its analysis of the fuel poverty problem. There is an excellent document which, although produced in 1981, contains prophecies about fuel poverty. It is by the fuel poverty debts working party under the chairmanship of Arthur Long of the Strathclyde regional council. The prophecies contained within the document have borne fruit and all the horrible things that it said would happen are happening.
      If there are to be between 17,000 and 20,000 disconnections at this time of the year the cost in human misery cannot be calculated in cash terms for all the families who, over the Christmas period, might find themselves without a light, and not just for the Christmas tree, if they had enough money to purchase one. The household might be in darkness and there would be no means of cooking a Christmas meal, if they could afford one. My hon. Friend the Member for West Stirlingshire pointed out that there is a case for a comprehensive fuel allowance to be considered and established by the Government.
      I have written to the Minister about the climate and was astonished by the reply that I received. I do not believe that he could prove even statistically that the climate in the South of England is the same in the winter as the climate in the North of Scotland. I live in Kilmarnock, on the west coast where it is extremely damp. The dampness, added
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      to the cold, gives most of my constituents a rather rough time. Due to the rising unemployment in the area, many of them cannot warm their houses adequately. The Select Committee on Scottish Affairs is about to probe the effect of dampness throughout Scotland. Dampness is a scourge and when it is investigated I have no doubt that the effects of inadequate heating during the winter will throw some light on the difficulties suffered by some of our constituents.
      The most important point raised by my hon. Friend the Member for West Stirlingshire was the fact that the electricity boards have the right to enter homes in order to make disconnections. That power requires legislative change. It should be discussed in the House. Boards should not have the right to enter homes and disconnect the supply as they have at present. Even if that right were curtailed severely, we should need a third party to arbitrate before the disconnection was made.
      7.45 pm
      It is not always those in debt who are disconnected. Not long after I had raised the matter of disconnection in the House and had written to the Minister, I went home, after two days' holiday, to discover to my horror that my electricity had been disconnected. The electricity board did not need to gain entry to my home, but it was inconvenient to find one's all-electric home disconnected. It was a mistake because I had paid my bill. The SSEB was quick to apologise and send someone to reconnect my supply. Apparently my supply had been inadvertently disconnected in mistake for someone else's. Although it was in the spring, it was inconvenient and annoying to have no electricity. However, that experience pales in comparison with that of someone who, during the winter months, with perhaps a sick or disabled child, elderly person or young family, has to go through not just the humiliation and inconvenience of having their electricity supply disconnected, but the danger of suffering illness or hypothermia from such disconnections.
      I applaud my hon. Friend the Member for West Stirlingshire who tabled the new clause. I hope that we are successful in having it added to the Bill.
      Mr. Norman Hogg: The purpose of the Bill is to increase the statutory borrowing limit of the North of Scotland hydro-electric board and the South of Scotland electricity board. The Opposition support the proposal. Taken with the new clause in the name of my hon. Friend the Member for West Stirlingshire (Mr. Canavan), it would ensure that some of the money that the House is making available to the electricity supply industry would be used to remove a social problem. All of us who represent urban constituencies in Scotland are becoming more and more aware that it would make the electricity boards more aware of their social responsibilities.
      We know that the large increases are required to meet new developments, in particular the Torness nuclear power station. The planning and building of that power station was controversial. It is now under way and will be completed and ultimately generate electricity. It is right, therefore, that we should make money available for it, but I was struck by the admission by the Minister on Second Reading on 7 December 1982, at c. 741 of Hansard that only the Government could find the money required for that kind of project. That makes a joke of another Bill that is going through the House, which talks about an element of privatisation of the electricity supply industry. In one

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      case the Minister says that only the Government can find the money because of the scale of the project, but in another case we have a Bill that proposes privatisation. I am worried about what that shows us of the Government's attitude.
      We are talking about £1,097 million for the Torness power station, which is a considerable sum of money. However, it is difficult to see what new projects on that scale will be developed by the South of Scotland electricity board and the North of Scotland hydro-electric board up to the end of the century. I understand why the limits are being increased.
      A large section of Scottish opinion believes that our electricity supply industry already has surplus capacity, and that will be further increased when Torness comes on stream. In addition, we have de-industrialisation. If we were faced with the disastrous decision to close Ravenscraig, one spin-off would be additional overcapacity. Even if we save Ravenscraig—everyone in Scotland hopes that the Government will decide to retain it—the situation is bound to get worse. Every closure, large or small, causes problems for the electricity supply industry. Many industries use electricity as a primary fuel. As the closures continue, so does the overcapacity.
      I understand that we are voting the extra money to meet existing commitments and for updating plant. In the foreseeable future the industry's main activity will essentially be updating and refurbishing existing systems. I repeat that I cannot see what major projects will take place before the end of the century.
      I asked the Minister on Second Reading what major policy decisions on generation he envisaged for the electricity boards in Scotland for the immediate years ahead. I hope that today we shall have a better reply. Both boards are capital intensive, as is the whole supply industry. Manpower levels have constantly fallen, certainly since the introduction of productivity agreements in the early 1960s. I well recall all that happened then. Capacity and demand continued to rise, while manpower continued to fall. Although the industry has more capacity than is necessary to meet the economy's needs, it has gone some way to make itself an efficient organisation.
      My hon. Friend the Member for West Stirlingshire argues that a financially efficient industry, given further moneys from the Government, could take a different line on disconnection. My hon. Friend shows great interest in the problems of poor people in Scotland and it is to his credit that he brings the matter before the House.
      I hope that the Minister has read the report to which my hon. Friend the Member for Kilmarnock (Mr. McKelvey) referred. It was prepared by the social work department of Strathclyde regional council and is entitled:
      "The fuel debts working party of Strathclyde regional council report."
      It was prepared under the direction of Councillor Albert Long, the convenor of the social work committee, and contains useful information about a worrying situation.
      Many people faced with disconnection live in what are described as modern homes. They are often council properties and are heated by electricity or by gas that requires electricity to operate the system. A disconnection means that those people have no means to heat their home, cook or have hot water. The houses are often in smokeless zones and are frequently built of inferior materials, as the
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      Select Committee on Scottish Affairs will undoubtedly discover. They are damp, have heating problems and consequently high fuel bills. The disappearance of open fires also brings problems. Poor people suffer the consequences of disconnection.
      Cases are brought to my attention mainly by the unemployed workers centre in Cumbernauld. Councillor Eamon Monaghan has made a special study. One family came off the fuel direct scheme and the husband went on to invalidity benefit and ceased to receive supplementary benefit. The problem then arose.
      Prepayment meters might help. I was a full-time trade union officer for the administrative and professional staffs in the electricity supply industry. I remember when we ran down the prepayment sections in the district offices of the South of Scotland electricity board. It was the board's policy no longer to install meters and to remove those already installed, but with the changing economic situation and rising fuel costs at the beginning of the recession it changed its mind.
      Many people who would have benefited from the system do not have a prepayment meter. I know of the difficulties in my constituency of having prepayment meters installed. There are too few prepayment meters, and too few people who are likely to get into difficulties are identified early enough. More must be done for families whose fuel supplies are disconnected.
      I hope that the Minister will respond positively to my hon. Friend's proposal. He has done the House a service by bringing the subject to our attention. He has also done a service by having the matter debated when these problems are becoming acute for many families. I hope that the Government will have something positive to say about what they intend to do about the unfortunate people who face a Christmas without heating or lighting.
      Mr. Donald Dewar: It has been an interesting, short debate on clause stand part and new clause 1 which has been conveniently combined with it. I do not intend to follow the knowledgeable remarks of my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) about the wider issues in the industry as we considered some of them well on Second Reading. On that occasion, my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) spoke for the Opposition.
      The electricity industry in Scotland faces enormous problems. One of the most important is the external financing limit and funds that will be available for future development. I hope that the Minister agrees that considerable overcapacity is another. One of the prime reasons for that is the serious and dangerous recession into which the Minister and his colleagues have plunged the country by mismanagement of the economy in the past few years.
      I have recently examined the South of Scotland electricity board's report for 1981–82. It dealt with the closure of Invergordon which, to use what used to be a fashionable Tory phrase, "at a stroke" reduced by 26 per cent. the output of Hunsterston B. I take the board's word for it—I have no reason not to—that that will reduce its coal requirement for a year by 750,000 tonnes. Although Invergordon is a spectacular example of the result of the Government's policies, there are many others. We are witnessing dangerous circumstances which affect almost every side of the nation's life. They have resulted in high unemployment and an increasing toll of bankruptcies.

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      Another certain byproduct is that life has become extremely complicated for the electricity boards that operate in Scotland and other parts of the United Kingdom.
      I shall not concentrate on clause stand part as it would be difficult to do so without rehearsing what we have already gone through on Second Reading. I should like to deal with the new clause of my hon. Friend the Member for West Stirlingshire (Mr. Canavan). Like many other hon. Members, I congratulate him on his ingenuity in drafting it and getting it selected. It is a peg for debate. There are some difficulties with some of the phraseology—I am sure that my hon. Friend would be the first to agree. If it reaches the statute book, I am not sure what parts of the increased borrowing will be allocated to the end in mind, although an adequate sum will have to be allocated. Nor am I sure about the definition of "result in hardship". As has been said by many hon. Members, disconnection from electricity almost invariably leads to hardship. Varying degrees of social crisis may be attached to the personal hardship—it may depend on the age of the person, the composition of the family, where children are involved and so on—but for almost everyone, suddenly to live without lighting and, often, heating or a principal form of heating will cause considerable hardship. It is something that goes beyond the normal definition of mere social inconvenience.
      Perhaps as a result of the recession, the problem of fuel disconnection will sadly be with us for a long time. I shall quote some figures. They are a little out of date, but more recent statistics are not available. Between 1977 and 1979, the number of employed people living on earnings below the supplementary benefit level for families rose from 1·9 million to 2·1 million, and the number has almost certainly increased since then. The poorest 10 per cent. of employed male workers now earn 64·5 per cent. of average earnings.
      Unfortunately, the type of people who are likely to get into trouble with fuel disconnections are, because of the Government, becoming much more numerous and a much more distinct group in society. We see, as will anyone who has examined the new earnings survey for 1982, that there is plenty of evidence to suggest that the gap between those in skilled jobs that involve overtime and substantial earnings and those who are at the bottom end of the wage-earning scale is becoming greater. That will produce increasing problems for the electricity boards.
      It is fair to point out that there has recently been a considerable improvement. There is a long way to go but in terms of the number of people who have been disconnected by the South of Scotland electricity board, there is no doubt that the code of practice and the efforts that have been made by such groups as the Fuel Poverty Action Group in co-operation with the South of Scotland electricity board have improved matters.
      Mr. McKelvey: Although there have been improvements, is my hon. Friend aware that last September there were 1,137 disconnections in the SSEB area, and that there were 1,166 this September? Does he agree that, despite the SSEB's good intentions, an increasing number of people will fall into the trap and that the number of disconnections will continue to increase?
      Mr. Dewar: I am interested in what my hon. Friend has said, although I am not familiar with those figures. The SSEB's accounts for 1981·82 show that to the end of March 1982 3,522 people were cut off from the electricity
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      supply as compared with 4,471 for the equivalent period the year before. That is a considerable reduction. I have seen figures from other sources that suggest that the range is even wider than that. I am told that the number of disconnections to the end of July 1981 in the SSEB area was 5,734. That is horrific and startling. In September 1982—the most recent figure that I have been able to obtain—the number is down to 3,450. I hasten to say that that is still a worrying number and it should not give rise to any complacency. Nevertheless, although in the year to September 1982 there were 12,063 disconnections in the SSEB area, that represents a significant drop as compared with the previous year. I should like that drop to continue. There is a crisis but we have witnessed some marginal improvement. It would be churlish if we did not recognise that and pay tribute to the board's efforts in that respect.
      Nevertheless, an enormous amount of hardship is concealed in the figures. The problem is that long-term disconnection is becoming a major feature of the group. It is perhaps not surprising that 80 per cent. have been disconnected for more than one month, but at one point in the depths of last winter more than 1,100 consumers had been disconnected for more than a year.
      That suggests a level of misery which, from our personal experiences, the Minister and I might find difficult to encompass. I am used to the conveniences of comfortable living, and it would be hard to cope with the elementary conveniences with which these people must live. They are often forced on them through no fault of their own, often through misfortune and perhaps through an inability to manage. However, as a co-operative venture, society should try to help.
      There is still room for improvement. The point of the debate is to discover whether there is some way in which we can produce more improvements as well as a more sympathetic and supportive approach to these social problems.
      A number of things have produced a slight improvement in the figures to which I have referred, one of which has been the introduction of prepayment meters. Every hon. Member in the West of Scotland—I have no reason to believe that Edinburgh is that different—has had long correspondence with the electricity board about the introduction of prepayment meters.
      If, taken in isolation, I have some sympathy with the management's arguments because prepayment meters can produce problems in terms of security, what happens if the money is stolen and who is responsible for repaying it? I do not minimise these difficulties, and I can understand the electricity board's reluctance to move back to prepayment meters on demand. However, we have gone a long way towards that, and it has been of considerable help to a large number of families.
      The SSEB says that it will install these meters if it is "safe and practicable" to do so. I still have some reservations about the way in which that phrase is interpreted. I am told—I record this with some concern—that in certain areas of deprivation, where social judgments are made by the board, perhaps on the basis of its bad debt experience, there is still a reluctance to install prepayment meters.
      In some cases, there is the strange and sham performance of installing a prepayment meter that is fitted without locks. The idea is that 50p is put in the slot to activate the supply, but it is then taken out and the person gets a normal bill at the end of the period. There may be

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      some slight psychological advantage in the fact that each time money is put into the slot it reminds the person that he is consuming electricity, but that does not have the desired advantage of a proper prepayment meter. The basis of such a meter is that one pays as one goes along and knows that the money is "in the bank". Such a meter ensures that a person is not faced with a substantial lump sum demand, perhaps on a precarious family budget, at the end of the quarter. Having moved a long way towards making prepayment meters freely available, it would assist if the board completed the job.
      I also understand that in the SSEB area there has been a considerable increase in the use of the fuel direct scheme. As the Minister knows, this scheme is available to people who are on supplementary benefit and who are in arrears. Unfortunately, the number of people on supplementary benefit has risen sharply and is now about 6½ million throughout the United Kingdom. That is a further sign of the difficulties into which we have all been plunged by the economic mismanagement of this Administration.
      According to the SSEB's annual report, about 25,000 people in the South of Scotland are now on direct payment compared with 17,000 the year before. I understand that that is a considerably higher proportion of users than in other electricity board areas. I welcome the fact that this scheme is available, and I am pleased that last April it was possible to arrange a relaxation of the old SSEB rule, whereby if a person had a debt above £150 he could not go on to direct payment. That was a sensible change, although I understand some of the reasons for the board's reluctance to agree to it.
      One or two consumers in my constituency were not so impressed with the change in the regulations, which meant that the weekly deduction went up from £1·20 to £2·40 in order, as the Minister said, to facilitate repayment over a shorter period. Be that as it may, the change is a hopeful development.
      We are all examining ways to improve the regulations. Would it not be better to allow people who receive supplementary benefit to go on to the direct payment system if they are not yet in arrears but if they feel that direct payment would help them better to manage their affairs?
      8.15 pm
      The South of Scotland electricity board still takes the view that arrears must be accumulated before the direct payment system is brought into play and arrangements are made through the Department of Health and Social Security. The direct payment system should be available to anyone on supplementary benefit who is genuinely fearful about his affairs and who wishes to avoid falling into arrears. The extension of direct payments in that way would be a minor but especially helpful step.
      Although there are problems of definition in the code of practice, there is always room for improvement. The code has generally been a success and in that context I am grateful for the support of my hon. Friend the Member for Dunbartonshire, East. Although the code has been a success, some people have suggested to me that it should be put on a statutory rather than a voluntary basis. Today, I took the trouble to examine replies by a range of Ministers, mostly from south of the border, to questions
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      about the implementation and interpretation of the code of practice. I found that many of the decisions are left to the individual boards.
      That arrangement causes problems. Anyone who has examined the recent Policy Studies Institute report even in the cursory way that I have will see that there are wide variations in practice depending on in which board area one happens to live.
      Social agencies and voluntary agencies would widely welcome a statutory framework for the boards rather than leaving the arrangements to voluntary guidance, which allows a great deal of come and go. I do not suggest that a statutory code would be revolutionary, but I suggest to the Minister that such a code is worth examining.
      My hon. Friend the Member for West Stirlingshire spoke about disconnections. I notice that, in its latest annual report, the SSEB says
      "There is no effective alternative to maintaining the power of disconnection."
      It may well be that, in extremis, disconnection will be necessary in some cases, although I wonder whether the social cost-benefit analysis would support such disconnections. In any event, as my hon. Friend the Member for West Stirlingshire said, we know that there will be a report. An article in The Scotsman on 5 November referred to it at some length. It will be entitled "Fuel Hardship—Towards a Social Policy". The report, which is being prepared by officials for COSLA, will cover the whole of the United Kingdom. A key recommendation will be that there should be no disconnection without a court order. There may be difficulties in that. I have some reservations because I can see the problems, but the proposal should be considered with interest, concern and some sympathy to see whether it would help.
      When I was a legal apprentice I attended the small debts court in Glasgow, where hundreds of small debt actions were raised on behalf of the SSEB. Normally there is a disconnection, followed soon afterwards—very often when the family's finances are further strained by the expense of obtaining temporary methods of cooking and heating—by a court action to recover the money, with all that follows from that because of our archaic and long-unreformed laws on diligence. That is a typical picture, but what should happen is that where there will almost certainly be a summary cause action to recover the money disconnection should not be possible until a court has considered the matter and there has been certification that the proper procedures in the code of practice have been carried out. That may be clumsy, expensive and difficult. At the moment it is only a possibility, but we should consider it and I hope that the Minister will show an open mind about how we conduct such matters in the future.
      The Opposition will try to keep the matter under review and to monitor it, because we are unanimous in our belief that it is a genuine social problem. The statistics that we have been discussing during the past few hours are the evidence of much misery and social hardship. The reasons for that—the Minister will not resent this because he is used to being told it, and he has developed a hardening of the skin—are the recession and the Government's fuel pricing policy, which has forced up electricity and gas prices artificially, far outstripping the increase in earnings and the increase in inflation. Perhaps he can think about those matters at his leisure and in private.
      From the evidence of the past few days, Scotland will suffer yet another very hard winter. My hon. Friend the

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      Member for Kilmarnock talked about the different climates in Scotland and in the south of England. I travelled on the morning flight with my hon. Friend today and it was a subject of conversation as we shivered our way to the aeroplane in Glasgow and arrived in London to a distinctly warmer reception. I watch the gripping frost in the west of Scotland, remembering what happened to our housing stock last winter, with some apprehension, but I am sure that if I go too far down that road, Mr. Dean, I shall find myself in some difficulty. Every disconnection would be a tragedy in such a climate.
      I hope that the Minister will remember that in January 1982 there was an arrangement with all the British electricity boards that there would be no disconnections for only one week on the grounds that, in such severe weather, disconnection would be barbarous and grossly unfair to members of the public with financial difficulties. If we have the same appalling climatic conditions during the next few weeks, I hope that the moratorium on disconnections that was possible in early 1982 will be considered again, perhaps on an extended and much more generous scale. I saw what happened on the housing schemes in my constituency. The loss of the basic means of heating, lighting and power in severe weather can be a disaster, and it is a matter that hon. Members should never consider lightly.
      Mr. Alexander Fletcher: The hon. Member for Glasgow, Garscadden (Mr. Dewar) made several points and he attempted to be constructive and helpful. Naturally, I wish my response to be similar. The hon. Gentleman mentioned overcapacity in the Scottish electricity system. I cannot deny that, but the main purpose of the Bill is to provide funds for the construction of the nuclear station at Torness. As the debate illustrated especially well, the price of electricity is of even greater importance. The Government believe that electricity generated by nuclear stations is cheaper than that generated by coal or oil. Hydro-electricity is cheaper, but there is only a limited volume. The Bill that provides capital to the Scottish electricity boards is before the House because of the essential need to finance the continuation of the construction of Torness.
      Mr. Dewar: Will the Minister agree that one of the great disappointments under all Governments of recent years has been the failure of nuclear generating capacity to meet its price targets? Will he say how confident he is about Torness? At what price does he expect Torness to be able to produce electricity?
      Mr. Fletcher: We expect Torness to improve on Hunterston B, and Hunterston B was a considerable improvement on coal, although it was a prototype station. That should give the House some encouragement and should give the boards' consumers in Scotland some encouragement for the future, bearing in mind the points that have been stressed by Labour Members during the debate.
      The hon. Member for Garscadden mentioned the closure of the smelter at Invergordon—a matter that has been the subject of debate on previous occasions. I must correct him on one point. The prime reason for the closure of the smelter was not the price of electricity, important as that was; it was the absolute collapse of the aluminium
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      price on world markets. That is what did the damage to the British Aluminium Company and to some other companies in that field.
      With regard to disconnections, I do not wish to minimise in any way the importance of the considerations that lead the boards, the social work departments and the Department of Health and Social Services to deal with the problems of disconnection—and to deal with them as sympathetically as possible, as I shall endeavour to explain. The hon. Gentleman mentioned specifically prepayment meters and answered the question himself when he said that the policy of the boards is to install them whenever practicable. He was kind enough to mention some of the difficulties that the boards face in connection with prepayment meters.
      The hon. Gentleman suggested that the trigger for fuel direct payments by the DHSS should not necessarily be the accumulation of debt by consumers. I appreciate the thinking behind that suggestion and would like to consider it further with my hon. Friends. I do not know how practical it would be to switch direct payments from the DHSS in the circumstances that the hon. Gentleman envisages, but I should like to consider it. Perhaps when I have done so I can come back to the hon. Gentleman and tell him what conclusions my right hon. and hon. Friends and I have been able to reach.
      The hon. Gentleman suggested that the code of practice was working reasonably well. I would support that contention. It is working well on a voluntary basis. I shall take note of the hon. Gentleman's points.
      I believe that disconnections have to remain as a last resort, otherwise people might say "Why should I pay my electricity bill if, at the end of the day, no action will be taken against me if I do not do so?" If any Labour Member has a remedy for the problem other than disconnection, I hope that he will tell me about it.
      I hope that hon. Members will bear in mind the statutory responsibilities of boards to balance their books, to match their expenditure with their revenue, and not to discriminate unfairly to the benefit of any particular category of consumer. The boards must carry out their statutory responsibilities. They need some sort of deterrent against certain people. I hope that Labour Members will not suggest that in Scotland there are not some people who would dodge the payment of their electricity bills if there were no extreme remedy against them when they flagrantly abuse their responsibility.
      Mr. McKelvey: I think that all hon. Members would accept disconnection if someone did not want to pay the bill and the matter went to arbitration. However, the Minister has to bear some responsibility for his Government's pricing of electricity over the past three years. They have doubled the price of electricity, even if we take inflation into account. It was in 1981 that the South of Scotland electricity board made a profit of £27 million, but it still put up the price of electricity. One remedy that the Minister could take is to make the electricity cheaper.
      Mr. Fletcher: I repeat that the purpose of the Bill is essentially to finance the construction of a nuclear power station. The benefit of that should be cheaper electricity in Scotland in the years ahead.
      8.30 pm
      I should like to say a little more about disconnection policy so that there can be no misunderstanding about what

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      the boards are trying to achieve. The Scottish electricity boards carry out disconnections in accordance with the industry's code of practice, as hon. Members are aware. The operation of the code of practice has been examined by the Policy Studies Institute, an independent body. Its report, which was published recently, confirms that the Scottish electricity boards adhere to the code and that breaches rarely occur. Of course, human nature being what it is, breaches may occur from time to time, but the independent review states that such breaches are rare.
      Disconnections are carried out only after all attempts to make the customer come to an arrangement to pay all his debt over an extended period have failed. Various means are available to consumers to help them budget to meet their bills, including savings stamps and monthly payment schemes. The SSEB operates bi-monthly billing with the option of monthly bills. Those options are widely publicised, as the hon. Member for West Stirlingshire (Mr. Canavan) made clear in his speech.
      The boards will also install prepayment meters, subject, as the hon. Member for Garscadden said, to those meters being safe and practical. The success of the board's efforts can be seen by the fall in the number of consumers off supply at the end of November when the figure was 3,525 compared to 5,379 for the same month last year. The total number of disconnections for the year ending 30 November 1982 was 14,903 compared with last year's figure of 17,889, a decrease of almost 3,000. For consumers in receipt of supplementary benefit there is a fuel direct scheme operated by the boards and the DHSS at the request of the consumer. There has been an increase of the numbers participating in that scheme from 23,332 in November last year to 33,652 at the end of last month. The trend, as has been acknowledged by at least one Opposition Member, reveals the willingness of the boards and DHSS to continue to seek better methods of tackling the problem, which has been brought to our attention by Opposition Members.
      I say to the hon. Member for West Stirlingshire that Scottish consumers use more electricity, not so much for climatic reasons but because local authorities in Scotland, in their wisdom, gave tenants no choice on the installation of their central heating systems. In many areas of west central Scotland in particular, tenants were given houses that were all-electric, with underfloor heating. Not surprisingly, they found that the cost of the heating was well over the rents that they were being asked to pay. Because they could not afford to pay the full costs of electrical heating, many of them installed other means of heating their homes, and switched off the system that was supplied.
      It is unfair to blame the problem entirely on the electricity boards. The hon. Gentleman must look to local authorities in Scotland, which are largely controlled by the Labour Party, which put up those houses, gave no choice to the tenants and took the steps that have created so many of the problems that he illustrated to the House.
      Mr. Canavan: The Minister is making precisely the point that I made on Second Reading. As far as possible, tenants should be given a choice of the fuel that is to be used for heating their houses. Will the Minister or his colleague send an appropriate circular to the local
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      authorities advising them, or even directing them, on this matter? Will he give them adequate funds to see that his recommendation is implemented?
      Mr. Fletcher: The hon. Gentleman is suggesting that we spend money on all fronts. I am saying that some local authorities and many tenants have moved in this respect. The blame lies with the planning, the design and the decision to build the houses without giving any choice to tenants in the first instance. I suggest that the hon. Gentleman tries to draw too many conclusions from his constituency case. The action that he took was responded to promptly by the electricity board. He should bear that in mind when making his general complaint. Neither he nor Strathclyde's social work department needs to wait for a debate of this sort before raising the specific cases that the hon. Gentleman has produced.
      Mr. Canavan: The Minister is not addressing himself to the constructive alternative that my hon. Friends and I have offered. The unfortunate instances to which I have referred would never have occurred in the first place if the onus were on the electricity board to obtain a court order before it disconnects someone's electricity supply. These disconnections should not happen. Consumers should not have to ask their Members of Parliament to intervene. There should be some statutory protection. The new clause will go some way towards meeting the need for that protection.
      Mr. Fletcher: I know that the hon. Gentleman and his hon. Friends are anxious that the onus of a court order should be introduced. I am not sure whether the hon. Member for Garscadden, who knows something about these matters, takes the same view.
      Mr. Dewar: It is worth looking at.
      Mr. Fletcher: The hon. Gentleman says "It is worth looking at", and in so doing uses great political sense. There are many things that are worth looking at, but practicability has to be taken into account. It is not the boards' view, and nor is it the Government's, that it would be a practicable proposition to require a court order every time a disconnection was necessary.
      Mr. Canavan: Why?
      Mr. Fletcher: Evidence of non-payment is collected by the boards long before disconnection takes place. The boards make considerable efforts to try to help consumers to meet their requirements. They try to understand the nature of the problem in individual cases. When all that has been done, the boards feel that they have substantial evidence that insufficient effort has been made by the individual to pay his bills or to seek help from the appropriate quarter if he is unable to pay. For that reason the boards' advice—we support their view—is that the onus of a court order is unnecessary.
      The hon. Member for West Stirlingshire emphasised—he has done so previously—the importance of a court order before disconnection takes place. The Government feel that there needs to be the sanction of disconnection. If there is not, why should anyone pay? We believe that the procedures that the boards employ, which have been verified by an independent study, make it clear that every effort is made in using the code of practice to try to help consumers long before disconnections are contemplated.

      85
      The right hon. Member for Orkney and Shetland (Mr. Grimond) mentioned a number of matters. I note his opposition to any suggestion that there should be uranium mining on Orkney. His constituents have also made representations direct to the Department of Energy and the Scottish Office. The windmill projects are very important and may provide a solution for some of the smaller recommendations in the outlying areas. The North of Scotland hydro-electric board is contributing to a consortium investigating the suitability of prototype wave machines on the west coast of Scotland, and that possibility is still in business.
      I hope that I have met points that were made by the right hon. Member for Orkney and Shetland about disconnection. The price of electricity is not to be increased during the coming year. He mentioned the flaring of gas, and will know that the Peterhead power station has been converted and is now burning gas. The benefit of that, because of the new connection that we inaugurated between the North of Scotland and the Orkney Islands, will go to the islands in terms of gas being used. I hope that the right hon. Gentleman will agree that this is a proper and sensible purpose for the gas, instead of having if flared off shore. I am glad that the right hon. Gentleman has few complaints about the board and the services that it is providing, and that he welcomes the fact that the welfare services are making a big effort to assist.
      Mr. Dewar: I am glad to catch the Minister's eye before he comes to a conclusion, which cannot be far off. I raised specifically with the hon. Gentleman what happened in January 1982, when, because of the severe weather, and with the approval and active concurrence of Ministers, arrangements were made to have a moratorium on disconnections. If we have another severe winter, I am anxious to have an assurance that such a policy would be considered and actively pursued by Scottish Office Ministers and the boards.
      Mr. Fletcher: If a similar problem arises, we shall consider carefully that solution.
      The hon. Member for Kilmarnock (Mr. McKelvey) again spoke of disconnections and I make no complaint about that. However, no genuine case needs to go to a monelender as he suggested, because the DHSS with its fuel direct scheme is more than willing to assist, as are the electricity boards. I am glad that he acknowledged the quick response that he received from SSEB when he found himself a disconnected consumer because of an error. We have here an example of a poor chap, who for whatever reason—perhaps the cheque was in the post or any of the other problems that can apply—was cut off. Nevertheless, the Committee will be glad to hear that when he was disconnected and made proper representations to the board, within a few hours he found himself back on the grid.
      The hon. Member for Dunbartonshire, East (Mr. Hogg) wondered what new projects would require finance between now and the end of the century. The Bill looks to the end of the decade and essentially provides funds for the Torness construction project. Other requirements will arise, as the hon. Member acknowledged, such as capital spending projects for updating and refurbishing the existing system. This finance is included in the borrowings that are being sought. At present approval is not being sought for any major projects after Torness. No
      86
      application has been made to my right hon. Friend for any further major power station projects. I am glad that the hon. Gentleman acknowledged that the industry is efficient.
      These are the points that have been raised by Labour Members. I accept that the problems of disconnection are vexing and cause hardship, but I repeat, every effort is being made to consider the circumstances of each individual case. The last thing that the boards, the DHSS, the Scottish Office, or anybody else wishes to do is ride roughshed over electricity consumers. We are continually examining and re-examining the methods employed in all these circumstances with a view to being as fair-minded as possible, not just to those who find that they cannot meet their electricity bills, but to the vast majority of consumers who meet their bills whatever the circumstances.
      Question put and agreed to.
      Clause 1 ordered to stand part of the Bill.
      Clause 2 ordered to stand part of the Bill.

    New Clause 1

      DISCONNECTION OF ELECTRICITY SUPPLY
      Part of the increased borrowing powers referred to in section 1 shall be used by the Scottish electricity boards to avoid disconnections of electricity supply to households where such disconnection would result in hardship.—[Mr. Canavan.]
      8.45 pm
      Brought up, and read the First time.
      Question put, That the clause be read a Second time:—
      The Committee divided: Ayes, 30, Noes, 101.

      Division No. 30]

      [8.45 pm

      AYES

      Buchan, Norman

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

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

      Johnson, James (Hull West)

      Canavan, Dennis

      McKay, Allen (Penistone)

      Carmichael, Neil

      McKelvey, William

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

      Mason, Rt Hon Roy

      Cowans, Harry

      Morris, Rt Hon C. (O'shaw)

      Cryer, Bob

      Morton, George

      Dalyell, Tam

      Powell, Raymond (Ogmore)

      Dean, Joseph (Leeds West)

      Ross, Ernest (Dundee West)

      Dewar, Donald

      Smith, Rt Hon J. (N Lanark)

      Dixon, Donald

      Snape, Peter

      Dormand, Jack

      Stott, Roger

      Dunwoody, Hon Mrs G.

      Woolmer, Kenneth

      Eastham, Ken

      Evans, John (Newton)

      Tellers for the Ayes:

      Ewing, Harry

      Mr. Frank Haynes and

      Hamilton, James (Bothwell)

      Mr. Norman Hogg.

      NOES

      Alexander, Richard

      Dorrell, Stephen

      Alton, David

      Douglas-Hamilton, Lord J.

      Ancram, Michael

      Dover, Denshore

      Aspinwall, Jack

      Emery, Sir Peter

      Beaumont-Dark, Anthony

      Fairbairn, Nicholas

      Berry, Hon Anthony

      Fairgrieve, Sir Russell

      Boscawen, Hon Robert

      Fenner, Mrs Peggy

      Bottomley, Peter (W'wich W)

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

      Bright, Graham

      Fletcher-Cooke, Sir Charles

      Brooke, Hon Peter

      Fookes, Miss Janet

      Brown, Michael(Brigg & Sc'n)

      Fowler, Rt Hon Norman

      Buck, Antony

      Goodlad, Alastair

      Carlisle, John (Luton West)

      Grant, Anthony (Harrow C)

      Chapman, Sydney

      Greenway, Harry

      Clarke, Kenneth (Rushcliffe)

      Griffiths, Peter Portsm'th N)

      Cockeram, Eric

      Grimond, Rt Hon J.

      Cope, John

      Gummer, John Selwyn

      Costain, Sir Albert

      Hamilton, Hon A.

      Cranborne, Viscount

      Hamilton, Michael (Salisbury)

      87

      Hawkins, Sir Paul

      Parris, Matthew

      Henderson, Barry

      Penhaligon, David

      Howell, Ralph (N Norfolk)

      Proctor, K. Harvey

      Hunt, David (Wirral)

      Rhodes James, Robert

      Hunt, John (Ravensbourne)

      Rumbold, Mrs A. C. R.

      Jessel, Toby

      Sainsbury, Hon Timothy

      Johnston, Russell (Inverness)

      Shepherd, Colin (Hereford)

      Jopling, Rt Hon Michael

      Speed, Keith

      Knight, Mrs Jill

      Speller, Tony

      Lee, John

      Spence, John

      Lennox-Boyd, Hon Mark

      Stanbrook, Ivor

      Lester, Jim (Beeston)

      Stevens, Martin

      Lloyd, Peter (Fareham)

      Stewart, A. (E Renfrewshire)

      Loveridge, John

      Stradling Thomas, J.

      Lyell, Nicholas

      Taylor, Teddy (S'end E)

      McCrindle, Robert

      Thomas, Rt Hon Peter

      MacGregor, John

      Thompson, Donald

      McNair-Wilson, M. (N'bury)

      Thorne, Neil (Ilford South)

      Major, John

      Townend, John (Bridlington)

      Marland, Paul

      Trotter, Neville

      Mates, Michael

      Viggers, Peter

      Mather, Carol

      Waddington, David

      Maxwell-Hyslop, Robin

      Wainwright, R. (Colne V)

      Mellor, David

      Wall, Sir Patrick

      Mills, Sir Peter (West Devon)

      Waller, Gary

      Monro, Sir Hector

      Watson, John

      Mudd, David

      Wells, Bowen

      Murphy, Christopher

      Wheeler, John

      Myles, David

      Younger, Rt Hon George

      Neale, Gerrard

      Needham, Richard

      Tellers for the Noes:

      Neubert, Michael

      Mr. Tristan Garel-Jones and Mr. Ian Lang.

      Newton, Tony

      Osborn, John

      Question accordingly negatived.
      Bill reported, without amendment.
      Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
      Bill accordingly read the Third time and passed.

  Lands Valuation Amendment (Scotland) Bill
  Order for Second Reading read.
  8.55 pm
  The Under-Secretary of State for Scotland (Mr. Allan Stewart): I beg to move, That the Bill be now read a Second time.
  This is a short Bill with one substantive clause and a single purpose. I believe that it will be welcomed by all hon. Members. We seek, through the Bill, to nullify the unintended consequences of a repeal made by the Local Government (Scotland) Act 1975.
  Section 42 of the Lands Valuation (Scotland) Act 1854 defines lands and heritages subject to valuation for rating. There are two provisos to the reference in that section to "machinery fixed or attached". One says that the term
  "is to be construed as including all machinery, machines or plant in or on the lands and heritages for producing or transmitting first motive power or for heating or lighting such buildings."
  The other says that machinery fixed or attached
  "shall not include machines, tools or appliances which are only so fixed that they can be removed from their place without removing any part of the building."
  The question that arises is what happens to plant which is both moveable and for the production of first motive power, and so on. The answer originally was that the proviso about moveability began with the words "save as herein provided" which insulated the description of plant specified as being in valuation from the description of plant exempt from valuation.
  However, paragraph 5 of part II of schedule 6 to the Local Government (Scotland) Act 1975, which took out of valuation certain electric motors, repealed the words "save as herein provided". It was clearly not intended at the time to take out of valuation all moveable plant and machinery providing first motive power, and so on, and none of the interested parties seems to have pressed for that to happen.
  Earlier this year the Lands Valuation Appeal Court concluded on an appeal from the Post Office against the assessor for Orkney and Shetland that certain generators escaped valuation because the words "save as herein provided" had disappeared and that this meant that the proviso regarding moveability overruled the proviso regarding first motive power and that, accordingly, machines for producing first motive power were exempt from valuation if they were moveable. We estimate that if this principle were carried into effect in relation to all similar plant in Scotland there would be an annual loss of rate income of about £40 million.
  We have received urgent representations that this would be quite unacceptable as the unintended consequence of legislation in 1975 addressed to quite different purposes. We accept this point, as do the Scottish office of the CBI. The purpose of the Bill is, therefore, to reverse the unintended effects of the 1975 legislation.
  Hon. Members will see from clause 1(1) that the words in question are deemed never to have been repealed. That means that the provisions will have effect over the whole of the present financial year, avoiding the uncertainty, abortive work of assessors' departments and serious loss of rate income for that year which would otherwise ensue.
  Two other points deserve attention. First, the electric motors which were deliberately derated by the 1975 Act

  89
  are protected against any effect of the words restored. Second, clause 1(2) ensures that any successful appellant will not be deprived of the benefits of his action before enactment of the Bill, although after its enactment he will be on the same footing as other ratepayers.
  This Bill is an attempt to correct as soon as possible a consequence quite unforeseen and unintended of a provision now seven and a half years old. Local authorities in particular stand to lose significant income and their assessors' departments stand to be confounded by a mass of appeals if we do not take quick action to restore the position to what it was up to 1975. The Convention of Scottish Local Authorities supports the measure and the CBI's Scottish office does not oppose it.
  The Government's decision to introduce the legislation followed a meeting between myself, and the hon. Members for Stirling, Falkirk and Grangemouth (Mr. Ewing), Clackmannan and East Stirlingshire (Mr. O'Neill) and West Stirlingshire (Mr. Canavan). The hon. Member for Glasgow, Garscadden (Mr. Dewar) was involved in a debate on the Floor of the House and was not able to be present. The discussions were constructive and helpful. The three hon. Members represent the Central region, which would be particularly affected if this measure were not introduced. I commend the Bill to the House.
  9.2 pm
  Mr. Donald Dewar: For once the Minister is on safe ground when he says that the Bill will be welcome by all sides of the House. It has been canvassed in private places. We shall give it a fair wind. The Minister said that the Bill was technical. That is a brave euphemism. I found it incomprehensible when I first read it. My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) confided that he does not quite understand one sentence in the Bill even now. That means that the Bill must be arcane in the extreme.
  The measure is narrow. It reverses a specific judgment—the Post Office against the Assessor for Orkney and Shetland. It does not impinge on the broader aspects of the derating of outside plant and machinery which is the subject of recent legislation and which may be the subject of dispute when the rate support grant is discussed in the House. Although some provision has been made for Orkney in particular, there is cold comfort for the Central region, Falkirk or a number of other local authorities. The unanimity about this measure will not extend to such broad matters.
  It is a matter of some satisfaction to those of us who take a masochistic pleasure in Committee work to come across a Bill such as this which has been caused by an unattended oversight in Committee on previous legislation. It is caused by the survival or omission of words such as "save as herein provided". I cannot remember whether the words were left in or taken out. It shows that there is some point in the more dreary Committee stages that we inflict upon each other.
  The constitutional interest of the Bill is that it is retrospective. I like some of the euphemisms used by the Minister. He seemed to suggest that it would avoid a serious loss of rate income or was for the avoidance of uncertainty. However, it is, at the end of the day, retrospective legislation. We are prepared to support it because after six and a half years the courts tested a loophole that has been discovered.
  90
  I accept that if it were not put right there would be an unintended, substantial and serious loss suffered by regional authorities in Scotland. The Minister has suggested a figure as great as £40 million, and that would be important. Given what has happened in the past week with the rate support grant settlement and the difficult times that regional authorities are being asked to face because of the Minister's parsimony and meanness, we should be thankful for small mercies that another unexpected loss has not been inflicted upon them.
  I am grateful for this sensible Bill. We do not intend to delay the House. I hope that it will pass speedily on its way and rescue us from an impasse that none of us intended or expected.
  9.9 pm
  Sir Hector Monro: I want to put one or two points to my hon. Friend the Minister about the Bill, which we all accept. I am grateful for the letter that I received about the representations made to me by COSLA and the Dumfries and Galloway regional council. The fact that both COSLA and my regional council thought fit to raise the matter with me shows that it is perhaps not as insignificant as has been made out. In Dumfries and Galloway it will apparently make a difference of only 0·75p to the rate. That is not insignificant today, when we are trying to keep every ratepayer's bill down by every possible penny.
  I want to ask my hon. Friend about the differential between Scotland and England in valuations and assessments. It seems to me that the assessor in Scotland almost invariably assesses buildings, caravans, race courses and so on, substantially higher than the equivalent in England. What discussions is my hon. Friend having with the assessor in Scotland on the determination of assessment in Scotland? My hon. Friend has received correspondence from both my hon. Friend the Member for Galloway (Mr. Lang) and myself about the approach of the assessor to the valuation of caravans in Scotland. The difference between assessments in Scotland and in England is similar to the point that we are discussing this evening. The assessments are much higher in Scotland. Race courses in Scotland pay swingeing rates compared to equivalent race courses in England. My hon. Friend must accept that that has a deleterious effect on a host of events in Scotland.
  Is my hon. Friend having consultations with the assessors in Scotland on the important issues of tourism and industry? There is anxiety that the assessors in Scotland are taking a much more severe decision on values than those in England and that Scotland is thereby losing substantially.
  9.11 pm
  Mr. Dennis Canavan: I agree with the hon. Member for Dumfries (Sir H. Monro) about the unfair rating disparities between Scotland and England. He mentioned caravans and race courses. Football clubs are also anxious about the great burden placed on them. The rates that they pay are out of all proportion to those paid by first division clubs in England, although some of the English stadiums are in much better condition than those of some of our premier division clubs.
  I thank the Minister. I do not often do so. My colleagues in the Central region and I met the Minister, and the Bill has now been produced. Central regional

  91
  council and the district councils within the region, particularly Falkirk, were worried about the burden. There would have been a great burden on the ratepayers at a time when the local authorities were yet again suffering cuts in rate support grant and in other areas where they should have Government support.
  There is an element of retrospection in the Bill and some hon. Members may have reservations about that. I do not. This is not the first time, and it will not be the last, that the House has passed retrospective legislation. When a Labour Government are returned we may need more retrospective legislation to undo the damage done by the wicked Tory Government. I hope that when we introduce the legislation no hon. Member present today, particularly the Minister, who will be speaking from the Opposition Benches, if he has a seat at all, will criticise the iniquities of retrospective legislation. In certain circumstances, it is good and justifiable. I thank the Minister not only for the reasonable Bill but for setting a useful precedent for a Labour Government.
  9.13 pm
  Mr. Allan Stewart: I am pleased by the happy and unusual tone of the debate.
  I thank hon. Members for welcoming the Bill. As the hon. Member for Glasgow, Garscadden (Mr. Dewar) said, other rating matters, particularly the derating of external plant and machinery, may not have such a unanimous welcome. My right hon. Friend will be introducing an order, which we shall debate.
  My hon. Friend the Member for Dumfries (Sir H. Monro) said that the measure is not insignificant. It is technically complex and £40 million rate income is not insignificant. My hon. Friend and the hon. Member for West Stirlingshire (Mr. Canavan) mentioned the differences between rateable values in Scotland and those in England and Wales. The Bill is not related to that point, but I assure hon. Members that my right hon. Friend the Secretary of State is examining various cases that have been sent to us about caravans, race courses, football grounds and other matters. The valuation systems are different north and south of the border and always have been. Rateable burdens vary for several reasons, including the different expenditure patterns of different local authorities.
  The House has welcomed the measure. It is technical but important. I commend it to the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Cope.]
  Bill immediately considered in Committee; reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed.

  Statutory Instruments, &c.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): To save the time of the House, I shall put together the Questions on the two motions to approve the statutory instruments—that is items 6 and 7 on the Order Paper.
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A(5) (Standing Committees on Statutory Instruments, &c.).

  Statutory Instruments, &c.
    VETERINARY SURGEONS
    That the draft Veterinary Surgeons Act 1966 (Schedule 3 Amendment) Order 1982, which was laid before this House on 24th November, be approved.—[Mr. Cope.]

    ANIMALS
    That the draft Welfare of Livestock (Prohibited Operations) Regulations 1982, which were laid before this House on 24th November, be approved.—[Mr. Cope.]
    Question agreed to.

    ANIMALS
    Resolved,
    That the proposed alterations to the Code No. 1 of the Codes of Recommendations for the Welfare of Livestock, relating to cattle, which were laid before this House on 24th November, be approved.—[Mr. Cope.]
    Resolved,
    That the proposed alterations to the Code No. 2 of the Codes of Recommendations for the Welfare of Livestock, relating to pigs, which were laid before this House on 24th November, be approved.—[Mr. Cope.]

    Standing Orders (Revision)
    Ordered,
    That a Select Committee be appointed to consider and report upon the re-arrangement and re-drafting of the Standing Orders so as to bring them into conformity with existing practice.
    Ordered,
    That Mr. Allen Adams, Mr. George Cunningham, Mr. Robert Rhodes James, Mr. Robert Litherland, Mr. Nicholas Lyell, Mr. Robert Maxwell-Hyslop, Mr. Peter Thomas and Mr. Ken Weetch be Members of the Committee.
    Ordered,
    That the Committee have power to send for persons, papers and records.
    Ordered,
    That Three be the Quorum of the Committee.—[Mr. Cope.]

  Domestic Energy Supplies (Standing Charges)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
  9.18 pm
  Mr. John Ward: I thank my hon. Friend the Minister, who has already had a busy day in his ministerial duties, for being present to answer the debate on standing charges for domestic energy supplies.
  The debate is not intended to be a general attack on the suppliers of domestic energy. I shall concentrate on a specific subject—standing charges.
  It is a strange coincidence that exactly one year ago tonight the South and West experienced some of the most appalling weather that they had had for many years. There was enormous damage to electricity supplies. I and many of my constituents remember the untiring efforts that were made in Arctic conditions to restore supplies to domestic users.
  In the past year, local electricity authorities —certainly that in my area—have used their time wisely to improve means of delivery and communication with the public in time of emergency. They have also been imaginative in their use of local radio, which did such sterling service a year ago.
  My constituency is predominantly urban and I am sure that my right hon. Friend the Member for Bournemouth, West (Sir J. Eden), my hon. Friends the Members for Bournemouth, East (Mr. Atkinson) and Christchurch and Lymington (Mr. Adley) will confirm the general anxiety in areas similar to Poole. I understand that if my hon. Friend the Member for Dorset, North (Mr. Baker) catches the eye of the Chair, he will refer to the problem in rural areas, which are not dissimilar to ours.
  The House will be aware that, apart from the cost of accommodation, domestic rates and fuel are among the largest items of expenditure in the householder's budget. Like many of my colleagues, I find that much of my mail consists of constituents' complaints about those two items. The Minister and I are unable to do anything tonight about domestic rates, which are the responsibility of my right hon. Friend the Secretary of State for the Environment, who I hope will be making a more welcome announcement in the near future. However, we can again outline the level of hardship that is caused by the standing charge element in domestic fuel bills.
  I should also like to refer to the standing charge element in water bills. In some areas that charge is not excessive at present, but if we continue with the expansion of the use of meters we could well get complaints from consumers if the level of standing charges in the water industry are not watched.
  I am well aware that the Government have already done much to help the elderly and the underprivileged with their fuel bills and that about £300 million has been made available in the current year for this purpose. Most people who complain to me about their fuel bills say that, although they economise in the use of fuel, standing charges are an increasing burden. In many instances, the standing charge exceeds the cost of the fuel consumed by a considerable amount.
  A constituent who finds electric central heating too expensive to run recently wrote:
  94
  "A couple of years ago we had a gas fire installed and the standing charge per quarter was £2·16. What logical reason can there be for increasing standing charges from £8·64 per annum to £36 per annum in two years?"
  That constituent was kind enough to include her gas bill, which showed that for the quarter concerned the bill for fuel was zero but the standing charge was £9. That shows maximum economy in the use of fuel, but the £9 standing charge per quarter still applied.
  Another constituent wrote that she and her husband are living on a low wage and have had to economise. They did so by not having any heating during the day. She cooks by gas, but tells me that their self-denial is in vain, because as fast as she saves gas the standing charge is increased and up goes her bill.
  It is regrettable that, when explanations are sought from gas offices, people are told that it is entirely because of the Government's revenue requirements that standing charges are increased. It would be fairer if the people in gas board showrooms explained to the customers concerned why standing charges are thought to be fair and necessary as part of the domestic energy costing system. They might also explain that domestic gas prices have risen over the last three years because the previous Government held down prices artificially.
  It is not generally understood that the power to adjust standing charges rests not with the Secretary of State but directly with the gas and electricity industries. However, My right hon. Friend has asked those industries not to increase standing charges further until the results of two inquiries are known. The first inquiry is being carried out in co-operation with independent consultants, and is examining the level and composition of standing charges. I understand that this is the first time that an independent inquiry into standing charges has been carried out into any of the energy supply industries, and I also understand that the report is likely to be available by Christmas. My right hon. Friend the Secretary of State has asked the industries to re-examine the possibility of limiting standing charges to small consumers to not more than half the total bill. The measure has become known as the 50–50 proposal.
  There has been much anxiety and some action has been taken about the level of standing charges but we are now approaching the period of heaviest fuel consumption. It is important that speedy decisions should he made if any action on standing charges is to be effective in the current season.
  I do not call for the abolition of standing charges, because I know that they are fixed costs that are incurred by all domestic customers, no matter how much or how little fuel they use. I am also aware that the standing charges are intended to cover the costs in full and that, without standing charges, customers who must maintain a supply for standby purposes would pay nothing. If, as some of my right hon. and hon. Friends have suggested, standing charges were to be abolished, the unit costs of domestic fuel would have to be increased by about 15 per cent. That would be an intolerable burden on consumers.
  However, if the 50–50 proposal were adopted, about 1 million gas consumers and ¾ million electricity consumers would benefit. About ½ million of those people would be pensioners. I accept that the Department of Health and Social Security is the only Department geared to help those in most need but the people of whom I am speaking are those not receiving direct help from the Government but those who are trying to live within their means. I am aware

  95
  that many of the heaviest domestic energy consumers are the elderly and those with young children and it would be wrong if, in trying to help one group by reducing standing charges, we further penalise those who are least able to pay their way. It is not only the less well-off consumers who must watch their pennies, but many who live on fixed incomes that are above the level at which they may receive State assistance.
  As a result of media interest in this debate, it has been suggested to me that the 50–50 proposal could mean that heavy consumers of domestic energy will have their standing charges increased to compensate for any reduction for low energy consumers. One worried gentleman took the trouble to phone the House today because he believed that his standing charges could go up to £100, which would be equal to the cost of the fuel that he uses. I have never heard of such a proposal and I would expect that the cost of reducing standing charges for low energy consumers will be conpensated by a marginal increase in the unit rates.
  A lady from Scotland phoned me this evening to say that if standing charges were lower she would have gas connected. Perhaps the gas boards would get more business if they reduced standing charges.
  I have obtained some figures for the adjustment to the unit and therm rates that would be required to give effect to the 50–50 proposal—when the standing charges would not be greater than half the total bill. Based on October 1982 rates, the 50–50 proposal would increase the price per therm of domestic gas and the unit rate of electricity by small fractions of a penny. That does not seem too high a price to pay to remedy the sense of injustice and frustration felt by so many domestic consumers in trying to live within their means.
  There is some good news from the gas and electricity industries. I understand that the average price of electricity will not increase in April 1983. That will help to alleviate some of the problems that I have illustrated. It would also seem that the next review of gas prices will not take place until October 1983. I hope that the breathing space will be used to examine closely the standing charges problem.
  Those who oppose a reduction of standing charges to 50 per cent. of the fuel bill sometimes mention second home owners and others who might be considered to benefit unfairly from such a system. Often, when measures are taken to improve the financial circumstances of those most in need, others may also benefit. I accept that, but I feel strongly that it should not be an excuse for failing to act.
  While, as I have illustrated, the Government have done much to help and have exerted pressure on both the gas and electricity industries—especially through the two inquiries that I have mentioned—any progress that is being made is much too leisurely. If the two industries did not enjoy an effective monopoly and were in a competitive market, they would be much more responsive to public concern. It is unacceptable that their monopoly position allows them to dictate progress in this matter.
  Hon. Members should not underestimate the anger, frustration and resentment of those who are trying to plan their spending and whose efforts are frustrated by the high standing charges. I hope that my hon. Friend the Under-Secretary of State will say tonight that further pressure is being put on the two industries rapidly to bring to a
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  conclusion the two investigations set up by my right hon. Friend the Secretary of State, and that during the next few weeks—no later—we shall hear that some action is being taken to help those who find that, despite all their good housekeeping, their fuel bills are increased to unreason-able levels. The effect of standing charges, when related to the domestic consumption of low energy consumers, is ridiculous. Once again, I thank my hon. Friend the Under-Secretary for being here to answer this debate and I look forward to his reply.
  9.30 pm
  Mr. Frank Haynes: The Under-Secretary of State should listen carefully to what is said tonight, bearing in mind the real pressure that is put on Members of Parliament by their constituents. In my surgeries, and when I go around my constituency, I hear complaints from, in particular, the elderly, the low income groups and the unemployed. The worst hit are those who earn above a certain income and who cannot claim benefit, yet who must meet their energy debts. There is real public concern about the matter.
  The hon. Member for Poole (Mr. Ward) referred to price increases during the past few years, but we must consider the present position. Prices could have been kept down either by reducing the standing charge or by halting the price increases encouraged by the Government. The increases cause misery and poverty, but tonight we are talking not about energy price increases but about standing charges, which are a racket for the public industries. We may have had those charges when the Labour Party was in power, but matters have become much worse during the past three and a half years. Statistics prove that to be so.
  The press in Nottinghamshire, which supports the Conservative Party, has run a campaign about standing charges for several weeks. It is a beautiful campaign, and I am told in no uncertain terms that many representations have been received from the people who have been hit especially hard by standing charges.
  Hon. Members know what happens. Constituents come to surgeries and say "This charge has risen again", and so it continues. The hon. Member for Poole referred to £100. The way that we are going now, it will not be long before we reach that figure. However, it would appear that Ministers have applied pressure to the nationalised industries to hold down their prices in preparation for a general election. I noted that the hon. Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) was nodding in agreement with me until I mentioned the general election.
  The Minister and his colleagues have a real responsibility. I do not wish to hear the Minister say tonight "I cannot interfere". The Secretary of State interfered when he wanted the prices jacked up by 10 per cent. above the inflation rate for three years. I hope that the Minister will say tonight that he will do something about standing charges.
  I welcome the opportunity to participate in the debate and to congratulate the hon. Member for Poole on initiating it. I shall take great interest in what is said from the Conservative Benches on the subject of standing charges. I recognise that many hon. Members on each side of the House are greatly concerned about standing charges. I hope that the Department, and the Minister in particular,

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  will take note of that feeling, because many representa-tions have been made to hon. Members in the hope that the Government would do something about it.
  It is no good having a couple of inquiries and then doing nothing. Those who are hit particularly hard by the standing charges would like to see them abolished. Many hon. Members have suggested that in all sorts of places, including this Chamber, and note should be taken of those suggestions.
  The various energy boards are making millions of pounds of profit. How are those profits being spent? That is another question, but the fact that such huge profits are being made gives the Government an opportunity to do something about the massive standing charges. It is high time that something was done about them. It would be a feather in the Government's cap if they were to do something, with a general election looming on the horizon.
  I have tried hard not to make political comments, because I feel very strongly on the question, as do other hon. Members. Clearly the Government have a responsibility to do something about standing charges. They can do something, and I hope they will.
  9.37 pm
  Mr. Jim Lester: I am delighted to be able to support my hon. Friend the Member for Poole (Mr. Ward) in his most reasonable case, and also to support the hon. Member for Ashfield (Mr. Haynes) in some of his remarks, although not all of them, because he raised rather wider issues than that of standing charges for domestic energy. He and I represent areas which have a great deal to do with the energy industries. We supply the coal for the Trent valley, which supplies the power to the grid for much of the national economy, far beyond our local needs, so we shall always take a particular interest in energy.
  The argument relates to the acceptability of the basis on which standing charges are calculated and to an understanding of the principle involved. Those who pay the standing charges, and particularly those who feel most strongly about the matter, are not fools. They are people who have experience of making ends meet over many years. They are not simple people. They understand the basis of bills and the basis of meeting their weekly payments. The principle of minimum use of energy is a proper one for a declining resource, and they understand that principle, but they cannot equate it with the imposition of standing charges which go up at a faster rate than the rate of inflation. That is what causes friction and difficulty.
  It is easy to understand the basis of the energy industries' interest in standing charges. They say that there is a basic infrastructure that has to be provided and that that infrastructure has to be divided between the consumers on an equal basis, but that policy does not work in practice for those who are paying the bills.
  I should have thought that it would pay the energy industries—it does not matter which facility, and I include water and would go so far as to include petrol—to look at how much worry, concern and public aggravation there is about the basis on which they levy charges. It cannot be worth their while to go further down that route.
  My hon. Friend the Member for Ashfield—I call him my hon. Friend because I have known him for a long time—said that our local paper conducted a campaign on this matter and encouraged letters from constituents. The
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  case has been widely expressed. I cannot underestimate the public concern, whether it is in Poole, Nottingham or Scotland. Wherever one goes the concern is similar.
  I shall not go as far as to suggest a solution, but I believe in the principle that the cost of energy should be related to the cost per unit, whether the facility is water, electricity, gas or petrol. There is a basic justice in that formula.
  We accept that the energy industries must charge a basic minimum. The simplest method, which people could understand, would be a basic cost per unit and a minimum charge. That charge should be well publicised on the bottom of the bill. It should state that below a certain level it is not economic to supply the fuel, whatever it is, and so there has to be a minimum charge. People could understand that. It is based on justice. It is linked to usage. There should be an understanding that there is a minimum charge below which it is not worth while to supply that facility.
  If we could move in that direction, there would be much less concern and aggravation and more support for the work done by the energy industries. One should not criticise them too much. There have been tremendous changes in all the industries. They have coped with enormous difficulties, particularly the gas industry when it converted town gas to North Sea gas. One does not want to condemn the industries. A proper basis of charging, which is simple, straightforward and understandable, and which my hon. Friend the Member for Poole has called for, as I do, would be better for everyone, particularly for consumers who feel that they are unjustly treated.
  9.42 pm
  The Under-Secretary of State for Energy (Mr. David Mellor): I am glad that circumstances have allowed us to have a longer debate on this important topic than would have been possible under normal circumstances when the Adjournment debate has to be compressed into the last half hour of the day's sitting.
  I join in the congratulations that have been extended to my hon. Friend the Member for Poole (Mr. Ward) on having raised this important subject. Having lived with the issue of standing charges for almost a year almost on a daily basis, I am glad to have an opportunity to speak at greater length than is possible at Question Time about some of the difficulties, which I know many hon. Members would wish me to do, and to make some points about the action that the Government have taken, which is, in my respectful submission, considerable.
  I look kindly upon my hon. Friend, not merely because of his many sterling qualities but because he represents the borough of Poole. I was born within a few miles of his constituency. I did not have the privilege to be born within it, but Poole was our nearest big town. For nearly 20 years it was one of the centres of my life. I like Poole. My hon. Friend serves it well as its Member of Parliament.
  As the Minister responsible for electricity matters, I should also like to thank my hon. Friend for his gracious tribute to the efforts of the Southern Electricity Board, which covers his constituency, in coping with the enormous problems that were posed by the extreme weather of last winter. I know that many consumers were distressed at losing power last winter. One cannot imagine any more distressing occurrence to disrupt normal family life than the loss of electricity, such is our dependence on this basic commodity. It is equally right, as my hon.

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  Friend made clear, that strenuous efforts were made by men who worked in conditions that none of us would like to experience to restore the supply.
  I was in the south-west of England two weeks ago as a guest of the South Western Electricity Board. I had the opportunity to see work being carried out on Dartmoor to replace some poles that had had their day and to strengthen the system in preparation for the winter. I did not care to spend too long even in the fairly mild conditions that were then prevailing. The thought of spending two or three hours at a time on top of a pole and working in those conditions is not pleasant. At a time when it is sometimes suggested that attitudes have polarised on nationalised industries—the saying goes that one is either very much in favour of them or very much against them—it is important to know that my hon. Friends share my conviction that in these technical matters we are well served by those who work for the electricity industry.
  My hon. Friend pursued his case with clarity and moderation. He recognised, as did the hon. Member for Ashfield (Mr. Haynes) and my hon. Friend the Member for Beeston (Mr. Lestor), the importance that is attached to the issue by so many of our constituents. As the representative of a socially mixed inner London constituency, I am only too aware of that. My hon. Friend was prepared to recognise—I thank him for it, he having studied the subject with much greater care than some who have dilated upon the matter on other occasions—the seriousness with which the Government take the issue and many of the complexities which lie in the way of the easy solutions that are so often peddled.
  I am aware of the wide interest on both sides of the House. Thankfully, it is an interest that transcends party lines and discussion upon it does not degenerate into party squabbling. It cannot be a partisan issue. Standing charges have been around for a long time. It was the hon. Member for Bristol, North-East (Mr. Palmer), who worked for a number of years in the electricity supply industry, who reminded me that standing charges for electricity date back to the 1880s. Consequently, they have been around for nearly a century. We know that they have been a subject of concern for several years.
  In 1976 the then Government asked an interdepartmental group of officials to review the scope for helping poor consumers by adjusting the structure of energy tariffs, or by other means such as introducing special concessionary tariffs or free allowances of gas and electricity. The future of the standing charge was at the heart of the 1976 study. The then Government produced a carefully argued document entitled "Energy Tariffs and the Poor", which set out the consequence of making tariff changes, some of which would have had the effect of abolishing the standing charge. That is at the heart of the present political debate.
  The interdepartmental group considered four options. The first option was a flat rate, which I suspect is favoured by my hon. Friend the Member for Beeston, but I want further to consider what he said about unit charges. A flat rate would not be so dissimilar from what he was proposing. He advocated that consumers should pay for what they consume unit by unit with no extras, just as we pay for a pound of apples at the greengrocer's shop or for a pint of beer in a pub.
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  The second option was to halve the standing charge and to put the extra revenue that would come from the standing charge at its full level on to the unit charge.
  The third option considered by the 1976 group was a two-tier inverted tariff whereby there was a cheaper rate for the first units consumed, and then a higher rate after one crossed the particular threshold from the cheaper rate to the higher rate.
  The fourth option was an idea that initially came from Japan, and which is of oriental complexity. It is a three-tier inverted tariff whereby instead of a standing charge there would be a lower rate for the first few units of consumption that would be set about 10 per cent. below the norm. The norm would be a middle range achieved after one had consumed the requisite number in the lower first rate. Having passed through that second rate of tariff, one would come, if one were a large consumer, to a third rate set at a level sufficiently above the norm to yield in overall terms the same income as would have been yielded from the previous existing tariff—in other words, to make up the shortfall for the first initial tranche of units being sold at a discount.
  Those four ingenious alternatives to the present system were examined and the consequences of imposing those tariffs were examined in relation to different categories of consumers, particularly those consumers about whom we are all most exercised—poor consumers. It showed that some consumers would benefit from each of those changes in tariff as against the existing system. It also showed that in each and every case many consumers would be worse off if the different tariffs were applied. Sadly for the purposes of making progress, those who would suffer a detriment as a result of any one of those changes would include just as many poor people. Indeed, it would include many people who were as poor if not poorer than those who were in the categories that would benefit.
  That came about first because of the one crucial stumbling block to an easy solution to the problem, which is the simple proposition, which I fear is wholly true, that poor consumers are not necessarily small consumers. That means that action that is designed to assist small consumers does not necessarily assist poor consumers as a whole if the consequences are to impose detriments on those who are larger consumers.
  That leads me to the second crucial stumbling block to an easy solution found by the 1976 group, which is that because of the industry's financial position, then and now, any shortfall in revenue resulting from giving concessions to one group has to be made good from the rest. That led the interdepartmental group to say in paragraph 8 of the report:
  "We are satisfied that there is a sound case in economic principle for a tariff structure under which standing charges are maintained separate from the unit consumption charge. Though costing cannot be exact the industries' tariffs aim to charge customers what it costs to supply them. This is the appropriate way for the industries to comply with the obligation, which rests on each of them under their governing statutes, not to discriminate or show undue preference as between classes of consumer and individuals."
  That is nothing more nor less than a defence of the principle of standing charges. The overall document, which is an impressive and cogently argued one, won the full-hearted commendation of the then Secretary of State for Energy, the right hon. Member for Bristol, South-East (Mr. Benn), who said in his signed foreword to the document:

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  "After considering the group's report, the Government have concluded that none of these possibilities offers a satisfactory way of helping poor consumers with their fuel bills."
  Thus, standing charges survived the 1976 review.
  The Government have had to take up the torch this year following the clear indications from the public and from hon. Members on both sides of the House that it is time to examine this matter afresh because of the extent of public concern about standing charges. In reconsidering the evidence, we have taken account of the views of a large number of colleagues and a large number of groups outside Parliament. This has been a wholly fresh look at the matters examined in 1976 which has taken us into detailed consideration of tariffs not just for electricity, as was done in 1976, but also for gas.
  Our initial aim was to see whether the conclusions reached by the interdepartmental working party in 1976 and endorsed by the then Government through their Secretary of State, the right hon. Member for Bristol, South-East, were robust against today's tariff levels, today's standing charge levels and the overall circumstances prevailing.
  Our examination is not completed because, having done the initial work of breaking the ground and reaching the sad conclusion that on the figures the balance of advantage and detriment applying the various alternative tariff proposals remains much as it was found to be in 1976, we thought that on this occasion we had to go further, that it was not sufficient to confine the matter wholly to Whitehall and nor was it sufficient on this occasion to leave the matter where it was without asking for some action from the industries on the way in which standing charges were applied to all their consumers.
  We took two new initiatives. For the first time, with the full agreement of the industries, the principles of the standard charge are being subjected to independent analysis by accountants and management consultants from the City of London. Never before has there been such an examination by people outside the Government and the public sector. We asked for their report to be concluded speedily, and we expect it to be available shortly. As my right hon. Friend the Secretary of State said earlier today, the results of their examination will be published in the new year. What they have to say will be of fundamental importance in determining what the industries should do about standing charges.
  What we are concerned to know is not merely whether standing charges are fair in principle—whether they reflect, as the 1976 group concluded that they did, a valid distinction between two different categories of cost—but also whether the level of standing charges, whatever the case may be on the principle, is proper and not merely a convenient mechanism for passing on inflated costs to the consumer.
  The auditors have been asked to satisfy themselves that the level of standing charges properly reflects fixed costs, that the charges imposed on customers are as equitable as can be reasonably hoped, and that the costs are not exaggerated by inefficiency in the industries.
  I am happy to say that this proposal for a wholly independent audit has been welcomed in the House and, if my right hon. Friend's mail bag is anything to go by, by groups outside as well.
  Our second initiative is to make a specific proposal to the industries that standing charges be limited to not more than 50 per cent. of any bill to help small consumers. To
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  put at rest the mind of the gentleman who contacted my hon. Friend, I can say that there is no counterbalancing proposal that, where the unit charge is higher than the standing charge, the standing charge should be raised to that same level. That would be an iniquitous proposal. I assure him that that plays no part in what we have suggested.
  This measure is designed to relieve the industries and Members of Parliament of quite the most painful cases that come to our notice at advice centres such as I hold in my constituency. Quite often I meet a pensioner with a gas bill of perhaps £11 for a quarter, of which £9 is the standing charge.
  It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
  Mr. Mellor: It worries me and other colleagues when pensioners present themselves in such circumstances. The effect of what we have proposed to the industries would be that the standing charge for small consumers would be pulled down to the same level as the unit charge. In the oft-quoted case of the pensioner for whom the unit charge is only £1 or £2 a quarter—as it might well be in a summer quarter—the bill would be dramatically reduced.
  We made our request because we recognise the resentment felt by some small consumers, particularly the elderly, when standing charges comprise the bulk of their bills. We have asked the industries to calculate how many people would benefit from our proposal. They estimate that about 1 million gas consumers would benefit and perhaps as many as 2 million electricity consumers, and that about half would be pensioners.
  It is fair to say that not all beneficiaries would be poor. Some, for example, would be second home owners in good circumstances, who merely have a supply which they do not use much. I acknowledge that, but in defence of our proposal I should point out that a recent study by researchers at the University of York showed that the benefit is tilted towards the poorer off, in that a greater proportion of beneficiaries of such a scheme are poorer off than the proportion of poor people in the community as a whole. Also in defence of our proposal, and the suggestion that some undeserving people will benefit, I should point out that no change in tariff can be targeted precisely only at the poor. As I have already said, consumption levels are not related to means.
  We believe, however, that the industries should accept our suggestion. Not to do so would, as my hon. Friend the Member for Poole made abundantly clear, fly in the face of public opinion and in the face of sincerely held opinion in many parts of this House. In our opinion this measure is needed and should and commend itself to the industries as a way of retaining public confidence in their operations and as a means of improving consumer relations. Indeed, knowing the extent of the worry felt by small consumers in this connection, I cannot help feeling that had the industries been in the competitive sector they would have had to respond to public criticism by introducing such a measure long ago.
  As I have the opportunity to dilate in more detail than is usual on these occasions, perhaps I should say a word about the cost. It has been quantified at about £16 million for electricity and about £20 million for gas. Those are small amounts in the context of a total turnover of £8

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  billion in the electricity supply industry and more than £5 billion for the gas industry. If the industries accede to our request, we hope that those sums can be swallowed up by greater operating efficiencies. However, there could be a small impact of perhaps 2p or 3p a week on the bills of other consumers. I acknowledge that, but it is unavoidable, because such are the delicate economics of the industries that any concession has to be paid for by other consumers. Neither the industries nor the Government can flout the laws of mathematics in that regard. That was clearly understood and underlay the study in 1976 and has, equally as clearly, for the same reasons, underpinned the consideration that we have been giving to these matters this year.
  I want to explain a matter that has caused some concern in the debate and which was raised, in particular, by the hon. Member for Ashfield. I have made it clear that we have asked the industries to accept our proposal. We have no legal power to direct them to do it because ever since those industries were set up 35 years ago in their present nationalised form, tariffs have clearly fallen within the day-to-day management responsibilities of the industries, and those, by statute, are exclusively a matter for the industries and not for the Government.
  It must be clearly understood that the Government have no legal power to compel the industries to take a different view, just as the derivation of the standing charge has nothing to do with either the will of this or previous Governments. It is a matter for the industries to consider the best way to carry out their obligations fairly under the statute. As the 1976 report made clear, they must not show undue preference between one class of consumer and another. However, the Government are entitled to tender advice to the industries on matters of public concern and that is why we have made the proposal that we have.
  Mr. Edward Rowlands: Has the hon. Gentleman any reason to think that the industries will not accept his advice?
  Mr. Mellor: I hope that they will accept the advice. They are presently considering it and would prefer to await the outcome of the auditor's report before accepting it.
  Mr. Rowlands: That will be a long time ahead.
  Mr. Mellor: We are expecting the auditor's report literally within the next two weeks and hope to be able to make the results available in the new year.
  I hope that the industries will accept our advice. They have not said that they will and I cannot anticipate that. However, I think that I would be right in saying that it would be the mood, certainly of those hon. Members present tonight, that they should do so.
  As I have made clear, final decisions on the future level of the standing charge and other issues will have to await the outcome of the auditor's report. I do not want to build up false hopes about the complete abolition of standing charges, nor the abolition of standing charges for a particular category of consumers, for example, pensioners. There is a case for a standing charge of some kind. No one can deny that the industries incur some costs in supplying consumers, whatever their consumption. The industries must lay on and maintain a distribution system to each home and supply a meter to monitor supply. Those
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  and other costs are prima facie independent of consumption and it is impossible to deny their existence. I say again that that was the conclusion in 1976 and those basic underlying circumstances have not changed today.
  The problem that lies in the way of abolishing the standing charge is by no means exclusively based on the fact that there is a rationale for differentiating between costs of supply and consumption. The real problem that lies in the way of its abolition is that standing charges raise about £500 million for each of the two supply industries. Just as the Labour Government did in 1976, we must work on the basis that that shortfall would have to be made good by increases in other parts of the tariff. As my hon. Friend the Member for Poole has made clear, the consequence to the industries of abolishing the standing charge—which some hon. Members have asked for, but not, I know, my hon. Friend the Member for Poole—would be an increase in the unit rate of around 15 per cent. for each industry. The effect of that needs to be most seriously considered by any who advocate such a course. With the assistance of the industries, we have estimated that abolishing the standard charge would increase the bills of about 40 per cent. of all electricity and gas consumers.
  Mr. Haynes: The Minister said that the proposal would cost £500 million. He made no reference to the massive profits that the energy industries are making. Has he taken them into account?
  Mr. Mellor: Such massive profits do not exist in reality. The electricity supply industry, with its turnover in excess of £8 billion, barely breaks even in the view of even the kindest of accountants. When interest is taken into account, it makes a loss. The profit, after tax, by the gas industry in the last financial year was £144 million. That represents a return on assets of 1·4 per cent. That is a decline from the position in 1978–79, when it made a profit of £172 million, or a 2·4 per cent return on assets. That profit of £144 million is not much in the context of a capital investment programme to secure gas supplies and their efficient distribution in the next few years.
  The hon. Member for Merthyr Tydfil (Mr. Rowlands) asked about the gas levy, which merely reproduces for the old gas contracts the impact of the petroleum revenue tax imposed by the Administration of which he was a member, on oil and newer gas contracts. It is neutral in relation to profits. The levy is a way of removing windfall profits from a sector which was arbitrarily left out in the decision by the Labour Government to impose petrol revenue tax on the rest of North Sea activities, including new gas contracts.
  Mr. Rowlands: Do the figures include the new gas levy?
  Mr. Mellor: The figures relate to the position after the gas levy has been taken into account. It is not relevant to profitability. The debate is not partisan, and I want hon. Members to recognise that the obstacle to abolishing the standing charge is the impact that it would have on some consumers. All consumers are not necessarily small consumers, and there could be an adverse effect on many poor families. According to our detailed examination, abolishing the standing charge could make some families in extreme circumstances worse off by several pounds a week.
  Mr. Nicholas Baker: I apologise for not being here earlier, Like my hon. Friend the Member

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  for Poole (Mr. Ward), I have received many representations about standing charges. They have all been about the standing charges being inflexible and sometimes amounting to more than the cost of the energy consumed. No one has said to me that standing charges should be abolished. Consumers want them to be graded and more flexible, because they create hardship for many elderly and poor people.
  Mr. Mellor: I am glad that my hon. Friend, another representative from the county of my birth, should say something with which I agree. His point endorses the Government's view that if the industries accepted our proposals that would do a great deal to satisfy the anger of many who are worried about the plight of small consumers.
  I shall give a few more details about the impact of the abolition of standing charges. I appreciate that only one hon. Member participating in the debate has advocated that policy. However, it finds a place in the contributions of a number of hon. Members at Question Time. The subject is often raised in public debate and this is an opportunity for the Government to make clear why it is not such an easy proposition to accept as some might imagine.
  We have estimated that, among the 40 per cent. of gas and electricity consumers whose bills would have to increase if the income yielded from the standing charge had to go on the unit charge, there would be about one million households with pensioners at their head. About 350,000 of that 1 million pensioner households would be poor. We estimate also that among those whose bills would be increased would be about half a million households with incomes up to or around supplementary benefit level.
  Anyone who used more than 200 therms of gas a quarter would need to pay more. That amount of gas is not very much. It would cover family hot water from a multi-point plus a gas cooker in fairly regular use, plus a gas fire for about six hours' use a day. One is dealing with the average family. If one expressed 200 therms in another way they would cover a single large gas fire on for 11 hours of the day, which might cover the circumstances of a number of single people as well. We estimate that nearly 30 per cent. of pensioners on gas would lose from that proposal.
  With regard to electricity, anyone using more than 900 kilowatt hours a quarter would lose and end up paying more if standing charges were abolished. That is the equivalent to a family using a normal electric light and refrigerator plus eight hours a day with a single-bar electric fire. One is not talking about a number of washing machines, hi-fi, and equipment of that kind before that barrier is crossed. We estimate that that barrier is crossed so easily that about 30 per cent. of pensioners using
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  electricity would lose. No one should advocate the abolition of standing charges without the most careful thought. Removing standing charges altogether would cause hardship to many.
  I shall discuss the proposal for the abolition of standing charges for pensioners. There are 1,500,000 pensioners benefiting materially already from the DHSS heating allowance, which is now set at about £300 million for the coming winter. The cost of abolishing standing charges for pensioners would be a further £300 million and it has to be asked whether that would represent good value for money. I understand that that proposal will win an easy round of applause at public meetings where there are a number of elderly people present. However, is it a proper way to spend public money?
  I suggest that there are a number of reasons why that proposal has to be looked at with great caution. First, the distribution of benefit would be inequitable and unrelated to need. Secondly, the quantity of assistance would depend arbitrarily on which fuel the household uses. Thirdly, no benefit would go to those people who are not registered consumers. That would include many pensioners in rented accommodation. This is a selective list. There are other compelling reasons against the proposal. Of the principal reasons, the fourth would be that it would lead to a significant increase in the bills of other consumers including many who may not be pensioners but who are probably worse off than many pensioners.
  The Government are committed to doing all they can for pensioners within available resources. Our record bears comparison with that of any of our predecessors. It is vital, and successive Governments have said this, that help should be given in the most effective way possible. The Government's review of the issue has, as I hope the past half hour may have helped to establish, been as thorough as we can make it.
  Our work has established that tariff juggling is not the answer. The previous Government also reached that conclusion. Final judgment on the level of standing charges must await the outcome of the auditor's report, which we expect shortly. The independent evidence that the report will provide will be invaluable in helping industries to reach conclusions on tariff policies which are based on objective analysis and which, I hope, will command the confidence of all consumers.
  The Government will continue to play a helpful role as the protector of the public interest in assessing the evidence and, where necessary, making our views clearly known to the industries, the House and the country.
  Question put and agreed to.
  Adjourned accordingly at twenty minutes past Ten o'clock.

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

National Health Service: Resources
Lord Molloy: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what reductions they are contemplating in the staff and equipment of the National Health Service and in what areas.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, over the period since 1979 neither the NHS as a whole nor any region within it has suffered any decrease in resources, and none is now contemplated. On the contrary, the overall increase in services over the same period has been 5½ per cent. or more, and further growth is planned for 1983–84.
Lord Molloy: My Lords, I am very grateful to the noble Lord the Minister for that reply, which seems encouraging except when it is put against the facts. Does he realise that every time we get a statement of that kind from the Government, some great hospital, for example, Great Ormond Street and Tadworth Hospitals, are put under threat? At this very moment there are hospitals in Glasgow, and in particular the leukaemia wards, under threat of closure. There is the leukaemia ward in the East Birmingham hospital which is now under threat of closure simply because they cannot find staff. Would the noble Lord be prepared to look at the examples that I give, and perhaps inform me that the fears I have expressed on behalf of those hospitals will not be realised—or will they perhaps be realised?
Lord Trefgarne: My Lords, I will certainly look into the specific examples the noble Lord has referred to and let him know the position in regard to them. The question of Great Ormond Street has, of course, been discussed in your Lordships' House on more than one occasion and I do not think I need to repeat what has been said about that.
There are two real answers to what the noble Lord is asking: first, on the question of priorities, we do need to establish the right order of priorities, because there is a finite sum of money available for the health service, not an unlimited sum of money, as some people seem to think. The other thing is that we do necessarily have to decide the priorities to keep the system going smoothly. I hope the noble Lord would not want us to depart from that.
Baroness Jeger: My Lords, can the noble Lord say whether the figures he gave relate only to the hospital
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service, or are they totals for the whole of the NHS, including the family doctor service and ophthalmic and dental services for which the charges to the public have gone up?
Lord Trefgarne: My Lords, the figures I gave related to the Question on the Order Paper, which was about the National Health Service as a whole. The financial considerations so far as the family practitioners are concerned are, of course, different.
Baroness Masham of Ilton: My Lords, may I ask the noble Lord if he is aware that I was at a reception last week at the London Hospital and an occupational therapist told me that that district was thinking of not supplying the Roho cushion to paralysed people? If the noble Lord is not aware of what a Roho cushion is, it is a special cushion filled with air which can stop people from getting pressure sores, thus keeping them out of hospital and saving money. Would the noble Lord please look into this and let me know?
Lord Trefgarne: My Lords, I will certainly look into the specific case which the noble Baroness has drawn to my attention. I suspect that the same arguments will apply in that case as in the cases that the noble Lord, Lord Molloy, put to me—namely, the question of priorities.
Lord Hooson: My Lords, is the noble Lord aware that over a quarter of the annual cost of the National Health Service seems to be administrative costs? If there is to be a cutting down or slimming of services, could it be confined to the administration, rather than to the medical and associated services?
Lord Trefgarne: My Lords, I certainly agree that that is an area that needs to be very carefully looked at. It is not always the case, however, that administrative expenditure is misspent. For example, I heard of a case recently where it paid to provide a further private secretary for a particular consultant because it freed the consultant to get on with his proper work.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware of the profound concern which exists in this House, as expressed by the noble Baroness and by my noble friend, about individual cases and units, and indeed about hospitals like Tadworth? Is he able now to tell the House, in view of the encouraging statement he has made, that reconsideration will be given to the closure of these units and this hospital? His answer to that would be heard very carefully by all of us and by the country.
Lord Trefgarne: My Lords, there are two points, as I was saying to the noble Lord, Lord Molloy, which we need to take into account when considering specific cases like Tadworth. They are, first of all, the priorities, but, secondly, we must ensure that we get the very best value for money from the funds that we can make available. In the case of Tadworth—and the noble Lord will know that my honourable friend is considering that matter specifically and we have made additional funds available in the short term—that hospital at the moment is less than half used, and I do not think that that is the best use of the resources available.
Lord Hale: My Lords, would the noble Lord bear in mind that in the case, for example, of Kings College Hospital, where I have had the good fortune to have had almost continuous care for 12 months, the question of administrative costs is very largely a question of definition? They have a very remarkable system there under which the patient can spend much more time at home, with less cost to the hospital, by utilising administrative services and giving the patient special examinations from time to time at the hospital in the various departments, and supplying special treatment at those interviews.
Lord Trefgarne: My Lords, the noble Lord is right to point to certain changes in some of the procedures within the National Health Service in recent years—for example, the greater use of day surgery and the greater use of short stay facilities, which frees beds to be used by other patients. But one does have to remember that such arrangements do sometimes throw a greater burden on the local social services.
Baroness Robson of Kiddington: My Lords, does the noble Lord agree that it is generally accepted that the National Health Service needs an increase of between 1 per cent. and 1½ per cent. per annum for demographic changes which, against 5½ per cent., in my view does not leave anything for growth? Will the Minister please ask the Secretary of State not to talk about growth.
Lord Trefgarne: My Lords, with respect I do not think that the Secretary of State needs any lessons from me on how to address himself to these matters. We have more than covered the growth in resources required by the demographic changes to which the noble Baroness refers—for example, there has been the increase for the elderly, of which, I have no doubt, the noble Baroness is very much aware. This is a matter of which we, too, are aware, and the increase in resources that we have made available has more than covered that particular point.
Lord Molloy: My Lords, is the noble Lord aware that, in addition to the very valid point made by the noble Baroness, there is apprehension running through all grades of staff throughout the National Health Service? As I have said, they hear that there are to be improvements and that the NHS is safe in the hands of this Government, but within a few weeks of such statements there are threatened closures which stretch from Surrey, through London, Birmingham and Glasgow. Will the Minister please give some assurances on matters which are perturbing staff and patients about what appear to be promises made on the one hand and the reverse being applied when the promises have faded away?
Lord Trefgarne: My Lords, I am not going to give an assurance that money misspent in the health service will continue to be misspent or that half-empty hospitals will continue to remain so when there are other facilities nearby that could equally be used.

Schools: Subversive Literature
2.45 p.m.
Viscount Massereene and Ferrard: 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 existing measures necessary to prevent the spread of subversive literature throughout our schools, especially when it is aimed at undermining the authority of school teachers.
The Earl of Swinton: My Lords, the Government would deplore any attempt to undermine the authority of teachers, and we look to schools and local education authorities to take action to deal with any such attempt. We have at present no plans to introduce additional powers in this field, but if my noble friend has specific proposals in mind we should be glad to consider them.
Viscount Massereene and Ferrard: My Lords, while thanking my noble friend for that Answer, may I ask whether he is aware—I am sure he is—that the media are increasingly reporting the physical violence and obscene abuse that is being inflicted on teachers? Does he further agree that some of this is stirred up among pupils by various items of literature that fall into their hands? Further, is he aware that I have heard reports that literature is being distributed in the Midlands telling pupils to harass their teachers, the excuse being given that education imprisons the mind?
The Earl of Swinton: My Lords, I am not surprised that when violence takes place in schools that is the sort of thing the media cotton on to, because there is not an awful lot of newsworthy material in a school that is working peacefully, with the pupils sitting happily doing their lessons and where all is well. I do not mean to be flippant because, of course, we are concerned about any school where violence occurs, especially towards teachers. I do not think there is a particular amount of violence at the moment. Each case must be looked at on its merits and it is up to the local education authority to deal with it.
Baroness Gaitskell: My Lords, is not this Question a figment of the noble Viscount's imagination? Many of us have children and grandchildren and we have never heard of any such thing happening among teachers. Is it not wrong to frighten people in this way?
The Earl of Swinton: My Lords, I am not here to defend my noble friend's Question but I am afraid, unfortunately, that it is not a figment of his imagination. If the noble Baroness cares to go to the Library I am sure she will find reports of violence in schools unfortunately occurring from time to time.
Lord Avebury: My Lords, has the noble Earl's attention been drawn to two publications that are highly respectful not only to teachers but also to senior officers of the armed forces and even to Members of your Lordships' House? I refer to the Beano and the Dandy.
Viscount Massereene and Ferrarad: My Lords, is my noble friend aware that on 22nd November it was reported in the press that a group of teachers in Leeds had said that in a single year there were 73 violent physical attacks on them?
Baroness Masham of Ilton: My Lords, may I ask my noble kinsman if he agrees that it is not very helpful to the authority of schools when the teachers go on strike, and that that is a bad example to the children?
The Earl of Swinton: My Lords, that question was not a plant. I agree, as I do occasionally, with my noble kinswoman.
Baroness David: My Lords, does the Minister agree that we do not want censorship and that, if anyone is anxious about what is coming in, it is up to the head and the governors to decide what is suitable or not?
The Earl of Swinton: My Lords, I think that is very much the case. I am grateful to the noble Baroness for pointing that out.
Lord Leatherland: My Lords, can the Minister give us some examples of what is called subversive literature that is distributed in schools, so that we may avoid it?
The Earl of Swinton: My Lords, I do not think it is up to me to produce the literature. That is for the noble Viscount who asked the Question.

London Dockyards: Lysander Development Scheme
2.50 p.m.
Lord Nugent of Guildford: My Lords, I beg to 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 new jobs were estimated to be created by the Lysander development scheme in London Docklands, and what steps they propose to take to ensure that this prospect is not frustrated by local political opposition.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bell win): My Lords, I understand that about 6,800 jobs would be produced. The Government, in consultation with the London Docklands Development Corporation, are considering urgently what action might be taken following the recent decision of the GLC not to proceed with the release of the site.
Lord Nugent of Guildford: My Lords, I thank my noble friend for that partly reassuring Answer. Is he aware that 6,800 new jobs in this desolate dockland area are a wonderful prospect which should not be lost on any account? Is my noble friend able to say more definitely that there could be the prospect of the Secretary of State vesting this land in the Docklands
366
Development Corporation, which is already making such splendid progress in the redevelopment of docklands?
Lord Bellwin: My Lords, vesting is cetainly an option which is open to the Secretary of State and one which my right honourable friend will doubtless be considering, but I cannot today say more about that.
Baroness Fisher of Retinal: My Lords, can the noble Lord tell the House whether the 6,800 jobs that he has just mentioned will be in manufacturing industries, and, if so, what industries? Alternatively, will they be commercial jobs, light industry jobs, office jobs or whatever? It would be good if the House could have some clear idea of the type of spin-offs that there might be from these industries.
Lord Bellwin: No, my Lords, I cannot do that because the numbers and the particular types will depend entirely upon the final scheme that a developer will decide to put on to the land if it becomes available to him. The problem as regards the point which my noble friend raises is that at the moment, having refused to release the land, it is possible that the situation as it has pertained for some years will continue—that is, that nothing will happen. I should have thought that that was a matter for much greater concern than the type of jobs among the 6,800 to which I referred.

Madrid Conference on Security and Co-operation
2.53 p.m.
Lord Beloff: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on the current position in the meeting of the Conference on Security and Cooperation in Europe at Madrid.
Lord Skelmersdale: My Lords, the conference resumed on 9th November. Together with our partners and allies, we have drawn attention to violations of the Helsinki Final Act, particularly by the Soviet Union and Poland, and have stressed the need for a balanced and substantive concluding document covering all areas of the Final Act. To this end, we have jointly put forward amendments to the draft concluding document tabled by the neutral and non-aligned countries.
Lord Beloff: My Lords, while thanking the Minister for that informative, if somewhat depressing, reply, I should like to ask whether the continued refusal of the Soviet Union and the Warsaw Pact countries to honour the spirit of the Helsinki Agreement in so far as contact between peoples is concerned, does not make total nonsense of the claim by Mr. E. P. Thompson and other leaders of the so-called peace movement that their organisation has serious ramifications on the other side of the Iron Curtain?
Lord Skelmersdale: My Lords, we have continually pressed the Soviet Union and its allies on human rights, and. of course, CSCE is concerned largely, but not exclusively, with that subject. I would agree with my noble friend that there are considerably greater human rights in the western part of Europe than in the eastern.
Lord Jenkins of Putney: My Lords, I think the noble Lord on the Front Bench might perhaps agree that the peace movement in this country does not, as suggested by the noble Lord, Lord Beloff, have serious ramifications in Eastern Europe. What it has sought to do is to make contacts in that area. Is it not the case that peace cannot be assured unless such contacts are established, both officially and unofficially?
Lord Skelmersdale: My Lords, I would say that that was exactly the point of a conference such as is currently being held in Madrid. Talks cannot be anything but good. The question is whether what the noble Lord called unofficial talks will have the desired effect, and will effectively do better than the official talks. I rather doubt it.
Lord Harmar-Nicholls: My Lords, bearing in mind the last question and answer, does my noble friend not think that it would be a good idea if the activists at home were to hold their horses until they have made their contacts abroad and they look like producing something equivalent?
Lord Skelmersdale: My Lords, it is an undeniable human right in this country, and I think I am right in saying in the whole of Western Europe, that people should be allowed to make their views known with all the force at their command. It is possible, of course, to go off at a slight tangent. So I would agree with my noble friend, at least as far as he goes, that one should think very carefully before demonstrating, or whatever, for or against a particular point of view.
Lord Cledwyn of Penrhos: My Lords, in the light of what the noble Lord has said, can he say whether the Government are pressing for amendments to the final draft on the subject of human rights? If I may refer to a specific case, can the noble Lord say what the response of the British Government is to the appeal by the three wives of the dissidents in Russia who are suffering under the Soviet Government, one of whom I think is Doctor Orlov? Can the noble Lord say what we are doing about that specific case?
Lord Skelmersdale: No, my Lords, I am afraid I cannot answer the noble Lord's specific point, but I shall of course take the opportunity to write to him. As regards the amendments which are still required to the draft final document, there are, in fact, five of them, four of which concern human rights. Amendments are required, first, on human contacts; secondly, on experts meeting on human rights in the future; thirdly, on the position of trade unions; and fourthly, on official monitoring groups for the Helsinki Final Act. Last but by no means least, there is a conference on disarmament proposed in the draft Final Act and one of our objectives is to seek a real mandate for this and also agreement on the zone of its application.
Lord Broekway: My Lords, would the Minister not agree that during these long discussions the non-aligned nations have sought to bring agreement between the two sides? Is he aware that, while one denounces passionately the denial of human liberty in the Soviet Union, there have also been charges against the western countries? Is it the case that the communiqué of the neutral nations is of such a character that agreement is likely to be reached? Also, what is the Government's attitude to the proposal for a European disarmament conference?
Lord Skelmersdale: My Lords, I would agree with the noble Lord, Lord Broekway, that without the non-aligned nations the current draft document would not be on the table and the Government are extremely grateful to them for that. However, it is also true to say that both sides need an amplification of it and want to make changes to it. I am afraid I have lost the other point that the noble Lord raised. Perhaps he would care to repeat it.
Lord Elvvyn-Jones: My Lords, is it perhaps possible to generate more action by the United Nations Human Rights Commission in this field? They have the power at any rate to inquire, and possibly even to interpose from time to time.
Lord Skelmersdale: My Lords, the possibility is always there.
Baroness Trumpington: My Lords, would my noble friend agree with my experience in the United Nations, that it is difficult to come to any terms on human rights with the Soviet Union, who do not recognise that there is a problem of human rights?
Lord Skelmersdale: My Lords, I do not have the experience to which my noble friend refers; I was not in her place at the time. However, I should think that on balance she is probably right.
Lord Broekway: My Lords, while appreciating the Minister's reply to me, I should like to repeat the question which he apparently missed. What is the attitude of the Government to the proposal at this conference for a European disarmament conference?
Lord Skelmersdale: My Lords, as I said in answer to an earlier supplementary question—and I am grateful to the noble Lord, Lord Broekway, for repeating his own—we very much take the point that it should be there, but with the provisos that I mentioned earlier; namely, that there must be a real mandate and there must be agreement on the zone of application before it can become effective.

Child Care Bill [H.L.]
Lord Avebury: My Lords, I beg to introduce a Bill to abolish local authority resolutions assuming parental rights and make provision for the making of care orders in cases where a child is already in the voluntary care of a local authority; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Avebury).
On Question, Bill read a first time, and to be printed.

National Insurance Surcharge Bill
Brought from the Commons, endorsed with the Certificate of the Speaker that the Bill is a Money Bill; read a first time, and to be printed.

Health and Social Services and Social Security Adjudications Bill [H.L.]
3.2 p.m.
Lord Trefgarne: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Trefgarne.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Schedule 6 [Medical practitioners etc.]:
Lord Trefgarne Lord Trefgarne moved Amendment No. 86:
Page 56, line 47. leave out ("(staff of health authorities)").
The noble Lord said: This first amendment is in the nature of a drafting amendment. The reference to "health authorities" in the words in brackets would be misleading inasmuch as the definition of "health authority" in Section 128(1) of the 1977 Act, as amended by paragraph 29 of Schedule 5 to the Bill, excludes an FPC; whereas the intention is to include FPCs among the authorities which may employ officers in accordance with paragraph 10(1) of Schedule 5 to that Act. I beg to move.
On Question, amendment agreed to.
Schedule 6, as amended, agreed to.
Schedule 7 agreed to.
Clause 12 [Charges for various social services provided by local authorities]:
Lord Lyell Lord Lyell moved Amendment No. 87:
Page 14. line 22, leave out ("services") and insert ("any service").
The noble Lord said: I hope that it will be for the convenience of the Committee if I move Amendment No. 87 and speak to Amendments Nos. 88 and 89 together. When introducing subsections (1) and (2) of this clause during the Second Reading of this Bill before your Lordships, my noble friend indicated that the main aim of this clause is to bring greater consistency to the powers of local authorities who might, and indeed do, charge for day and domiciliary services. The three amendments that we propose seek to carry this process even further by making the wording of the new subsections to be inserted in the Bill as similar as possible. The amendments have one other purpose which is to make it clearer that the person whose means are to be taken into account in assessing the charge is the person availing himself of this service. I beg to move,
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 88:
Page 14. line 23, leave out ("them") and insert ("the service").
The noble Lord said: I have spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 89:
Page 14. line 24, leave out ("the services") and insert ("it").
The noble Lord said: This amendment is consequential and I have already spoken to it. I beg to move.
On Question, amendment agreed to.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 90:
Page 14. line 24, after ("services") insert ("(with the exception of home help services)").
The noble Lord said: I beg to move the amendment standing in the name of my noble friend and myself. The purpose of this amendment is to exempt home help services from charges by local authorities. A study in 1980 found that most home help organisers considered charges to be a deterrent to potential home help users. A study of the home help service in Warwickshire in 1977 found that clients paying full charges averaged 1·5 hours fewer per week than the average client, and that part-payers averaged 0·7 hours fewer.
The home help service is so crucial to the wellbeing and independence of many elderly people that it should be provided on the basis of necessity and without charge to the client. The charges for home helps have caused much distress in recent years. It has been the policy of successive Governments that:
"the amount of any charge is not to be such that a recipient would need, because of it, to seek supplementary benefit or an addition to supplementary benefit".
That comes from the DHSS Circular 53/71.
Since November 1980 it has not been possible to receive an addition to supplementary benefit for a local authority home help. Yet several councils have imposed minimum charges and many disabled and elderly people have been forced to give up home helps who they desperately need or go without some other necessity. The local authority associations have not specifically advised their members not to impose charges in these circumstances, but the AMA pointed out the hardship which would be caused if they did so, in AM A Social Services Circular 21/80. The Report of the Joint Working Group on Personal Social Services Charging Policies, on which much of Part VII of this Bill is based, recommended:
"The level of charge should not preclude those in need of the service from using it: in particular, people on a subsistence level of income should not be exposed to financial penalties in using services provided for their needs".
There is no doubt whatever that home help services are absolutely vital, especially to the home-bound, and many of these services go to people living on their own. Vital human contact is received from the home help service. It is vital to these people that this service should continue without any restriction. Elderly people are particularly independent and very often would rather go without the service than face a charge. Therefore, I ask the Committee to consider this

371
amendment very carefully indeed because it concerns a vital part of the caring community. I beg to move.
Lord Banks: I should like to support briefly what the noble Lord, Lord Wallace of Coslany, has said. This amendment would make sure that all who need home help would get it, or at any rate they would not be deterred from getting it on financial grounds. The noble Lord emphasised that there is no addition to supplementary benefit now available in order to pay for a local authority home help, and in the absence of that it seems that this amendment is necessary.
Baroness Lane-Fox: May I ask my noble friend the Parliamentary Under-Secretary whether he can give us any guidance as to the amount that is recovered by this payment for home help service? I agree with the noble Lord as to the vital necessity of the service, but I feel that everything is comparative and if enough is not brought in by having this on a payment basis then I should have thought that there was a good case for thinking again.
Lord Trefgarne: As the noble Lord has made plain, the intention behind this amendment is to exempt from charges all those people availing themselves of home help services provided by local authorities. I am afraid I have to tell him that in that endeavour the amendment is defective. It applies to charges made to the broad categories of disabled people provided with home help services under the National Assistance Act and the Chronically Sick and Disabled Persons Act, but does not extend to Schedule 8 to the National Health Service Act 1977, under which local authorities may also provide home help services for other clients and make charges.
Certainly the Government would not support an attempt to single out a particular client group for exemption whereas others, such as old people or problem families with equal need, were not exempt; but I do not think that that was in the mind of the noble Lord. Accepting, therefore, that the noble Lord's intention is that exemption from home help charge should apply to all clients, then I am afraid that here, too, the Government could not support the noble Lord's proposal. Our purpose in Clause 12 is to introduce consistency into charging arrangements between the various services. Given that local authorities will be obliged to take into account the ability of people to pay for these services and have the option, indeed, to waive charges altogether if they think necessary, we see no reason to single out the home help service for special legislative arrangements as proposed in the amendment.
Such arrangements are not a feature of existing legislation and would defeat the underlying purpose of this clause. I do not of course for a moment deny the importance of the home help service, particularly to people such as the ones the noble Lord described, but I do not think that we would be assisting those people by singling them out in the way that the amendment proposes, particularly having regard to the other provisions of Clause 12. As for the point raised by my noble friend, I have not got that figure in front of me. I will see if I can find it out and write to my noble friend.
Lord Wallace of Coslany: The noble Lord said that the aim of the Government was to obtain consistency in charges by local authorities. Is he aware that there is a widespread inconsistency at the moment, and that if the proposals of this Bill are carried forward that inconsistency will remain? The noble Lord said that the amendment is defective. That may be so, but he referred to Clause 12 and he has not yet come to the other amendments that I have tabled on this issue. This, to me, on the home help service in particular, is a personal matter of great principle. Therefore, I propose to divide the Committee on the principle, and if I am successful the Government may have the opportunity to amend the Bill in some way or another at a later stage.
3.15 p.m.
On Question, Whether the said amendment (No. 90) shall be agree to?
Their Lordships divided: Contents, 66; Not-Contents, 75.

DIVISION No. 1

CONTENTS

Amherst, E.

Kennet, L.

Amulree, L.

Killearn, L.

Ardwick, L.

Kilmarnock, L.

Aylestone, L.

Kinloss, Ly.

Banks, L.

Lawrence, L.

Beaumont of Whitley, L.

Leatherland, L.

Beswick, L.

Llewelyn-Davies of Hastoe, B.

Birk, B.

Bishopston, L.

Loudoun, C.

Blyton, L.

Lovell-Davies, L.

Burton of Coventry, B.

Masham of Ilton, B.

Clancarty, E.

Mayhew, L.

Cledwyn of Penrhos, L.

Mishcon, L.

Crook, L.

Molloy, L.

David, B. [Teller.]

Northfield, L.

Diamond, L.

Peart, L.

Donaldson of Kingsbridge, L.

Phillips, B.

Ponsonby of Shulbrede, L. [Teller]

Elwyn-Jones, L.

Elystan-Morgan, L.

Rhodes, L.

Ewart-Biggs, B.

Robson of Kiddington, B.

Fisher of Rednal, B.

Sainsbury, L.

Gaitskell, B.

Shannon, E.

Grey, E.

Stedman, B.

Hale, L.

Stewart of Alvechurch, B.

Hampton, L.

Stewart of Fulham, L.

Hooson, L.

Stone, L.

Hunt, L.

Strabolgi, L.

Ilchester, E.

Strauss, L.

Ingleby, V.

Underhill, L.

Irving of Dartford, L.

Wallace of Coslany, L.

Jeger, B.

Wigg, L.

Jenkins of Putney, L.

Wigoder, L.

John-Mackie, L.

Wootton of Abinger, B.

Kaldor, L.

NOT-CONTENTS

Adeane, L.

Davidson, V.

Avon, E.

De Freyne, L.

Balfour of Inchrye, L.

Denham, L. [Teller.]

Belhaven and Stenton, L.

Drumalbyn, L.

Bellwin, L.

Ebbisham, L.

Boyd-Carpenter, L.

Eccles, V.

Buckinghamshire, E.

Elliot of Harwood, B.

Campbell of Alloway, L.

Elton, L.

Campbell of Croy, L.

Faithfull, B.

Clitheroe, L.

Ferrers, E.

Cottesloe, L.

Fortescue, E.

Cullen of Ashbourne, L.

Gainford, L.

373

Glenarthur, L.

Northchurch, B.

Gore-Booth, L.

Nugent of Guildford, L.

Gridley, L.

Orkney, E.

Hailsham of Saint Marylebone, L.

Pender, L.

Porritt, L.

Hampden, V.

Portland, D.

Harmar-Nicholls, L.

Richardson, L.

Holderness, L.

Romney, E.

Home of the Hirsel, L.

St. Davids, V.

Hylton-Foster, B.

Saint Oswald, L.

Kilmany, L.

Sandford, L.

Kinnaird, L.

Skelmersdale, L.

Lane-Fox, B.

Somers, L.

Lauderdale, E,

Stamp, L.

Long, V.

Strathspey, L.

Lyell, L.

Sudeley, L.

Macleod of Borve, B.

Swansea, L.

Margadale, L.

Swinton, E. [Teller.]

Marley, L.

Terrington, L.

Massereene and Ferrard, V.

Teviot, L.

Trefgarne, L.

Merrivale, L.

Trumpington, B.

Mersey, V,

Vaux of Harrowden, L.

Milverton, L.

Vickers, B.

Mowbray and Stourton, L.

Wakefield of Kendal, L.

Wynford, L.

Noel-Buxton, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
3.23 p.m.
Baroness Masham of Ilton Baroness Masham of Ilton moved Amendment No. 91:
Page 14, line 25, leave out (", having regard to his means").
The noble Baroness said: This is a simple amendment, to delete "having regard to his means". It would not stop a local authority doing it, but if those words remain in the Bill, some local authorities may go in for the distasteful practice of means-testing simply because they think they should. Severe disability brings many problems and stresses to families. Many marriages break up and homes are disrupted. Aids can be of vital importance to disabled people and their families. My noble friend Lady Lane-Fox knows only too well what an advantage her special bed is and what a help her special hoist is, not only to herself but her helpers. Some people are not so lucky as she. Some local authorities do not help a disabled person if they live in a private house. I have been told by a consultant, social workers and occupational therapists that when a person becomes disabled and owns his house, they have recommended that he should sell the house so that he can be rehoused and then helped.
On-going disability involves many extra expenses. I feel so sorry for the single person who has worked and paid taxes and never used the state system for any benefits, and who then becomes disabled in middle-age from a disease such as multiple sclerosis. He then undergoes the demoralising and degrading process of means-testing. His private knowledge of what little he may have saved in the bank by careful living has to be declared and is bandied about the social services department. Canada dropped means-testing, as the administration of it cost more than what it was providing. May we be told how much means-testing costs in this country?
The criterion should be need and it should apply only to necessary equipment and aids. Better assessment and instruction should be given, and the aid or equipment should be on a loan basis. If a patient is
374
means-tested and is found to have over the limit specified in the means-test, then buys an expensive and vital aid and dies a few months later, what happens to the aid? All aids costing over £50 should be monitored and collected back when no longer needed. I suggest that aids under £50 should be provided without a means-test: some local authorities do that.
The Government pay out billions of pounds in unemployment benefit. Surely a scheme could be devised so that the unemployed and prisoners shut up in prisons could help to provide aids so that the disabled are helped to live in the community with what they need, instead of having to be scrutinised and interrogated. The Disabled Income Group knows only too well the extra expense severely disabled people have. They would prefer there to be no means-test, but the amendment does not go so far as that. I beg to move.
Lord Wallace of Coslany: I strongly support the amendment because it is most important to the position of disabled people. We in this country should be able to afford to give the disabled the necessary aids to living. Wonderful work is done, for example, by the voluntary organisations, but by introducing what is an unfortunate phrase into the clause the Government are doing a disservice. For that reason I strongly support the principles so eloquently expressed by the noble Baroness, Lady Masham, and I hope the amendment will have the support of the Committee.
Lord Boyd-Carpenter: May I ask the Minister to say what would be the effect of deleting the words as proposed by the amendment? It would seem to leave the local authority to fix charges on the basis that they were reasonable, and as I understand it, "reasonableness" in respect of these charges must include some consideration of the wealth or otherwise of the person concerned. A charge which would be reasonable for a rich man would be unreasonable for a poor one. Therefore, if my noble friend decided to meet the view of the noble Baroness, Lady Masham, would he be losing very much? If not—if it were likely that the local authority would, among other things, take the means of the person concerned into account—is there not something in what has been said in support of the amendment as to the rather disagreeable aspect of laying down a specific means-test? Perhaps my noble friend, when he replies, will address himself to that point, among others.
Baroness Darcy (de Knayth)Baroness Darcy (de Knayth) Following what the noble Lord, Lord Boyd-Carpenter, has said, when the noble Lord the Minister replies, when he deals with the point as to what is "reasonableness", can he say whether certain benefits—for example, the attendance allowance, supplementary benefits, special heating allowance, et cetera—would be disregarded, or would they be treated as income? It must be borne in mind when assessing the means of a disabled person that these items are to do with the additional cost of disability. As the Disablement Income Group has always argued, a person undergoing a means-test should not be assessed on the extra cost of disability; he should not be penalised for the extra cost of disabled life.
I should like very much to support my noble friend's amendment and to echo her request to the Minister to give some idea of the cost of means-testing a person. Furthermore, I wonder whether the Minister can say what proportion of people who are at present means-tested are found to be capable of making a financial contribution.
Viscount Ingleby: I should like to add the mobility allowance to the list of various allowances that my noble friend has just mentioned. This allowance, too, is given for a specific purpose. Will it be excluded?
Lord Trefgarne: I should like first to deal with the very last point that was put to me, by the noble Viscount. I can say that the mobility allowance is centrally provided, and what we are here discussing are services of, and provisions made by, local authorities. So I can at once assure the noble Viscount that the mobility allowance is not one of the matters that we are here discussing.
I now wish to turn to the point that was raised by, I think, almost everyone who spoke on the amendment; namely, the cost of conducting means-tests and the likely benefit to Government funds, or local authority funds, from such a system. I fear that at the outset I have to say that because these matters are all conducted in a different way by different local authorities, it is not possible to arrive at a single figure. However, I do not propose to rest my argument upon the question of the costs or savings, and though I shall be happy to look into the point that has been raised, I do not think that it is one that need persuade us one way or the other.
The amendment proposed by the noble Baroness is opposed to the main purpose of the clause, which is to bring consistency to the charging arrangements for local authority day and domiciliary services. It may assist your Lordships' Committee if I describe the present position, and then indicate the changes that we want to make. At present the powers of local authorities to charge for the services are set out in the Acts mentioned in Clause 12(1) and (2), on the one hand, and in Schedule 8 to the National Health Service Act 1977 on the other hand. The Acts mentioned in Clause 12 include the one to which the amendment refers; namely, the National Assistance Act 1948, which also contains the charging powers for the services provided under the Chronically Sick and Disabled Persons Act 1970. The Acts mentioned in Clause 12 empower local authorities to recover from persons availing themselves of any service provided under the section concerned such charges, if any, as the authority may determine, having regard to the cost of the service. Those words—having regard to the cost of the service—are important.
Schedule 8 to the National Health Service Act 1977, on the other hand, empowers local authorities to recover from persons availing themselves of services provided under the paragraphs concerned such charges, if any, as the authority considers reasonable, having regard to the means of those persons. As I say, that term appeared in the 1977 Act, and at that time the noble Lord, Lord Wallace of Coslany, and his
376
noble and right honourable friends were responsible for such matters, as indeed they were in 1948, when the National Assistance Act made the original provision for making charges.
In the case of certain services, such as home helps, as I said earlier, they may be provided under more than one charging régime, and I submit that it is desirable to secure greater consistency in these matters. So in essence we have two or three different statutory provisions for making the services available. All of the provisions enable charges of one kind or another to be made, and at least one provision enjoins us to have regard to the means of those persons being supplied.
The amendments proposed in the Bill thus seek to replace the requirement that authorities should have regard to the cost of the service in the Acts mentioned in Clause 12(1) and (2) by the requirement that they should instead have regard to the means of the person availing himself of the service. That will then mean that there is consistency in the charging powers for this group of services. We think it right that a local authority should be empowered, if it chooses, to recover some of the cost of the services from those who are able to pay. We also consider that if the authority makes a charge, it should be able to vary it according to the means of the person for whom the service is provided, so that no one who really needs a service is prevented by the charge from benefiting from it. I should perhaps emphasise that nothing in the clause requires a local authority to impose any new charge, or increase any existing charge. It leaves local authorities with full discretion to waive or rebate charges when they consider it desirable.
The amendment introduced by the noble Baroness refers only to the National Assistance Act 1948, and not, as I say, to the Acts mentioned in Clause 12(2). It thus introduces a further difference in local authority charging powers, with the result that those provided with services under the National Assistance Act (mainly physically handicapped people) would be in a position different from those provided with services under the Acts mentioned in Clause 12(2) (the elderly) or those provided with services under the National Health Service Act 1977 (mothers and young children, and those requiring help for the prevention, care and after-care of illness, and with handicap, including mental disorder). We do not believe that further difference between groups of people requiring services and indeed between one type of local authority service and another should be introduced by legislation in this way. Therefore I hope that in the light of the shortcomings to which I have pointed the noble Baroness will not wish to press her amendment.
Lord Boyd-Carpenter: I think that my noble friend overlooked the question that I put to him. I asked him—perhaps I may repeat it—what would be the effect of the deletion of the words referred to in the amendment? In particular, in deciding what was reasonable, would not the local authority have to take into account means and other matters, without the disadvantage of a specific means-test?
Lord Trefgarne: I would need to take some advice as to the precise legal implication of an amendment other than the one that is on the Marshalled List before us.
Lord Boyd-Carpenter: I asked the question in relation to the present amendment.
Lord Trefgarne: As I understood it, my noble friend was asking me what would be the effect of an amendment without the words to which he is referring.
Lord Boyd-Carpenter: Surely the point is very simple. We are discussing the amendment that is before us. If it is carried, the words will be taken out. I am asking my noble friend what the clause would mean if that happened. With very great respect, surely that is about as relevant to the present amendment as anything could be.
Lord Trefgarne: I had misunderstood what my noble friend was asking, and I apologise. As I understand it, removing the words in the way proposed would mean that, despite the Bill, we should be left with most of the inconsistencies to which I referred in my earlier remarks, and that would be a distinct disadvantage. I am sorry that I misunderstood my noble friend when he first put the point to me.
The fact of the matter is that a whole range of different provisions are available under the present charging régime. At least one of the provisions requires the question of means to be taken into account, and two or three different charging provisions are also in place, two of them having been imposed on an earlier day by noble Lords opposite and their right honourable friends. In this particular proposal we are seeking to tidy up the arrangements. We do not seek to impose new charges. We do not seek to cause local authorities to make charges where they do not at present make charges, and I believe that the proposal that we have made, whereby authorities ought to have regard to the means of those receiving the service, is a right and proper one. As I say, I hope that the noble Baroness will not wish to press her amendment.
Lord Somers: I agree entirely with the noble Baroness that a means-test is thoroughly undesirable. It is degrading and an absolutely unnecessary invasion into a person's privacy. As the Bill stands, a means-test is not specifically called for. I presume that there is every likelihood that it would take place, but it is not absolutely defined as being necessary. Would it not be possible to insert words to the effect that a means-test is not implied or is not to be used? Surely, if a local authority cannot decide for themselves whether a person is or is not wealthy enough to pay, then they have not sufficient intelligence to be occupying their position.
Lord Trefgarne: With respect to the noble Lord, it is not a question of intelligence but whether the local authority have the necessary information available to them. I must say that I am unrepentant about the words in the Bill. I think that they offer a much better régime for the future than has existed in the past. I certainly take the point made by the noble Lord. If I am reading correctly between the lines of the speech of my noble friend Lord Boyd-Carpenter, I think that he, too, has some reluctance to see imposed a means-test in the worst sense of that expression. So do I; but that is not what is proposed by this provision in the Bill. I rest on what I have said already.
Baroness Wootton of Abinger: We are all in favour of tidying up, of consistency and of avoiding unnecessary complexity. It seems to me that there are two criteria here. One is the criterion of the cost of the service and the other is the criterion of the person's means. In a sense they are related for one would only consider a person's means in relation to the kind of cost that was involved. Would it not be possible for the noble Lord the Minister to take this back again and to think of a formula which would bring both criteria into the Bill?
Lord Trefgarne: With respect to the noble Baroness, that is exactly what I am trying to avoid.
Lord Wallace of Coslany: Of course you are!
Lord Trefgarne: At present, the arrangements are (in some local authorities at least) that patients or recipients are required to pay a percentage of the cost of the service or of the item supplied. That, in some cases, is a very large sum of money indeed. It imposes a great burden on some people who are of limited means. In future, we should like to see the question of their means taken into account by the local authority—not just an imposition of a bald percentage of the cost of the service which is being supplied. I do not think that the cost of the service, as far as the recipient is concerned, is the right criterion. I think that the criterion that we propose on the contrary, the ability of the person to pay, is a more relevant one; and that is what I should like to see in the Bill.
Baroness Wootton of Abinger: I entirely agree with that. That is what I am trying to get at. The cost of the service is a factor that comes in because a service that is a very small one may be a very burdensome one to a person of very small means, while the cost of a service which is much larger may not matter so much to a person of large means. Would it be possible not to prescribe a specific percentage of the cost of the service (as I understand is the present position) but simply to say that these two factors would be brought into the picture?
Lord Trefgarne: If I may speak yet again on this matter, that would be to replace one complex, unsatisfactory system with another even more complex, and probably even less satisfactory.
Lord Leatherland: Clause 12 deals with charges which might be imposed upon people who are blind, deaf, dumb and crippled. If any of those people should happen to be old-age pensioners, are they to be subject to these charges, or are old-age pensioners to be exempt from them?
Lord Trefgarne: It very much depends on the other resources available to the old-age pensioner in question. Some old-age pensioners, particularly after the age of 70 so far as men are concerned, and 65 so far as women are concerned, are not means-tested. There is no earnings rule applied to old-age pensioners after those ages. That being so, they might have very substantial other means. I do not think that that would be a right criterion.
Lord Wallace of Coslany: Is the noble Lord referring to old-age pensioners doing newspaper rounds and earning fabulous sums?
Lord Trefgarne: My own father drew the old-age pension—or would have done so—after the age of 70, had he lived that long. He would certainly have been able to pay, I think, for the sort of facilities we are thinking about.
Baroness Darcy (de Knayth): The Minister talks a lot about having regard to a person's needs, but I do not think he has yet answered my question on disregard—which I hope he will, because it is very important. He said in answer to my noble friend Lord Ingleby that mobility allowance could be disregarded. What about all the other benefits designed to offset the extra cost of disabled life, such as supplementary benefits, dependants' allowance, et cetera? Will they be disregarded, or will they be treated as income?
Lord Trefgarne: I am not in a position to answer the noble Baroness precisely because I think we want to leave some flexibility to local authorities in this matter. I am trying to resist the suggestion that we are imposing some very formal, classified, precise, procedure in these ways; because we are not. We are saying to local authorities that they ought to be able to take into account the means of people. I hope that the noble Baroness will not press me too closely on that point because I should like to leave a good deal of discretion to local authorities on this matter.
Baroness Darcy (de Knayth): Do I gather from the Minister's reply that if it is left open to local authorities some local authorities may disregard those essential allowances and others will not, and that there will be disparity between them?
Lord Trefgarne: There will, of course, be guidance to local authorities in these matters and we shall have to see how that comes.
Baroness Jeger: Further to that point, can the Minister say whether he will be expecting the disregards to apply for capital for purposes of supplementary benefit?—which disregards do not include the surrender value of life policies or leases of one's home as distinct from owner occupation. If that is so, there will be considerable hardship.
Baroness Masham of Ilton: I think this is a very complicated matter and I, personally, feel very strongly that the Government have got it wrong. I think that the people who do not smoke, do not drink, have lived carefully and saved some money are then going to be penalised. I think that is wholly unfair. I think that in this amendment we are dealing with the dumb, the blind and the disabled. These are perhaps the most unfortunate people in our society. To answer the question of my noble friend Lady Darcy (de Knayth), I was told the other day that somebody could have the mobility allowance and that this would not be taken into consideration until they had collected it and saved it to go on holiday and then, when they had a bulk sum in the bank, it would be taken into consideration. Therefore, to put emphasis on having regard
380
to their means is just helping the skivers and being most unfair to those people who probably have very little and want to save and live carefully. For that reason I would ask noble Lords to come into the Lobby with me. I should like to divide the Committee.
Lord Boyd-Carpenter: Before we come to that stage, may I, nonetheless, ask my noble friend to help some of us who are very much troubled by this? My noble friend said that guidance would be given to local authorities as to how they were to deal with the question of means. Obviously, in practical terms, a great deal will depend on that. I have no idea what the outcome of a vote now would be; but I wonder whether my noble friend would not think it a practical step to say that he will consider this matter further and so enable an amendment to be taken at Report stage; and that when we come to that he will then be, I hope, in a position to tell the House—it will then be a House and not a Committee—exactly how this would work by giving a quotation from the intended guidance and answering the question which, understandably (and I am not being impertinent in criticising him) he is in no position to answer this afternoon? I think that he can see that there is a great deal of feeling in the Committee, and not merely confined to one quarter. I wonder whether he can ease the position a little by giving us some help in this way?
Lord Trefgarne: I am certainly willing at some future stage of the Bill to expand further upon the various issues that have been referred to this afternoon. If the noble Baroness wants to withdraw her amendment and tackle me again on the subject at another stage, I have no objection at all to that course. However, I do not want the noble Baroness to get the impression that the Government are in any way wavering upon the proposals that are contained in this particular clause. I am convinced and unrepentant that the right approach is to standardise—to use a rather horrible word—the procedures in assessing the charges for these services. At the moment we are in a position where all sorts of different régimes can and do apply—generally I fear to the disadvantage of those who receive these services. I should like a better régime to apply in future. That is what is contained in these provisions. I remain willing to answer a similar amendment at another stage of the Bill, though I would not want the Committee to imagine that the Government are in any way reconsidering their position on this matter.
Lord Wallace of Coslany: The noble Lord mentioned guidance. Who is going to give the guidance to local authorities? Is it the AMA? If that is the case, the noble Lord is as well aware as I am that so far negotiations have foundered. There is no possible chance that the AMA can formulate a set of guidance to local authorities. He knows that as well as I do.
Baroness Masham of Ilton: I think that the noble Lord the Minister has been honest. I feel that the Government will not change their mind so far as means-testing is concerned. I know that the people who worked on the Chronically Sick and Disabled Persons Act 1970 were very worried and are still

381
worried 11 or 12 years later. This is because people who need help from the social services departments have not come forward because they are frightened of being rebuked. The five little words in my amendment are going to make people go even less to the social service department for help. So, I still ask your Lordships to come into the Lobby with me. I should like to divide the Committee.
3.52 p.m.
On Question, Whether the said amendment (No. 91) shall be agreed to?
Their Lordships divided: Contents, 81; Not-Contents, 76.

DIVISION NO. 3

CONTENTS

Airey of Abingdon, B.

McFadzean, L.

Avon, E.

Macleod of Borve, B.

Bellwin, L.

Mancroft, L.

Beloff, L.

Margadale, L.

Boardman, L.

Marley, L.

Campbell of Croy, L.

Massereene and Ferrard, V.

Cathcart, E.

Merrivale, L.

Cockfield, L.

Mersey, V.

Coleraine, L.

Mottistone, L.

Colwyn, L.

Mowbray and Stourton, L.

Cullen of Ashbourne, L.

Napier and Ettrick, L.

Daventry, V.

Newall, L.

Denham, L. [Teller.]

Northchurch, B.

Dilhorne, V.

Nugent of Guildford, L.

Drumalbyn, L.

Orkney, E.

Eccles, V.

Orr-Ewing, L.

Elliot of Harwood, B.

Plummer of St. Marylebone, L.

Elton, L.

Renton, L.

Faithfull, B.

Romney, E.

Fortescue, E.

St. Davids, V.

Fraser of Kilmorack, L.

Saint Oswald, L.

Gibson-Watt, L.

Salisbury, M.

Glenarthur, L.

Skelmersdale, L.

Hailsham of Saint Marylebone, L.

Soames, L.

Strathcona and Mount Royal, L.

Hatherton, L.

Holderness, L.

Strathspey, L.

Hornsby-Smith, B.

Sudeley, L.

Hylton-Foster, B.

Swansea, L.

Killearn, L.

Swinfen, L.

Kinloss, Ly.

Swinton, E. [Teller.]

Kinnaird, L.

Terrington, L.

Kinnoull, E.

Teynham, L.

Lane-Fox, B.

Trefgarne, L.

Lauderdale, E.

Vaux of Harrowden, L.

Long, V.

Vickers, B.

Loudoun, C.

Vivian, L.

Lucas of Chilworth, L.

Wakefield of Kendal, L.

Luke, L.

Wynford, L.

Lyell, L.

Young, B.

NOT-CONTENTS

Ailesbury, M.

Gaitskell, B.

Ardwick, L.

Gregson, L.

Aylestone, L.

Hale, L.

Balogh, L.

Hampton, L.

Banks, L.

Hanworth, V.

Birk, B.

Harris of Greenwich, L.

Bishopston, L.

Hatch of Lusby, L.

Blyton, L.

Houghton of Sowerby, L.

Boston of Faversham, L.

Ingleby, V.

Brockway, L.

Jeger, B.

Bruce of Donington, L.

Jenkins of Putney, L.

Cledwyn of Penrhos, L.

John-Mackie, L.

Collison, L.

Kagan, L.

Cooper of Stockton Heath, L.

Kaldor, L.

Darcy (de Knayth), B.

Kilmarnock, L.

David, B. [Teller.]

Listowel, E.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B.

Davies of Penrhys, L.

Lloyd of Hampstead, L.

Diamond, L.

Lovell-Davis, L.

Elwyn-Jones, L.

MacLeod of Fuinary, L.

Erroll, E.

Masham of Ilton, B.

Ewart-Biggs, B.

Mayhew, L.

410

Melchett, L.

Stedman, B.

Mishcon, L.

Stewart of Alvechurch, B.

Molloy, L.

Stewart of Fulham, L.

Oram, L.

Stone, L.

Paget of Northampton, L.

Taylor of Gryfe, L.

Peart, L.

Underhill, L.

Phillips, B.

Wallace of Coslany, L.

Ponsonby of Shulbrede, L. [Teller.]

Wells-Pestell, L.

White, B.

Robson of Kiddington, B.

Wigoder, L.

Sefton of Garston, L.

Winstanley, L.

Shackleton, L.

Winterbottom, L.

Somers, L.

Wootton of Abinger, B.

On Question, amendment agreed to.

Resolved in the affirmative, and amendment agreed to accordingly.
4.2 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 92:
Page 14, line 25, at end insert—
("Provided that no charge shall be recoverable for any service other than the provision of a meal from a person who is in receipt of supplementary benefit or whose weekly net disposable income is, or would be after payment of the charge, less than the aggregate of the sums for the time being specified in section 6(1)(a) of the Social Security Pensions Act 1975 and column (3) of paragraph 6 of Part IV of Schedule 4 to the Social Security Act 1975 and whose capital resources are less than the sum for the time being specified in Regulation 7 of the Supplementary Benefit (Resources) Regulations 1981.")
The noble Lord said: After the Division we have had, which has given a degree of pleasure in some respects, I should like to move Amendment No. 92 and to take with it Amendments Nos. 94 and 95. They are all on the same theme and although they avoid means-testing they do give exemptions where need applies because of the circumstances of the individual. The noble Lord, Lord Trefgarne, has already referred to inconsistences in charging by local authorities and this, quite frankly, will continue to be the case if this Bill goes through unamended. These three amendments, therefore, are designed to avoid charges being levied on people with very low incomes for services provided under a variety of enactments.
It might be argued that individual local authorities should be left to make their own decisions. That is the theme which the noble Lord, Lord Trefgarne, has emphasised quite frequently during the Committee stage but, as I have pointed out, the patterns vary from local authority to local authority, and in some cases some of them impose charges which disabled people are unable to pay. It really boils down to the fact that whether you get the best relief for these services depends on where you live. That is not good enough. You might be in an area of a local authority—I am not pointing in any political direction—whose outlook was in the main progressive. Then you may come to another local authority whose attitude of mind seems

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to be, "These people must pay", and they are very tight indeed on their services. From one's own experience, one could point out a number of these authorities. I do not intend to do so, but it is a fact, and we all know it.
On Second Reading, the noble Lord, Lord Trefgarne, said at col. 772 on 22nd November that he thought the local authority associations would certainly be issuing guidance to their members. He mentioned that quite recently in the discussion on the previous amendment. The AMA appears to have made little progress, however, and the noble Lord will know that. I understand that there is in fact little chance of such action being taken because of the extreme difficulties in the way of formulating notes of guidance. In any case, whether the AMA can eventually act or not, these amendments provide a fair basis and will safeguard the worse-off section of our community. That is the basis of the amendments—to protect the worse-off, not avoiding any legitimate charge but at least protecting the worse-off sections of our community. Surely that should be our primary objective. I hope the Government will see that this amendment is not critical in the sense of avoiding any charge on a person. It lays down a formula which would help the Government in their objective of getting some real basis of consistency. I beg to move.
Lord Banks: Again, I should like briefly to support the amendment which has just been moved and to express support for all three of the amendments to which the noble Lord spoke. As he explained, they are designed to see that the elderly and the disabled do not have to pay for services except meals, if they are on supplementary benefit, if their net disposable income is less than the retirement pension after the effect of the charge has been taken into account and if their capital resources are less than £2,500. In those circumstances they are not required to pay; and that seems reasonable.
Lord Trefgarne: I hope I can assist your Lordships in this matter by saying that the Government have complete sympathy with the principle of these amendments in so far as they seek to relieve people on low incomes and with small capital resources from local authority charges for services that they need. It has been the consistent policy of the Government that local authorities should not charge those receiving day and domiciliary services who are living at supplementary benefit levels or who would suffer real hardship if required to pay charges. We need to be careful, however, about enshrining that principle in legislation and particularly in the terms proposed. Legislation removes any flexibility in suiting charging arrangements to the overall circumstances of the client.
The amendment already excludes the meals service from the exemption, presumably in recognition of the element in supplementary benefit which provides for food. Supplementary benefit is not a fixed sum: the scale rate varies according to the circumstances of the individual, and additional benefits may be paid for some items which may also be provided as local authority services. There are thus several areas of
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overlap which need to be examined. There is also some doubt whether the particular method of assessing the income level of those to be exempted from charges who are not in receipt of supplementary benefit is the most equitable and appropriate, however administratively convenient it may be or may not be. The advent of housing benefit will take some people out of supplementary benefit and reduce the supplementary benefit of others. Its effects will need careful assessment. The proposed amendment to Schedule 8 to the National Health Service Act (paragraph 2(5)) also brings the provision of residential accommodation for the mentally ill and mentally handicapped, alcoholics and drug addicts within the scope of the exemption from charges and further consequent complications in relation to both supplementary benefit and charging other client groups for residential accommodation.
These are questions on which we need to consult the local authority associations. I said at Second Reading that the local authority associations had originally agreed to issue administrative guidance to member authorities about assessing people's ability to pay. The principle behind these amendments was among the conclusions of the joint working group of central and local government officials which led to these legislative proposals, and it might well have been embodied in advice by the associations. We have now heard from one of the associations that they no longer think it appropriate to issue such advice.
I would, therefore, ask the noble Baroness and the noble Lord whether they would consent to withdraw their amendment at this stage, on the understanding that the Government will look into the matter with the local authority associations, and, if a suitable formula can be devised—and I would not wish to hide from your Lordships some of the difficulties in the way of this—they will introduce an amendment at the Report stage of the Bill.
Lord Wallace of Coslany: The noble Lord has been quite generous—I nearly said "for a change", but that would not be fair—in indicating that there is some sympathy with the amendment. As he has undertaken to see whether there is a case for formulating something, I shall willingly withdraw the amendment. Let us look forward to the Report stage, or, if that is not to be. possibly to the Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lyell Lord Lyell moved Amendment No. 93:
Page 14, line 26, leave out subsection (2) and insert—
("(2) The following subsection shall be substituted for subsection (2) of section 45 of the Health Services and Public Health Act 1968 (promotion by local authorities of welfare of old people)—
"(2) Where a person avails himself of any service provided in pursuance of arrangements made under this section, the local authority providing the service may recover from him such charges (if any) for it as they consider reasonable, having regard to his means.".
(2A) The following subsection shall be substituted for subsection (2) of section 8 of the Residential Homes Act 1980 (provision of meals and recreation for old people)—
"(2) Where a person avails himself of any service provided in pursuance of arrangements made under subsection (1) above, the district council providing the service may recover from him such charges (if any) for it as they consider reasonable, having regard to his means.".).
The noble Lord said: This amendment is consequential upon the earlier amendments, Nos. 87, 88 and 89, to which I spoke. I am afraid I inadvertently omitted to mention that this amendment is part of that series. I beg to move.
Lord Somers: In view of the fact that Amendment No. 91 was agreed to, and two subsections of this amendment end with the words "having regard to his means", would the Government consider deleting those words? Without them, we would simply have "as they consider reasonable", which seems to me entirely satisfactory.
Baroness Jeger: While the Minister is looking for the answer, may I say that, as it was the will of the Committee earlier that the words "having regard to his means" should be expunged, it is surely for the Government to take them out of their position here in the Bill.
Lord Trefgarne: I think the noble Baroness is quite right. Although I could no doubt insist upon this amendment (or, at least, seek to) I shall not do so, and I seek leave to withdraw the amendment now. If I am right in my brief that it ought to be in the Bill, I will bring it forward at the next stage. But, on behalf of my noble friend, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 94 and 95 not moved.]
Clause 12, as amended, agreed to.
Clause 13 [Contributions in respect of children in care]:
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 96:
Page 15, leave out lines 14 to 23 and insert—
("46.—(1) Subject to the provisions of this section and section 47 of this Act, a local authority in whose care a child is may serve upon a person liable to contribute in respect of that child under section 45 of this Act (a "contributor") a notice in writing (a "contribution notice") specifying the amount of such contribution determined in accordance with the following subsections of this section.").
The noble Lord said: The purpose of this amendment is to ensure that the existing provision requiring the service of a notice is retained, and that it does not become a contractual or other legal obligation until after an agreement is reached, or a court order is made. The advantage of this arrangement is that there will be a clear procedure at three separate stages: first, the local authority informs the parent that he, or she, may be liable to contribute; secondly, the local authority and the parent have time to agree the charge or to get a decision from the court; thirdly, the arrangement is likely to enhance the chances of co-operation between local authority and family and, in turn, of regular payments from the parent. I beg to move.
Lord Trefgarne: We are, I think, discussing Amendments Nos. 96 to 103, which all address themselves to the same point. Local authorities have sought for some time the power to levy flat rate contributions in respect of children in care, rather than
386
having to make a detailed assessment in every case. This was one of the recommendations of the joint local authority and departmental working group on charging policies. By means of this Bill, we are to give local authorities power to levy flat rate contributions for children in care. However, they will still have the power to make a detailed assessment in individual cases, if they so wish, subject to an upper ceiling. Local authorities will be given power not to levy a charge at all, if they consider contributions to be inappropriate in any particular case. The provisions of the Bill will have the effect of simplifying the administrative arrangements and reducing administrative costs.
The amendments proposed will, I fear, have the reverse effect and will also involve the detailed means-testing of contributors. The effect of the amendments is to impose complicated and restrictive rules on local authorities for the purpose of assessing the amount of contribution payable in respect of children in care. This was one of the recommendations of the joint local authority and departmental working group, to which I referred just now.
I consider that, as local authorities have been given statutory responsibility for the children in their care, it makes sense that they should be given discretionary powers on whether, and how much, to charge for the services they provide. Therefore, I do not, I am afraid, support the proposed amendments, including the amendment by which the Secretary of State would be given power to make regulations governing liability for, and assessment of, contributions for children in care. This is in keeping with our desire to keep to a minimum the number of central Government controls over the activities and delegated powers of local authorities.
A further effect of the amendments is to introduce a reduced and, if I may say so, inappropriate upper limit to the amount of contribution payable. Complete exemption from liability is introduced for several categories of persons, which again, I think, is inappropriate. Many young people in care, including those receiving social security benefits, have incomes sufficient to allow them to make some contribution towards their keep, however small. Under the arrangements proposed, a large number of these young people would be exempted from the requirement to make any contribution at all. I believe that this would not help them to develop a sense of responsibility in financial matters, which is so important. The net effect of these changes would be to reduce considerably the income which local authorities receive in the form of contributions in respect of children in their care.
I can tell your Lordships that the local authority associations will be setting up a working group to consider the drawing up of a sliding scale governing the charging of young people in care. In addition, they are going to consider drawing up a list of factors which may be taken into account in assessing the ability of parents to contribute towards the maintenance of children in care. For these reasons, I hope that the noble Lord will not press his amendment.
Lord Wallace of Coslany: The noble Lord has gone to town in a big way, because he has discussed all the subsequent amendments which I have yet to move. I

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am dealing only with the provision of the notice, but the noble Lord has gone hareing away and has replied to several amendments on which I may speak at some length. If there is difficulty over the question of the notice, I shall not press that point. I shall examine the mass of information which the noble Lord has given on all sorts of subjects related to the various amendments, and will come forward at Report stage on Amendment No, 96. Therefore, I shall withdraw that amendment, although I do not understand what the noble Lord is getting at.
Lord Trefgarne: I apologise to the noble Lord. I said at the outset of my remarks that I thought he wanted to discuss Amendments Nos. 96 to 103 together, and that is why I made the speech that I did.
Lord Wallace of Coslany: That may have been healthy anticipation, but I had no such idea. It has put me in a spot.
Lord Trefgarne: The noble Lord did not say "No".
Lord Wallace of Coslany: I was so astounded.
Lord Trefgarne: Again, I apologise. I thought the noble Lord nodded in assent when I said that at the beginning of my remarks. If I mistook the noble Lord in any way, I apologise.
Lord Wallace of Coslany: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.19 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 97.
Page 15, leave out lines 24 to 37 and insert—
("(2) The amount specified in a contribution notice shall not be greater than the weekly amount which is payable in respect of a dependant child to a person in receipt of the widowed mothers' allowance under subsection (4) of section 41 of and column 2 in Part IV of Schedule 4 to the Social Security Act 1975.").
The noble Lord said: This is an important amendment, in spite of what the noble Lord said. Its purpose is to set a realistic maximum limit on the weekly amount that a local authority can charge parents of children in care. The suggested maximum is the amount paid for a child to a person in receipt of a long-term national insurance benefit, such as the widowed mother's allowance. The current amount is, I understand, £7·95.
Under the present system, the charges which local authorities levy are often unreasonably high. Authorities are allowed to charge up to the weekly amount that they themselves normally pay to foster parents. In 1981, such fees could be anything from £17 per week for a very young child to £35 for a young teenager. A survey of local authority practice revealed that many authorities make an immediate charge of the allowed maximum, leaving it to parents to write back if they consider the charge to be too high.
Many of the demand letters from local authorities are in standard form and are full of complicated legal phrases. They can be so easily intimidating to vulner-
388
able parents who are already suffering from the strain and stress of surrendering or losing their child to public care. If the parent does not reply and the authority does not review its scheme regularly, it could continue to operate the maximum charge throughout the child's stay in care. When parents submit details of their income and are then assessed by the local authority, they can still be liable for hefty contributions which drag them down to near or below subsistence level.
The amendment provides for equity between families. It seems to make sense that the amount paid to a parent who needs to claim benefit to maintain his or her child at home should be used as a guideline for the amount that a parent should contribute to the maintenance of a child away from home. I beg to move.
Lord Banks: I support this amendment. As the noble Lord said in his closing remarks, it seems right and wholly reasonable that the limit to be put on the contribution which is made to help to maintain a child in care should be similar to the limit which is placed on the amount of benefit given to somebody who wants to maintain his child at home. I do not believe that this proposal is subject to the criticisms of the other amendments which the noble Lord the Minister put forward in his reply to the previous amendment.
Lord Trefgarne: Although I am always reluctant to resist an amendment simply on the basis of some alleged technical defect, I am told that there is one in respect of this amendment of which your Lordships will wish to be apprised. It fails to make reference to any one paragraph of column 2 in Part IV of Schedule 4 to the Social Security Act 1975, and therefore to any one benefit, and is thus ambiguous. Be that as it may, I deployed the difficulties about this amendment in my earlier remarks. I am reluctant to bore your Lordships with a further extract from what I have already said, but the Government see difficulties with this amendment, along the lines which I described earlier. I hope, therefore, that the noble Lord will not press it.
Lord Wallace of Coslany: Apparently a technical hitch is involved. On that basis I shall reconsider the amendment, and in the meantime I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 98:
Page 15, line 37, at end insert—
("(2A) A contributor shall not be liable under section 45 of this Act to pay any contribution in respect of a child in care for as long as the contributor is—

(a) in receipt of or entitled to apply for supplementary benefit under the Supplementary Benefits Act 1976. or

(b) in receipt of or entitled to apply for housing benefits under Part II of the Social Security and Housing Benefits Act 1982. or

(c) in receipt of or entitled to apply for family income supplement under the Family Income Supplements Act 1970. or would be so entitled if the child or children in care were living in the same household as the contributor.")

The noble Lord said: I beg to move this amendment, which stands in my name and that of my noble friend Lady Jeger. The purpose of the amendment—this

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comes right up against what the noble Lord said in his mass contribution on this group of amendments—is to exempt from parental contributions all families who receive or are entitled to supplementary benefit, family income supplement or housing benefit. The proposals in the Bill give local authorities discretion to waive a charge in any particular case but do not provide for the statutory exemption of any family or group of families. The proposed amendment would lift an impossible burden from whole groups of poor parents and greatly reduce the time, money and energy currently spent by local authority staff upon assessing and collecting contributions.
I shall not proceed any further because what I have just said should appeal to the Government. I claim that the amendment would greatly reduce the time, money and energy currently spent by local authority staff upon assessing and collecting contributions. I beg to move.
Lord Trefgarne: I am afraid that there is another small technical defect in this amendment. If the noble Lord turns his eye to paragraph (b) he will see the words, "in receipt of or entitled to apply for housing benefits". I am told that the whole world is entitled to apply for housing benefits. What is relevant is whether or not one is entitled to receive them. That is a difficulty which the noble Lord will no doubt wish to put right at some later stage, if he sees fit to proceed with the matter. I do not wish to deploy all the arguments which I deployed just now but, as I have already said, this amendment contains a technical defect.
Lord Wallace of Coslany: In view of the technicalities involved and the resulting defects, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 99:
Page 15, line 37, at end insert—
("(2B) In determining the amount to be specified in the contribution notice the local authority shall calculate the assessable income of the contributor by deducting from his gross earnings or other income the following amounts—

(a) income tax;

(b) any contribution under Part I of the Social Security Act 1975 paid by the contributor or by his employer on his behalf the amount of which is deducted by the employer from the contributor's earnings;

(c) contributions to an occupational pension scheme;

(d) expenses reasonably incurred by the contributor without reimbursement in respect of travel to and from his place of work, reasonable provision for the care of another member of the household during the contributor's absence from home in respect of work and any other expenses reasonably incurred by the contributor for the purposes of his employment;

(e) expenses reasonably incurred by the contributor and his family in maintaining contact with the child or children in care, including the cost of travel and subsistence, of reasonable gifts and of items of clothing;

(f) any child benefit payable under the Child Benefit Act 1975.").

The noble Lord said: I beg to move this amendment, which stands in my name and that of my noble friend Lady Jeger. The purpose of the amendment is to provide local authorities with a clear statutory formula
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for calculating a parent's disposable income. At present, as we all know, authorities use whatever formula they choose, and nine out of 10 authorities use the ordinary supplementary benefit rates to measure how much a family can afford to pay. Then they subtract from the family's net income the supplementary benefit entitlement. After that, practice varies widely. Some, though not all, authorities make an allowance for travel to work and other expenses, such as hire purchase commitments. What almost all authorities fail to do is to ensure that the family is left with enough money to keep up contact with their child in care.
No authority we know of makes an allowance for the cost of visiting a child. Such visits sometimes entail a long journey, a meal out and possibly an overnight stay. Money is also needed for telephone calls and for buying and sending letters, cards, birthday presents and items of clothing. It is good for families to keep in touch and maintain contact; it is often crucial in attempting to reunite a family. But the expense incurred by parents can be heavy. If there is a technical fault this time I shall look into it, but I feel that this is a matter which could usefully be looked at by the Government. I do not intend to press the amendment at this stage, unless the Government give a most unsatisfactory reply. I beg to move.
Lord Trefgarne: I must confess that my scrutiny thus far has not revealed any obvious technical defect in the noble Lord's amendment. None the less, I would ask the noble Lord whether he really thinks it right to impose a detailed panoply of regulation and restriction upon the arrangements we propose. We much prefer a more flexible approach to these matters. Experience has shown in some other areas of benefit that a whole raft of tiny, minute regulations, whether in statute, statutory instrument, or whatever, tend to cost a great deal to administer, throw up as many anomalies as they solve and in the end do not provide a greater level of benefit to those whom they are supposed to help. At the same time they bring into being a great department of officials and staff of every kind to operate the system. I hope that the noble Lord will therefore accept the general objection to the proposals contained in this and the immediately following amendments, and, although I am happy to deploy further detailed arguments if the noble Lord wishes, he might prefer that I did not do that.
Lord Wallace of Coslany: That is a matter for consideration. I want the Government to think about this because a child in care should be treated on the same basis as a child in hospital. The parents of a child in hospital are not subjected to the particular points about which I have complained. All I ask is that the matter should be considered. Separation can be agonising even though there may be good reasons for it and the question of reuniting the child with the parent is vitally important. It is possible that visits can help in that way. I am not a social worker and I do not have the great experience of the noble Baroness, Lady Faithful], but there is something in this amendment and I hope that the Government will look into it.
Lord Trefgarne: I do not want to be unreasonable in these matters. I will certainly between now and the

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next stage look at the point which the noble Lord has made. I would not want to raise any undue expectations in the mind of the noble Lord, Lord Wallace of Coslany, because there are the difficulties which I have described. However, if the noble Lord will withdraw his amendment now, I shall not object if he wants to ask me about it again at the next stage.
Lord Banks: Before the noble Lord, Lord Wallace of Coslany. reacts to what the noble Lord the Minister has just said, may I just underline one point in relation to this amendment, which calls for a disregard of child benefit? This highlights the difference between the treatment of a child in hospital and the treatment of a child in care. With the child in hospital, child benefit continues for 20 weeks and may continue longer than that if the parents are maintaining contact with the child in hospital; whereas, with the child in care, benefit lasts for only eight weeks and then stops. Very often the benefit paid during those eight weeks is required by the local authority by means of a payment. There seems to be a considerable difference in this respect between the position of children who are not in very different situations. I wonder whether the Minister could say something about this point at this stage or at some other stage.
Lord Trefgarne: Perhaps I may take that point into consideration between now and the next stage, as I undertook to do when replying to the noble Lord, Lord Wallace of Coslany.
Lord Wallace of Coslany: I am very grateful to the noble Lord, Lord Banks, for stressing a point which I could have enlarged upon—but I found myself getting into the position which the noble Baroness, Lady Faithfull, described at a previous Committee sitting when she said she felt that she was bashing her head against a brick wall. Therefore, I did not continue to speak too long on this particular point. A promise has been given to look into this matter and therefore I withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 100:
Page 15, line 37, at end insert—
("(2C) Where the assessable income of the contributor, calculated in accordance with subsection (2B) above—

(a) is less than an amount which is 140 per cent. of the sum specified in section 6(1)(a) of the Social Security Pensions Act 1975. no contribution shall be required of the contributor;

(b) exceeds the amount specified in paragraph (a) above, the amount of the contribution payable by the contributor shall not exceed 50p for every £1 of that excess, but the total amount of the contribution shall not exceed the amount specified in subsection (2) of this section.").

The noble Lord said: The purpose of this amendment is to provide local authorities with a set formula for calculating the amount of disposable income that can be levied for contributions. At present, once local authorities have calculated the parents' disposable income they then recover contributions from the parents at varying rates. These can rise to as high as 75p in every £1. Three local authorities out of 75 surveyed used scales which finally took a near-confiscatory 100 per cent. of assessable
392
income. It is considered that it should not follow as a matter of principle that families with children in care should be reduced to subsistence level. They should be left with enough money to provide properly for their other children and home responsibilities.
The proposals are twofold. First, they would require local authorities to exempt from contributions any parent whose disposable income was less than 140 per cent. of the long-term supplementary benefit rate. Secondly, the amendment would ensure that any excess over 140 per cent. could not be levied at a rate higher than 15p in the £1. That is the substance of the amendment. Here again, I am in some difficulty because the noble Lord the Minister has raced on and covered the whole scene. Nevertheless, I wonder what his reaction is to this amendment: I hope that he will not say this time that it has a technical defect. I beg to move.
Lord Trefgarne: I have no doubt that if I examine the amendment long enough a technical defect will occur to me. In the meantime, I should prefer to rest upon the difficulty I described during my earlier remarks about the inappropriateness of an upper ceiling to the amount of contributions which are payable. Complete exemption from liability is introduced for several categories of persons, which I believe is one of the provisions of a later amendment. As I said earlier, there is a great deal of complexity inherent in the raft of amendments which the noble Lord is now proposing. In general, I believe that these are undesirable, and that is the principal difficulty with the amendment which the noble Lord is now proposing.
Lord Wallace of Coslany: I will not prolong this argument. This is an important point and one that we should take into account; it is in line with what the Government want. I beg leave to withdraw the amendment at this stage.
Amendment, by leave, withdrawn.
4.36 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 101:
Page 15, line 37, at end insert—
("( ) Subject to the provisions of this Section, the Secretary of State shall make regulations further limiting which persons shall be liable to make contributions with respect to children in care, and as to the contributions which may be required of them.")
The noble Lord said: The purpose of this amendment is to require the Secretary of State to limit by regulations the discretion of local authorities to charge young people in care aged over 16 for their keep. It would also allow for regulations on parent contributions. A survey of social services departments' policies carried out for the Children's Legal Centre since the Bill was presented reveals wide and illogical variations in charging policy. This is unjust, and I have made frequent reference to this point when speaking to previous amendments.
For example, the personal allowance for pocket money and clothing with which young people in care are left after contributions have been deducted from their pay at the age of 16 varies from £7.70 in Birmingham to £16 in Hounslow. Authorities also

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make allowances for fares to and from work, lunch, and other essential expenses connected with employment, The maximum that young working people aged 16 to 18 are required to pay towards their board and lodgings varies widely. Most authorities have a scale linking contributions to earnings. The maximum contribution required varies from £44 a week in Birmingham to £16.85 in Wakefield. It appears that a number of local authorities are still illegally requiring young people not in remunerative full-time work—that is, those in receipt of supplementary benefit or a training allowance—to contribute. In some cases, local authorities have refused to repay contributions which have been obtained illegally.
On the other hand, since the legal position was clarified earlier this year, some local authorities have ceased to require contributions from young people not in remunerative full-time work and have made arrangements to repay such contributions received. A logical policy would be one which ensures that young people will be left with, as a minimum, the present non-householder rate of supplementary benefit—that is, £15.80. This will place young people in care receiving supplementary benefit on the same basis as those living at home. The Government's policy is to treat 16-and 17-year-olds living at home as being wholly dependant on their parents, even if they have a small income.
During a debate on housing benefits and regulations in another place. Mr. Hugh Rossi said:
"It seems to me that 16-and 17-year-olds should be treated as dependent upon their families and not as non-dependants, whether or not they have a small income of their own."
It is important to emphasise that under the new housing benefit scheme non-householders aged under 18 will no longer receive the automatic housing addition to their supplementary benefit. If care authorities provide for young people aged 16 to 18 in such a way that they are classified as householders or joint householders for benefit purposes—for example, through independent living schemes in bed-sits—then the young people involved will be able to claim housing benefit, as can young people not in care but living independently of their parents, and they could be charged a reasonable rent et cetera if the authority was providing the accommodation.
These points underline the fact that this is a complex area, in which it is not enough simply to give local authorities maximum discretion. In order to treat young people in care equitably in relation to other young people, regulations should be issued following a proper and full consideration of current practice. May I conclude by saying that this is a most important and complex matter and is one that deserves very careful consideration indeed. Perhaps the Government will give an indication that they are prepared to consider it. I beg to move.
Lord Trefgarne: I do not wish to be unreasonable to the noble Lord, but at the same time I do not want to raise any unjustified expectations in his mind. However, if he does want to withdraw the amendment now and return to this matter at a later stage, I shall certainly be very happy for him to do that and to give the matter further consideration myself between now and then. But, as I say, I shall certainly come to this
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matter with the basic belief that we want to keep these things as simple and as easily understandable as possible. It may be that there is some improvement that can be made within those criteria. If the noble Lord would like to withdraw the amendment we can think about it between now and Report stage.
Lord Wallace of Coslany: That seems to be quite a good idea, because it suddenly dawned on me that the Report stage will be next year, after the Christmas recess; but please do not make it too quick because we want to consider this very carefully. The noble Lord has made a fair offer and I accept what he has said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No.102:
Page 16, leave out lines 4 to 12 and insert—
(" "(a) where a local authority in whose care a child is has served and not withdrawn a contribution notice specifying a contribution calculated in accordance with section 46 of this Act. the local authority shall seek to reach an agreement with the contributor on the amount of the contribution;
(b) where, after a period of one month beginning on the day on which the contribution notice was given to the contributor, the local authority and the contributor have failed to agree on the amount of the contribution, or where an agreement was reached but the contributor has defaulted in making two or more of his contributions," ").
The noble Lord said: I beg to move Amendment No. 102 standing in the names of my noble friend and myself. This amendment is quite important because its purpose is to retain the period of one month in which parents and the local authority can try to reach agreement on charges. The Bill seeks to abolish this period of one month. The change in legislation proposed is designed to allow the local authority to assess the charge far more quickly and to recover arrears with less delay. It would certainly simplify the procedure for the local authority, but such a simplification, I suggest, would be at the expense of the user rather than being of benefit to him. Parents who did not understand the demands they received or had delayed making payments, or simply could not afford to pay, could find themselves back in court within weeks of their child being committed to care.
It is thought that local authorities should be encouraged to enter into partnership with parents, and as far as possible to share the caring. This spirit is far more likely to be fostered by a co-operative attitude towards establishing parental contributions than the punitive and distant approach this change seems likely to encourage. It may also lead to less and lower arrears. I think this a quite reasonable amendment. I hesitate to wonder whether there will be a technical hitch to it. I beg to move.
Lord Trefgarne: May I make the same proposal in respect of this amendment as I did in regard to the last one, and also, if it would help the noble Lord, in respect of the next one? Thus we can dispose of this group of amendments, to which I spoke in detail earlier.
Lord Wallace of Coslany: When the noble Lord says "the next one", does he mean No. 104?
Lord Trefgarne: No, No. 103.
Lord Wallace of Coslany: Yes, I beg the noble Lord's pardon. In view of what he has said, I beg leave to withdraw Amendment No. 102.
Amendment, by leave, withdrawn.
[Amendment No. 103 not moved.)
Clause 13 agreed to.
Clause 14 [Power of local authority to limit charge for residential accommodation to minimum rate:]
4.46 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 104:
Page 16, line 21, at end insert—
("( ) the following subsection shall be inserted after subsection (4) of section 22 (charges to be made for accommodation)—"(4A) Notwithstanding any other provisions of this section, where an authority is providing accommodation for a person who derives income from gainful employment, the authority shall disregard such proportion of his net earnings as is represented by the formula
5A/2+40/100(B-5A/2)
where A is the sum specified in subsection (4) above and B is his net earnings.";").
The noble Lord said: This amendment looks terribly complicated and confusing, but it is in fact an attempt to write into legislation a practice which local authorities already recommend for other client groups. I know that on the surface it is complex and very involved. The noble Baroness, Lady Masham, even went so far as to suggest—not in this Chamber but outside, some few days ago—that I should bring a blackboard and chalk into the Chamber for the benefit of your Lordships, but I have not done that.
There is a problem regarding the severely handicapped, many of them resident in homes, such as the Cheshire Homes, who, in spite of their handicap, achieve great distinction in various fields. I quote as an example, artists, one of them well known to me. These people can by their work earn quite a reasonable income, say £5,000 a year, or a little more. These earnings do not necessarily meet the full cost of their care, and in the case of a charity home the charity may need to subsidise the case. Today, with advanced technology, visions of a new world are dawning for the handicapped, and there is a likelihood of more very seriously handicapped young people who need residential care, through modern scientific advances having a potential capacity to earn substantial salaries. It is a fact that modern technology, coming forward as it has in the last few years, can offer this great advance for the handicapped. I would say, and I do not think anyone would disagree, that it is in the interests of us all to encourage them as much as we can. This amendment could help considerably. This is the incentive motive of which the Government preach so much.
As I say, I agree that the amendment appears complicated, but it is something that is carried out in practice. Its purpose is clear: to ensure a reasonable proportion of net earnings. I would say to the Minister that this is a very important issue regarding the severely disabled. It is purely a question of allowing
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them, if they have the incentive and ability developed through modern technology, to make a reasonably good living. We should be very concerned that we do not penalise them too much so far as the charge for their care is concerned.
I know that, on the surface, this looks a complicated formula. I say to the Minister quite sincerely that if he can provide a better, maybe simpler, but adequate answer, that would be very welcome indeed. I am, pointing out to the Committee this issue of people, such as mouth artists and others, who can earn quite a fair salary, and thank heavens! they are now in a position to do this. This is happening today. I beg to move.
Baroness Hornsby-Smith: There is another side to this issue. As the noble Lord, Lord Wallace of Coslany, knows, I have been associated with several charities in my time. Many of them quite specifically raise funds in order to help people in the charities' homes. Many of these people pay the economic rent where they are capable of paying it. If they are not capable of paying it they have a subsidised rate, and the subsidy is made up by the charity money which is nationally raised. I see a danger. If we are to say that there is a level at which a person is to be subsidised, regardless of what he earns, any astute board of a charity will say: "You apply for the subsidy and we will charge you the full economic rate and not give you the rate we would have done in accord and in concert with the income you now have." It would cut across quite a number of charities who specifically raise money to subsidise people who cannot pay the economic rate. If they know that it will be made up by the Government, and if we put the level at such a height that it is worth charging them the full economic rate, then quite a lot of contributions to the charity will not be applied for the purpose for which they were raised.
Lord Trefgarne: Although the Government accept the intention of the proposed amendment, we do not think that it is appropriate for this Bill. A measure to achieve an incentive is, however, already included in that part of the package of changes agreed between DHSS Ministers and the local authority associations which will be effected in regulations to be made next year. There are also technical difficulties in the amendment which I could go into if the noble Lord wishes me to. However, I hope that with this declar-tion of the Government's intent the noble Lord will seek leave to withdraw the amendment.
Lord Wallace of Coslany: That is fair enough. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 105:
Page 16, line 41, at end insent—
("( ) in Part III of Schedule 1 to the Supplementary Benefits Act 1976 for any reference to "£1,200" shall be substituted a reference to "£2,500".").
The noble Lord said: This amendment is quite simple. One of these days when I rise at the Box and say that an amendment is quite straightforward and

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simple, the Government will give me the shock of my life by accepting it. So far I have been unlucky.
This is a simple amendment. The change in the capital limit can, I accept, be done by regulations, but despite regular promptings from the AMA the DHSS has declined to change the figure of £1,200. The figure has remained the same since before 1976. The regular promptings have been made by the AMA, and the Government now have a glorious opportunity to meet them and to increase the figure, as suggested in the amendment.
Lord Trefgarne: The capital disregard of £1,200 is only one of the many factors taken into account in assessing a resident's ability to pay for Part III accommodation in accordance with Part III of Schedule I to the Supplementary Benefits Act 1976. Those provisions also governed the supplementary benefit system itself until November 1980; but then new regulations introduced a separate capital rule for supplementary benefit. The two rules are now of quite a different character. For supplementary benefit, the rule is a complete capital cut-off: with more than £2,500 of capital, no benefit at all is payable. For residential charging purposes. £1,200 is the starting point for assessment, with a tapering arrangement—based on assuming 25p a week of income for each £50 of capital above that level—so that the assessed ability to pay rises gradually and does not reach full payment unless a very much higher level of capital is held. Although historically it was the case that the same rules were applied for both purposes, there is, in fact, no very good reason why they should have been because the two purposes are entirely different. The supplementary benefit system is designed to provide a "safety net" of financial support for people looking after themselves. The residential care charging system, by contrast, is designed to reflect people's ability to contribute to care which is being provided for them.
When the Joint Working Group on Personal Social Services Charging Policies recommended that the capital disregard be reviewed, they also suggested that the tariff should be revalued. Both factors will be taken into account in the new regulations about Part III charging to be made next year, to which I have already referred. There are also technical difficulties which, again, I can describe to the noble Lord, but perhaps I can spare him them at this moment.
Lord Wallace of Coslany: In view of what the noble Lord said, and as there is again a technical hitch—I seem to be blessed by these—at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 agreed to.
Clause 15 [Recovery of sums due to local authority where persons in residential accommodation have disposed of assets]:
4.56 p.m.
Lord Trefgarne Lord Trefgarne moved Amendment No. 106.
Page 17, line 5, after ("asset") insert ("to which this section applies").
The noble Lord said: It may be of assistance to your Lordships to discuss at the same time Amendments Nos. 107, 111, 112 and 115.I hope that I see the noble Lord, Lord Wallace of Coslany, nodding in agreement. In any event, I see him nodding.
As part of the existing procedures for assessing a resident's ability to pay for Part III accommodation, local authorities already have powers to take into account the value of any assets of which the resident can be shown to have deliberately deprived himself with the intention of paying less than he would otherwise have been assessed to pay. But once the resident has disposed of his assets he will be unable to pay in full a charge assessed on the assumption that he still has them. In those circumstances, there is little point in taking legal proceedings against him and, in any event, local authorities who have accepted responsibility for providing care and attention for the resident are very reluctant to go to such lengths.
But authorities should have some way of recovering debts which may accrue as a consequence of a resident's failing to pay in full the assessed charge. The intention of this clause is to provide that facility and to assist an authority to recover debts arising from deliberate abandonment of assets. The clause therefore provides that the person or persons receiving the asset should be liable up to its value for any-consequential debt which the resident may incur with the authority. But it will be for the authority to decide when making the assessment of ability to pay under the charging regulations whether or not the circumstances are such that an asset which has been transferred should be taken into account as a deliberately abandoned resource. In reaching the agreement between DHSS Ministers and local authority associations, it was expressly intended that any provisions to assist recovery of debts would be used selectively and non-oppressively.
I should now like to turn to the specific amendments which the Government wish to incorporate in order more clearly to achieve the stated intentions. Amendment No. 106 is a paving amendment for the introduction of the new subsection contained in Amendment No. 111. The purpose of the new subsection is to ensure that the recovery provisions in Clause 15 apply only to those assets which are taken into account in the assessment of a resident's ability to pay for Part III accommodation. This strengthens the intention that the clause should provide a recourse for authorities only in those cases where there has been deliberate abandonment of assets by the resident with the intention to reduce the charge payable for his accommodation. Amendments Nos. 107, 112 and 115 are consequential on the other amendments. I beg to move.
Baroness Masham of Ilton: Where it states "any other assets", does this mean any little love trinket given away to a grandchild, a piece of furniture, or anything of that nature? In that case the clause is totally unworkable.
Lord Trefgarne: No, I do not think it means that. I do not have the reference in front of me, but it means the assets that are specifically assessable in

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determining charges payable for Part III accommodation.
Lord Kilmarnock: May I ask the exact scope of the phrase "deliberate abandonment"? That seems to be very wide open. I am merely asking for information. Is there any normally held view of what that means?
Lord Trefgarne: The most obvious example I can give to the noble Lord—this may also help the noble Baroness—is where an elderly person disposes of his house, for example to a relative or a friend, so that that is not taken into account, or so he imagines, in assessing his ability to pay the charges for the accommodation. That is the type of situation that we are seeking to control: the deliberate abandonment of an asset—disposal, in other words—for the purposes of avoiding paying these charges or of avoiding paying them at the highest level. Of course, in the imaginary circumstances that I have suggested, the house would be sold for nothing or next to nothing. That is the type of situation that we are proposing to control under this provision.
Baroness Jeger: I should like to ask another question because this seems to be giving a new meaning to the phrase "asset stripping" which is not usually associated with this type of care. An old person might well have some ancient furniture or possession which, because of the state of the antique market, turn out to be quite valuable. Supposing that old person bequeaths them to a relative or wishes, in his will, to bequeath those family goods to relatives, is the Minister saying that the relatives must be penalised or that the old person had no right to give away things which he specially wanted to keep in the family and which he would not want to sell for all kinds of reasons? If that is to be included under this clause then I think that it is unworkable and totally unjust.
Baroness Phillips: I should like to support my noble friends. Sitting here and listening to the debate, it all seems incredibly and horribly cold blooded. There are pressures already on people who do not understand what it is all about, and we should not add to them again. I could not understand the Minister's explanation about a house. A house is surely only an asset when it is sold; it could not be an asset if the old person were not actually living in it. That seemed to be a rather curious example to put forward. It is very important that there should be no pressure put on people when they are already in a very difficult position. In my view, this is giving the powers far too wide a definition. Some people will apply them in a generous way, others will not do so. This is a very disturbing part of the Bill.
5.3 p.m.
Lord Trefgarne: If your Lordships will look at Amendment No. 111, which is part of this group, your Lordships will see that further details of this matter are provided, in that direct reference is made to the provisions of the National Assistance Act 1948. But what we are here proposing is some kind of control over a circumstance where an elderly person deliber-
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ately divests himself of assets in order to avoid paying charges and passes them, for example, to a near relative simply to avoid paying the charges or receiving the full impact of the charges. I do not think that that is an unreasonable proposal, and I hope that your Lordships will agree with me about that.
As I have said, the local authority will have to be satisfied that the assets have been disposed of deliberately to avoid paying the charges. It has nothing to do with bequests by will, for example, to which some noble Lords made reference. The object is to see fairness between those who accept their responsibilities to meet their charges and pay their debts, and those who deliberately seek to avoid meeting these obligations. Any person who is properly assessed will, of course, have nothing to fear.
Baroness Darcy (de Knayth): Before we go any further with these amendments. I should like to ask the Minister two questions, because I was all for supporting the leaving out of Clause 15. I am delighted to hear that we are talking only about the deliberate abandonment of assets because I was going to ask the Minister how he felt about this matter. First, in the case of proving deliberate abandonment of assets, would the onus be on the local authority to prove the deliberate abandonment of assets? Secondly, I think that the Minister said that one of these amendments limited the matter to the deliberate abandonment of assets, but from reading the amendments I cannot see which it is. I do not know whether I misunderstood the noble Lord. If I did not misunderstand him, would it not be much better to put something into the Bill saying that it is limited to the case where a person knowingly and with the express intention of avoiding payment, disposes of these assets? It is very unclear and I do not know whether I have misunderstood the position.
Lord Trefgarne: That is the effect of the group of amendments which I have moved.
Baroness Darcy (de Knayth): But nowhere does it actually say that, does it?
Lord Trefgarne: I cannot immediately put my finger on the words, but I will in a moment if the noble Baroness will bear with me. I want to persist with the view that what we are really proposing here is a means of restraining people who are deliberately divesting themselves of their assets in order to avoid paying the charges and are doing so in a way which, in other circumstances, might be regarded as fraudulent. That is what we are seeking to control and I hope that your Lordships will agree that it is the right thing to do.
Baroness Masham of Ilton: I should like to ask the noble Lord, who is a highly intelligent person, how on earth do you prove it? If I had to go into residential care and I gave my grandchild—if I had one—a ring, how do you prove whether, I gave it deliberately or not?
Lord Lyell: Perhaps I can try to help the noble Baroness. If the ring is of value (and the noble Baroness does not need me to discuss whether or not it is of value) and if it is worth thousands of pounds or if, in

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the case which the noble Baroness, Lady Jeger, presented, some asset turns out to be of unknown value, then if the local authority decide that the action of the elderly person seems to them to be deliberate, they may take action. However, I ask the noble Baroness, Lady Masham, to ponder on whether she is beginning to make a large hill out of a tiny ring. The noble Baroness shakes her head, but when she says "value", is she thinking of thousands of pounds, hundreds of pounds or a few pounds? I am sure that the noble Baroness and, indeed, your Lordships would understand that when we are talking of assets here we are not thinking of enormous sums. Moreover, the second hoop through which the local authority have to jump, if I can use that phrase, in seeking to recover any charges from the elderly person, is that these assets have been knowingly and deliberately given away or otherwise disposed of. So there are two hoops: first, that there is considerable value; and secondly, that the assets have been deliberately disposed of.
Lord Kilmarnock: Will the noble Lord answer just one point? I take the point he made about the ring, but let us take the case of an elderly person moving into care who has, for example, a daughter or a niece who is just setting up house. If that elderly person gives to that daughter or niece some furniture to the value of, let us say, a few hundred pounds, is that considered to be the deliberate disposal of assets?
Lord Trefgarne: That seems to me not to fall within the ambit of these provisions because the purpose of that disposal was not deliberately to avoid having to pay the requisite charges.
Baroness Jeger: This seems to become more and more confusing. When I go into an old person's home I am going to give my car, for example, to my nephew. The noble Lord referred constantly to the word "deliberate". I shall deliberately give the car to my nephew. How is the court to prove that I did not give the car away in order that my assets would be reassessed and that I was only giving he car away to get out of paying the dues that could be levied on me? I can imagine that this will be a lawyer's paradise.
Lord Lyell: I do not know the value of the noble Baroness's car, but I certainly would not imagine that her motor car would fall into this ambit. Secondly, I think that the noble Baroness is misconstruing the word "deliberately". It is not a question of the noble Baroness deliberately giving the car away, but deliberately giving the car away with the intention of reducing her assets below the level which I think she will find in Section 22 of the National Assistance Act. As the noble Baroness will see—and I think that the noble Baroness, Lady Phillips, asked about this on Amendment No. 111—the whole of this section impinges.
Lord Trefgarne: Let me say at once that my noble friend is quite right. First, I want to put before your Lordships the general proposal that is contained in these measures. It is that, sadly, there are some people who find themselves wishing to go into Part III accommodation, as it is called, and who chose to do so
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at the maximum cost to the state and the minimum cost to themselves, despite the fact that they perhaps have at their disposal considerable assets. Therefore, at the last minute, before their assessment is to be carried out, they divest themselves of these assets for a song, or indeed for nothing, to one of their relatives or to one of their close friends in the expectation that they will then be assessed as unable to meet the charges to any substantial degree.
The local authority then has to decide whether a particular asset should be taken into account in assessing the resident. If that asset has been abandoned, the local authority must decide whether or not that abandonment has been done deliberately. If the resident or his representative disagrees, they can contest the assessment and, if need be, the matter can come before the courts. I do not suggest that that will happen very often—I hope it will not—but doubtless if a very large amount of money is at stake (for example, like the very valuable diamond solitaire ring of the noble Baroness, to which she referred a moment ago), then conceivably it will come before the courts and the courts can then decide whether it is an appropriate matter to be taken into account.
We are aiming to prevent people from deliberately defrauding—I can really use no other word—the local authority out of the proper charges which it would otherwise assess. I do not think that some of the difficulties which noble Lords and noble Baronesses have been imagining will appear in practice, and I hope they will agree that these proposals are reasonable.
Baroness Masham of Ilton: Before the noble Lord the Minister sits down, he referred to "considerable assets". However, the Bill says "any asset". I think that the Government will have to do better.
Lord Trefgarne: If the noble Baroness will again do me the honour of referring to the Marshalled List of Amendments, I would draw her attention particularly to Amendment No. 111, which gives more detail as to how the assets will be assessed.
Baroness Hornsby-Smith: Would my noble friend not agree that we would create anomalies if we were to ignore what are, in many cases, very substantial assets? It has long been an aim of many professional people to ensure that if their wife outlives them, she will have a good roof over her head. If we ignore someone who has a very fine house which he will never live in again—if we ignore that asset which may be worth a few thousand pounds or a very considerable sum—then we have an anomaly. On the other hand, there may be someone who, apart from the old-age pension, has a very modest private pension, say, a British Rail pension. That railway pension will be taken into account in assessing their ability to pay, and it may only be £4 or £5 a week. However, if we ignore assets, a woman whose house is worth £50,000 or £60,000 will not be assessed. Although I accept what the noble Baroness said, that we could perhaps do with greater definition as to the level at which assessment of assets starts, I think we should recognise that if we wipe out these hard, tangible assets, we shall create many anomalies that will be unfair to people who perhaps

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live in a council house, which they will give up and which is not an asset, but who have a small pension which is most certainly taken into account when assessing their ability to pay if it is on top of their old-age pension.
Baroness Darcy (de Knayth): Has the Minister been able to put his finger on the part of the Bill which says that we are only talking about deliberate avoidance? Is the phrase "deliberate avoidance" in the National Assistance Act? I am afraid that I have left my copy outside the Chamber.
Lord Trefgarne: In answer to the noble Baroness, Lady Masham, I referred earlier to the provisions of Amendment No.111, which is one of the amendments that we are now considering, which defines the assets to be taken into account as those defined in the National Assistance Act 1948.
Baroness Darcy (de Knayth): But does this also refer to "deliberate avoidance"?
Lord Trefgarne: As I said earlier—and I think that I have covered this point three times—the question of deliberate avoidance falls to be assessed by the local authority.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 107:
Page 17, line 9, after (" any ") insert (" such ")
The noble Lord said: This amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 108:
Page 17, line 15, leave out (" receiving the asset ") and insert (" to whom the asset is transferred by the person availing himself of the accommodation ")
The noble Lord said: This amendment is to ensure that the provisions of Clause 15 apply only to the persons to whom the resident transferred the asset in question. If those persons subsequently transfer the asset to others, their successors in title will not have to assume the liability for the debt of the resident. That liability will rest with the original transferees. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 109.
Page 17, line 15, leave out (" jointly and severally ")
The noble Lord said: It may be for your Lordships' convenience if, with this amendment, I deal also with Amendments Nos. 113 and 114. The amendment in line 15 is intended to ensure that, where assets have been transferred to more than one person, each of those persons, or donees, will be concurrently liable for a proportion of the resident's debt related to their respective share of the value of the transferred assets. It is intended that where one of several donees cannot be traced, his liability shall not be apportioned among the other donees.
The amendments to lines 28 and 31 strengthen this by referring to the "liability" of the donee rather than
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to "sums recoverable". But there has been no change of intention in so far as Clause 15 relates only to the recovery of sums due to a local authority. I beg to move Amendment No. 109.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 110:
Page 17, line 17, leave out first (" the "(and insert (" its ")
The noble Lord said: This is a drafting amendment. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 111:
Page 17, line 20, at end insert—
(" (1 A) This section applies to cash and any other asset which falls to be taken into account for the purpose of assessing under section 22 of the National Assistance Act 1948 the ability to pay for the accommodation of the person availing himself of it.")
The noble Lord said: This amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 112:
Page 17, line 27, after ("asset") insert ("to which this section applies").
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 113:
Page 17, line 28, leave out ("sum recoverable from") and insert ("liability of).
The noble Lord said: This amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 114:
Page 17, line 31, leave out from beginning to ("exceed") in line 32 and insert ("a person's liability under this section shall not").
The noble Lord said: This amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 115:
Page 17, line 34, at end insert ("to which this section applies, other than cash.").
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 116:
Page 17, line 42, leave out from ("incumbrance") to ("and") in line 43 and insert ("on the asset").
The noble Lord said: The purpose of this amendment is merely to ensure that there is appropriate recognition of any incumbrance on this asset, regardless of how it may be discharged by the person to whom the asset was transferred. It is fairly simple. I beg to move.
On Question, amendment agreed to.
On Question, Whether Clause 15, as amended, shall stand part of the Bill?
5.20 p.m.
Lord Wallace of Coslany: On behalf of my noble friend Lady Jeger, the noble Baroness, Lady Masham of Ilton, and myself I beg to move to leave out Clause 15. Those who have been present in the Chamber and

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have listened to the discussion and the doubts raised on the various amendments, will realise that there is a great deal of misunderstanding and difficulty with the administration of this clause. In my opinion, so far as this clause is concerned, the Government have got themselves in a right mess. We are approaching Christmas, and we all know Charles Dickens' famous book in which Scrooge appeared. At the moment the Government—not the Minister, because he is a nice chap—appear in the guise of Scrooge. Who knows? they may repent later.
This is a mean and vicious clause. The clause itself raises the cloud of suspicion on every old person entering an old people's home. "Has the old girl, or old boy, discharged the assets? How much are the assets worth?" Often some old people's ideas of the value of their assets is more or less glorified. I once had the possibility of receiving an ostrich egg in a glass case. That asset has now been disposed of. Some people thought it would be valued at thousands of pounds. It fetched £20, less commission. If the person concerned had been put in a home and I had received such an asset, I should no doubt have had to pay something on the £20. It is silly and stupid.
In any case, if assets are disposed of in this way, it reduces the assessment made on the individual. That is the purpose of it. Obviously, the authority could assess if the asset were in the individual's possession, but at the moment authorities have no power to put a charge on the persons who receive the asset. In civil law there are only two cases known where such charges can be made: under the Bankruptcy Act 1914 with a time limit of two years prior to bankruptcy, and the Matrimonial Causes Act 1973 with no time limit. Even with supplementary benefit there is no liability at the moment on other persons to whom an asset has been transferred.
What I object to very strongly indeed is the slur that it casts on all the old people entering a home, in the sense that it raises the suspicion, "Ah, what have they disposed of?" It means somebody going along and snooping into the home before the person leaves it, to find out what they have got and to value it. Just realise the ridiculous administrative problems and the injustices there will be. The noble Lord shakes his head, but this is a quite unprecedented move that the Government have taken in order to recover a few pounds from elderly persons.
Anybody would think by the way that the noble Baroness, Lady Hornsby-Smith, and others spoke on the value of property, that we are a nation of millionaires. As a matter of fact the majority of people in this country are not too well off at all, and that is not their fault. Well, it is their fault; they voted for the Government that put them in that position. However, I do not want to bring in political issues at this time of Christmas. The noble Lord really and truly has brought forward in a smooth manner—which is his custom—a clause which can only be regarded as something that ought to be removed at the earliest possible moment. I beg to move the deletion of Clause 15.
Lord Trefgarne: I hope that your Lordships will not agree to the deletion of this clause. I am not inclined to brush aside quite so readily as the noble Lord is the
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words of my noble friend Lady Hornsby-Smith. The fact is that there are very many old people who go into Part III accommodation, as my noble friend pointed out, who are rightly and properly assessed in accordance, for example, with some modest pension which they receive. Is it right, therefore, that those people who perhaps had a substantial asset in the form of a house—and many old people have a house; it is no good the noble Lord suggesting that that is not so—and who chose to divest themselves of that asset immediately before they came to be assessed, deliberately to ensure that they would not be charged at what would otherwise be an appropriate level, should escape scot free, which is really what happens at present and is what we propose to contain under the provisions of the Bill? This is greater justice, not less justice. I hope your Lordships will agree that the clause should stand.
Lord Davies of Leek: Would the noble Lord try to answer this case? The dear old gentleman, or old lady, who happened to own a house is penalised. But if my father were rich enough and he said to me, "Look, I am going to give you £30,000", and he lives for another five years, I would get that £30,000 without any taxation. In other words, what is sauce for the goose is sauce for the gander. It is a hotchpotch. It needs looking at again. It is unfair because there are class differences here.
Baroness Phillips: I too should like to comment on this clause. Since when was the gift of something described as deliberately divesting yourself of it? It is appallingly unchristian. Listening to this, we are back in the Dickensian period, when people went in fear. "I am now going to look very carefully"—
Lord Trefgarne: I wonder whether the noble Baroness would allow me to intervene? I shall tell the noble Baroness exactly when "deliberate abandonment", as the expression is, first came into parliamentary parlance. It was in the Supplementary Benefits Act 1976, paragraph 25 of Schedule 1 to that Act, passed in the time of the Government of the noble Baroness.
Lord Kilmarnock: As there seems to be considerable feeling about this in the Committee, would the noble Lord consider taking this clause away to see whether he could redraft it to take account of the points raised by the noble Baroness, Lady Hornsby-Smith?
Lord Trefgarne: I am afraid I could not agree to do that. This clause is an important part of the proposals we bring before your Lordships in this Bill. Its intention is to apply a greater degree of justice to the people whom it will affect, not less justice. I hope your Lordships will agree to include it.
Baroness Masham of Ilton: I added my name to that of the noble Lord, Lord Wallace of Coslany, and the noble Baroness, Lady Jeger, because I felt that this was an unworkable clause. I feel that it must have been drafted by lawyers who had many out of work lawyer friends. When other people try to interpret this Bill when it becomes an Act, out in a local authority I do not think that they will approach it in the same spirit as the Minister has today. That is what we have to be sure about. Noble Lords and noble Baronesses from all

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over the place are worried. My noble friend sitting next to me is about to speak because she has not had her important question answered by the noble Lord the Minister. If the Minister does not understand it, how on earth can somebody in a local authority understand it? What I am very worried about—and have been ever since I saw it written down—is the phrase "any other asset" because it will not be interpreted in the way the Minister wants it interpreted. I say that because I know some people in some local authorities—not all, but some—and some are much meaner than others.
Baroness Darcy (de Knayth): As my noble friend Lady Masham said, I was about to speak, I had better speak now. The Minister has been saying that the clue lies in Section 22 of the National Assistance Act and, having been through all eight subsections of that provision, I can find nothing about deliberate dodging, as the noble Lord, Lord Wallace, put it. Subsection (5) refers to Schedule 2, which, being four pages long, I have not had an opportunity to digest, but I see no mention of deliberate avoidance. I appreciate that it may, to a certain extent, answer the point raised by Lady Masham, but as the provisions refers to ten shillings and six pence, it may be rather obsolete, anyway. If the Minister has a better grasp of Section 22 and Schedule 2 than I have, perhaps he would be prepared to explain it a little more thoroughly.
Lord Trefgarne: With respect to the noble Baroness, she is terribly confused over this. That does not surprise me because this a confusing matter. As for "deliberate abandonment", when referring to the National Assistance Act 1948 I was answering her about the type of assets that were to be taken into account.
Baroness Darcy (de Knayth): I think he was answering my noble friend. I asked twice about deliberate avoidance. I did not ask about assets. The Minister told me at that stage that he had already answered my question three times by reference to Section 22.
Lord Trefgarne: That was not what I said, with respect, and if she looks at the record tomorrow she will see that I said something different.
Baroness Darcy (de Knayth): I apologise if I am wrong and I will read Hansard tomorrow.
Lord Trefgarne: I said to the noble Baroness, Lady Phillips, that there was a precise definition of "deliberate abandonment" in Schedule 1(25) to the Supplementary Benefits Act 1976.
Lord Banks: When speaking earlier, the Minister referred to somebody who effected a transfer of this kind at the last minute, but of course the last minute covers the previous six months, to the date of actually going into accommodation. I believe it has become clear from our recent discussion that there is nothing in the clause—and I do not think there is anything referred to by the clause—which contains a reference to this being carried out deliberately. It seems that anybody who makes a transfer within the previous six
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months is caught. One may say that the local authority need not necessarily apply the provision, but they may well do so. So anybody who makes a transfer, deliberately or innocently, is, it would seem, liable.
Baroness Robson of Kiddington: I am inclined to support the amendment, but I must ask a question which arose in my mind as a result of the comments of the noble Baroness, Lady Hornsby-Smith. She drew a comparison between someone living in a council house and someone living in a £50,000 house and said it was not fair that their contributions should not be different, because one would be better off than the other. Not everybody lives in a £50,000 house, even though people may own the house in which they are living.
Say an elderly person is living in a council house and has members of the family living there. Say another person own a little house, which is not worth £50,000, and also has members of the family living there. Before going into Part III accommodation or into an old persons' home, ownership of the house is transferred to the family so that they will have the same security, because the local authority are likely to transfer the tenancy to other members of the family, or could do so. If that person transfers the ownership of the house to the members of the family who are living with him, then when he is assessed, having moved into the local authority accommodation, will he be assessed on the complete value of the house or on just the rent that will be payable? It is important. One could be penalising the person who has saved enough money to buy a house much more than the family of the person living in a council house.
Lord Trefgarne: The noble Baroness pose a perfectly proper question, but I would want to study what she said and consider precisely the implications of the example she gave before offering a definitive answer. I rest on the basic assertion which I have put before your Lordships several times: that we are seeking to deal here with deliberate abandonment as defined in the statutes. I now have before me the Supplementary Benefits Act 1976, and from its appearance the Committee will understand why it is not my everyday bedside reading. Paragraph 28 of the provision to which I referred says:
"If a person has deprived himself of any resources for the purposes of securing supplementary' benefit, or increasing the amount of any such benefit, these resources may be taken into account as if they were still his".
That was the reference I made to the noble Baroness, Lady Phillips, and, indeed, for the noble Baroness, Lady Darcy (de Knayth).
Lord Winstanley: Is it not a fact that the Government have set up an inquiry into the working of that provision of the supplementary benefits rule which the Minister quoted because, in the view of the Government, it is not working fairly?
Lord Trefgarne: The noble Lord bowls a fast one at me and I believe he is correct. However, it does not depart from the principle enshrined in the statute. It certainly does not depart from the principle of the proposal that I put before the Committee, which, as I

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have said time and again in this short debate, is designed to enhance justice towards those to whom the provision applied and not to detract from it.
5.37 p.m.
On Question, Whether Clause 15, as amended, shall stand part of the Bill?
Their Lordships divided: Content, 78; Not-Content, 69.
Resolved in the affirmative, and Motion agreed to accordingly.
Clauses 16 to 19 agreed to.
Schedule 8 [Social security adjudications]:
5.46 p.m.
Lord Trefgarne Lord Trefgarne moved Amendment No. 117:
Page 60, line 18, at end insert—
("(3A) Without prejudice to the generality of sub-paragraph (3)(a) above the enactments specified in Parts II to V of this Schedule shall have effect subject to the amendments there specified.")
The noble Lord said: This is a drafting amendment. I beg to move.
Lord Banks Lord Banks moved Amendment No. 118:
Page 60, line 28, at end insert—
("Sufficient number of adjudication officers shall be appointed by the Secretary of State to ensure that claims are dealt with so far as practicable within fourteen days and where a claim is urgent forthwith.")
The noble Lord said: This amendment, which I beg to move, would place the Secretary of State under a duty to appoint sufficient numbers of staff to ensure that claims are dealt with, as currently required, within 14 days. Further, the duty would extend to there being sufficient numbers of staff to deal with urgent cases immediately. Staffing levels, in particular in relation to supplementary benefit, are giving serious cause for concern. A number of offices in Birmingham and elsewhere are shut, due to industrial action over staffing levels. In a recent case a claimant in urgent need was refused an appointment for some days. An inquirer on his behalf was told, "We can see only so many immediates". In Oxford—an office currently closed by industrial action—the numbers of claimants has risen from 16,599 in August 1981, to 19,113 in August 1982, but staffing levels have remained constant at 146.
The increasing emphasis on fraud work may mean that the numbers of staff dealing with the routine administration of claims has dropped at a time when the numbers on supplementary benefit have risen considerably, from just under 3 million in July 1979, to just under 4 million at the end of 1981—a figure that has since increased. Overall staffing levels in Department of Health and Social Security offices have dropped between June 1979 and July 1982, from 63,367 to 62,145. There could be no objection to a reduction in the numbers if it could be shown that the staff could cope, but that does not appear to be the case in the face of the very considerable increase in the numbers of people requiring supplementary benefit. I beg to move.
Lord Trefgarne: With the permission of the Committee, I should like to speak at the same time to this amendment and to Amendment No. 147, in the name of the noble Lord, which I think addresses the same point. Section 99(1) of the Social Security Act 1975, and Regulation 2(3) of the Supplementary Benefit (Determination of Questions) Regulations already require insurance officers and supplementary benefit officers respectively to dispose of claims and questions within 14 days, so far as is practicable. While there is no equivalent special provision for urgent needs payments, it is accepted that such payments should be decided as quickly as possible, and there is provision to make interim payments in certain circumstances.
I believe that these provisions are sufficient. Nearly all claims are determined within 14 days of submission to an adjudication officer, and the vast majority are determined within 14 days of the date of claim. Where delays occur in dealing with claims, this is very rarely because of delays by adjudication officers in reaching a decision. Rather, it is because of delays in obtaining evidence relevant to a claim. For example, the claimant may have to obtain additional documentation or there may be delays in arranging interviews or visits.
For these reasons, I do not believe that it is either necessary or appropriate to include these amending provisions. If there were frequent and continuing delays in deciding claims to a benefit which exceeded the statutory period, it would be for the Secretary of State to consider what remedial action to take, including, where appropriate, the appointment of additional adjudication officers.
The noble Lord has referred to certain local problems that exist at present because of industrial action within the national social security office system. Naturally, we greatly regret this industrial action. We are doing our best to mitigate its worst effects by authorising interim payments and by other means. I am not sure that passing legislation such as this would make any particular difference to the situation in the face of industrial action, but I think the noble Lord was addressing himself to what he saw as the cause of the industrial action. That is another matter, and not something which I think we could settle by way of legislation.
The Government are not satisfied, naturally, that the industrial action is properly founded, or else we would have acceded to the claims—which we do not propose to do. I think that we need to divorce the position of the local difficulties to which I have referred from the more general position to which the noble Lord addresses himself in his amendment. In the light of the general explanation that I have given, I hope he will see fit not to press his amendment.
Lord Banks: I think that possibly the noble Lord the Minister is a little complacent about staffing levels at the present time. We cannot ignore the fact that the industrial dispute in Birmingham centres round the question of whether or not they are facing an intolerable burden now that the numbers on supplementary benefit have so greatly increased. However, I would
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not want to press this point further this evening, and at the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Banks Lord Banks moved Amendment No. 119:
Page 60, line 41, at end insert—
("The Chief Adjudication Officer shall report annually in writing to the Secretary of State on the standards of adjudication and the Secretary of State shall publish his report.").
The noble Lord said: I beg to move Amendment No. 119. There have been grave doubts expressed on the quality of adjudication, particularly in relation to supplementary benefits. This amendment recognises that by requiring that there shall be an annual report by the chief adjudication officer which will be published by the Secretary of State. The Child Poverty Action Group have been monitoring the new supplementary benefits scheme since it was introduced in November 1980, and in their preliminary findings, written after four weeks, three months and six months, as well as in their final report which is due shortly to appear, the low quality of administration has remained a major problem in the new scheme, as it was under the old. The object here is to keep that under constant review to see what the standards are, and to see how they can be improved.
Lord Trefgarne: Ministers are often criticised for commissioning too many reports and letting them gather dust in dark pigeon-holes. We should be careful before imposing upon Ministers yet another duty and burden in considering annually another substantial report. But, more seriously, I am certain that we should be careful, too, about imposing on the chief adjudicating officer the further duty of preparing an annual report.
Under the provisions of the Bill the chief adjudication officer will be required to provide advice to adjudicating officers and to keep under review the operation of the adjudication system. In the early years he will be responsible for setting up the new system of initial, unified adjudication and ensuring that it is running smoothly. His most important role will be providing clear and comprehensive guidance to adjudicating officers. He may report his findings on the adjudication system to the Secretary of State if he considers that necessary. I do not think it will be helpful to impose a further duty on him, requiring him to produce an annual report. I doubt if such a report will be either necessary or useful once the system is running smoothly. The whole point of the changes that we are making in adjudication is to ensure that the system runs smoothly.
Lord Banks: Again, I wonder whether there is not perhaps a certain element of complacency with regard to the quality of adjudication on the part of the noble Lord; but, again, I would not want to press the matter further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Banks Lord Banks moved Amendment No. 120:
Page 60, line 44, leave out ("The members") and insert ("One member").
The noble Lord said: I should like to move Amendment No. 120 and, with permission, to speak

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also to Amendments Nos. 122 and 132. These three amendments would ensure that tribunals would still have to include one member who was a representative of employed earners. A panel would be constituted, for membership of which recommendations would come from bodies representing employed earners. No doubt the recommendations would come, among other sources, from the trade unions; and from that panel a member would be appointed to the tribunal. I think it is important that employed earners should not feel that their general interest is not represented within the membership of the tribunal. They should not feel, however erroneously, that bosses and bureaucrats were ganging up against them. I beg to move.
Lord Wallace of Coslany: I should like to support the noble Lord, Lord Banks, on this. We support all his amendments. It was a question of two great minds thinking alike; and he got there first. If the Committee accepts that explanation, good luck to them! The point I want to make is that the noble Lord, Lord Banks, referred to a member of a trade union. In fact, the TUC are very concerned about the Government's proposals. They feel that the decision seems to mean that the trade union movement loses the right to nominate one member of the tribunal. The TUC say that, over the years, trade unions have tightened up their procedures and have produced good quality people. If the panel is to be opened up, what group are they going to be opened up to? I think that the TUC, who have provided excellent people on various committees—national health committees and many others—and who are a responsible body, should have some degree of representation. I should like to support the amendment.
Lord Trefgarne: These three amendments would restore the present position on appointment of tribunal members, under which one member of both NILTs and SBATs is drawn from a panel representing employees. The intention of the change we are proposing in the Bill is to retain existing arrangements for nomination but to broaden the base to include not only representatives of work people and employers but of other groups as well, such as the disabled and single parents. Claimants are, of course, drawn from a wide spectrum, and we consider it desirable that committees or organisations which represent them also should have an opportunity to nominate members. Trade unions will still be invited to nominate members, but they will not retain their existing monopoly on nominations of one of the members. The Council on Tribunals has welcomed the change we are proposing. I hope the noble Lord will not press his amendments.
Lord Banks: This is an important point. I appreciate what the noble Lord has said about extending the membership of a tribunal more widely so that it includes people who are not at the present moment specifically included, but I do not think that that should be done at the expense of someone who represents the employees. Otherwise, there may well be a danger that employees will think that the tribunal is loaded against them. For that reason, I should like to test the opinion of the Committee on this particular amendment.
6.1 p.m.
On Question, Whether the said amendment (No. 120) shall be agreed to?
Their Lordships divided: Contents, 60; Not-Contents, 80.

DIVISION NO. 4

CONTENTS

Ardwick, L.

Kagan, L.

Aylestone, L.

Kaldor, L.

Balogh, L.

Kilmarnock, L.

Banks, L.

Listowel, E.

Birk, B.

Llewelyn-Davies of Hastoe, B.

Bishopston, L. [teller.]

Lloyd of Hampstead, L.

Blyton, L.

MacLeod of Fuinary, L.

Brimelow, L.

Mayhew, L.

Brockway, L.

Mishcon, L.

Caradon, L.

Molloy, L.

Cledwyn of Penrhos, L.

Oram, L.

Collison, L.

Peart, L.

Cooper of Stockton Heath, L.

Phillips, B.

Davies of Leek, L.

Ponsonby of Shulbrede, L.

Davies of Penrhys, L.

Rhodes, L.

Diamond, L.

Robson of Kiddington, B.

Elwyn-Jones, L.

Sefton of Garston, L.

Ewart-Biggs, B.

Stedman, B.

Foot, L.

Stewart of Alvechurch, B.

Gaitskell, B.

Stewart of Fulham, L.

Gladwyn, L.

Stone, L.

Gregson, L.

Taylor of Gryfe, L.

Hale, L.

Taylor of Mansfield, L.

Hampton, L.

Underhill, L.

Hanworth, V.

Wallace of Coslany, L.

Hatch of Lusby, L.

Wells-Pestell, L.

Houghton of Sowerby, L.

White, B.

Jeger, B.

Wigoder, L.

Jenkins of Putney, L.

Winstanley, L. [Teller.]

John-Mackie, L.

Wootton of Abinger, B.

NOT-CONTENTS

Airey of Abingdon, B.

Lindsey and Abingdon, E.

Avon, E.

Long, V.

Bellwin, L.

Loudoun, C.

Beloff, L.

Lucas of Chilworth, L.

Boardman, L.

Luke, L.

Brougham and Vaux, L.

Lyell, L.

Cathcart, E.

MacLeod of Borve, B.

Cockfield, L,

Mancroft, L.

Coleraine, L.

Margadale, L.

Colwyn, L.

Marley, L.

Craigavon, V.

Masham of Ilton, B.

Cullen of Ashnourne, L.

Massereene and Ferrard, V.

Daventry, V.

Merrivale, L.

Denham, L. [Teller.]

Mersey, V.

Dilhorne, V.

Mottistone, L.

Drumalbyn, L.

Mowbray and Stourton, L.

Eccles, V.

Napier and Ettrick, L.

Elliot of Harwood, B.

Newall, L.

Elton, L.

Nugent of Guildford, L.

Erroll, E.

Orkney, E.

Faithfull, B.

Orr-Ewing, L.

Fortescue, E.

Plummer of St. Marylebone, L.

Fraser of Kilmorack, L.

Renton, L.

Gibson-Watt, L.

Romney, E.

Glenarthur, L.

St. Davids, V.

Hailsham of Saint Marylebone, L.

Saint Oswald, L.

Salisbury, M.

Hatherton, L.

Sandford, L.

Holderness, L.

Skelmersdale, L.

Hornsby-Smith, B.

Soames, L.

Hylton-Foster, B.

Somers, L.

Kinloss, Ly.

Strathcona and Mount Royal, L.

Kinnaird, L.

Lane-Fox, B.

Strathspey, L.

Lauderdale, E.

Sudeley, L.

415

Swansea, L.

Vaux of Harrowden, L.

Swinfen, L.

Vickers, B.

Swinton, E. [Teller.]

Vivian, L.

Terrington, L.

Wakefield of Kendal, L.

Teynham, L.

Wynford, L.

Trefgarne, L.

Young, B.

On Question, Motion agreed to.

Lord Denham: I think it was agreed that at this time we should adjourn the Committee stage and move on to the next business. I beg to move that the House do now resume.
Moved, That the House do now resume.—(Lord Denham.)
House resumed.

ECC 17th Report: Internal Market
6.10 p.m.
Lord Greenhill of Harrow Lord Greenhill of Harrow rose to move, That this House takes note of the Report of the European Communities Committee on the internal market (17th Report, 1981–82, H.L. 204).
The noble Lord said: My Lords, the committee are grateful to the House for making time available to debate this report on the internal market. We are also very grateful to those noble Lords who have volunteered to speak at what is a most inconvenient time. Several months have passed since the publication of the report—indeed, it is almost six months. During this time, the international trade situation has deteriorated seriously. We have had a basically unsatisfactory meeting of the GATT, despite the Government's very sincere efforts; and the results of the Copenhagen Summit must be a matter for conjecture. At that summit, the leaders called firmly for agreement on fundamental developments in the internal market. They asked for agreement by March of next year. Frankly, it seems to me that that is very unrealistic; but it is against this background that our discussion takes place this evening.
The sub-committee had a good deal of difficulty with this report. Like other bodies that we know, we had our share of "wets" and "drys". We found it very difficult to come to clear-cut and agreed conclusions, in spite of the great help that we received from our adviser from the Centre of European Studies at the University of Sussex. The centre carries on continuously valuable work in this field. Finally, we settled for concluding paragraphs which we described as the overall picture. In my personal view, the overall picture is a disappointingly sombre affair but others may see glimpes of light in it. The whole subject of the internal market is extremely complex, as the voluminous evidence attached to the report clearly shows. We decided to deal with one comparatively narrow but representative aspect of it, namely, the movement of manufactured goods across frontiers within the Community.
Members of the House will recall that one of the prime objectives of the founders of the European Community was to create a single domestic market,
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and from this they anticipated would flow notable political and economic advantages. Our report shows, in the limited area we have chosen, how far this has been achieved. It is thus an important indication of the progress to date of the Community as a whole. I do not believe that we could fairly draw anything but a negative conclusion. The inescapable fact is that the political will necessary for the establishment of a real, internal market whatever its merits (and they must be good merits) is still wanting. The events of the last few months will have done nothing to increase that.
In a document issued last month, the Commission acknowledged that almost no progress had been made in the last year or so since the beginning of Commissioner Narjes' energetic internal market campaign. The Copenhagen Summit reflects the Council's dissatisfaction with this state of affairs. Maybe events have brought about a change of heart but, as I see it at the moment, the primacy of the national state remains largely unchallenged and, despite the rhetoric of statesmen and the dedicated work of the Commission, the integrated Community market looks a long way off. As the Commission say, the Council's present indecision contrasts with the proliferation of measures taken in self-protection by national authorities. For there are a surprising array of instruments in the hands of EEC member states, with only ineffective sanctions against their abuse, that permit Governments to frustrate the growth of intra-EEC trade and to apply protectionism within the Community if they so wish.
Some of the origins of this lie in the lack of progress of the EEC programme of technical harmonisation and the associated fact that non-tariff commercial policy remains fairly in the hands of national Governments. They often act in independent ways, especially against third countries, and so effectively fragment the internal market. Perhaps the surprising thing is that these national instruments are on the whole not being used actually to curb existing trade but rather to prevent its expansion.
Members of the House will be aware of the long list of mutual complaints by member states about particular barriers to trade erected against each other, but our report refers especially to the unpredictability of the barriers to trade, and it is this which apparently deters and discourages United Kingdom manufacturers from exploiting the full possibilities of even the existing market. My own feeling is that ultimately it will be the initiatives of industry itself rather than of Governments or of the Commission which will be the decisive factor in the growth of the internal market.
There are some signs that the strongly nationalistic attitudes of some, but not all, European industries are weakening in the face of United States and Japanese technological advance, and that the need for European survival of certain industries will bring them together. The Commission has begun to realise that this could be fostered by differentiating between Community and third country products. But we must not forget that the alternative attraction of association with United States and Japanese high technology partners will inevitably be a distracting influence. I acknowledge that what I have said may be falsified by the Copenhagen decision. It may be that member states will swallow their national rivalries and effectively "gang up" against all comers, but one might be forgiven for being sceptical.
I do not mean to imply by what I have said that no progress at all is being made towards an integrated internal market in any important area, and especially in the area which we have chosen to report upon. A lot of people, both official and unofficial, have been working hard, with a fair measure of success, and the evidence attached to the report reveals this. For example, in sensible and practical ways the systems for processing imports and exports at Community frontiers are being improved. Her Majesty's Customs told us that about half of all exports from this country are now being undertaken with simplified concessionary procedures, and members of the committee were able to see this on the spot at Dover, where they also saw the new computerised entry system. But there is not the reduction in frontier delays, and therefore of frontier costs, which might have been expected and, sadly, good reasons still remain for these delays, such as health reasons and reasons of security.
As the recent White Paper showed, there is greater awareness than ever before of the need for the acceptance and use of internationally agreed standards as a guarantee of quality. The committee heard about a very large number of specialised groups, including, from this country, the representatives of the British Standards Institution. We concluded that their work in the European, and, even more, in the international, field should be given the maximum encouragement. A similar role is played by SITPRO, the British organisation for simplifying trade procedure. Their enthusiasm and zeal has led to the creation of sister bodies in many other member states, and these bodies ginger their Governments and the Commission into action.
Finally, the courts are increasingly active in enforcing the right to trade freely throughout the Community. The European Court itself looks at cases brought by the Commission against member states which, they allege, have introduced illegal protectionist measures. The Cassis de Dijon decision, which is set out fully in the report, could have a far-reaching effect in creating a single internal market. But the significance of this European Court ruling has still to be fully tested.
The Times reported a couple of weeks ago that there were a large number of cases outstanding in the European Court—40 against France, 28 against Italy, 17 against Germany, and so on. There are relatively few—as a matter of fact, nine only—against the United Kingdom, but we should not forget the political antagonism that even a few cases can cause. We have heard recently in the House of the problems of the whisky trade. There has been much press comment about the import of cars from Europe. I can see no solution to either dilemma. National courts are also involved. Individual firms can challenge the legality of national protectionist regulations and, despite the costs and delays, more of them now do so. But formidable obstacles in these and other areas remain.
In particular, the report draws attention to the anomalies in the transport systems of the Community. Others, again, are the obstacles which are inevitably tied up with a system in which the collection of tax remains at national level. Some countries, for example, collect VAT on imports immediately, and others on a deferred basis. This leads to complications
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and delays and, once again, the tenacity of national views prevents reform.
The even more fundamental obstacle to completely free trade is, of course, the lack of a single Community currency and the rate distortions to trade caused by volatile exchange rates. This was not an aspect which we looked at in detail, and the new inquiry by the Select Committee on the EMS will doubtless do so. But it reminds us all how formidable and radical are the problems ahead, and, maybe, the debate later this week on the Motion of the noble Lord, Lord Lever, will give some guidance.
Finally, it is only by a general understanding by individuals, firms and Governments of the advantages to be gained from an integrated Community market that the political will which is needed to achieve it will be created. But the committee concluded that this political will is largely absent at the moment. One might be forgiven for believing that it is beyond the reach of this generation. Others may consider that patience and persistence will enable the original hopes of the Community to be attained much sooner. Maybe the Minister can encourage us. My Lords, I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on the Internal Market.—(Lord Greenhill of Harrow.)
6.25 p.m.
Lord Kaldor: My Lords, the noble Lord, Lord Greenhill of Harrow, and his committee are to be congratulated on producing a lively and highly informative report on what the Common Market means in terms of free trade and unhindered competition in manufactured goods inside the Community. We are also grateful to him for arranging this debate today, and for giving us a brief account of what has happened in the four or five months since his report was published.
For most people, the Common Market is a customs union within which, to quote the words of the White Paper of July, 1971,
"there is a single, permanent, assured and greatly enlarged market".
in much the same sense in which the United States or the United Kingdom form a single market protected by a customs frontier at their border. But, as the present report shows, so far as manufactured goods are concerned, the so-called "internal market" of the EEC is nothing of the sort; and the purpose of this report is to explain, as concisely as possible, why it is not. Indeed, on reading the report, one is bound to conclude that the Common Market could best be characterised as a preferential trading system, where goods originating in one member state are treated more favourably by another member state than goods originating in non-member states, but not nearly as favourably as goods produced within the importing country itself.
In this sense, the common internal market resembles the preferential system of the British Commonwealth, as it existed after the Ottawa agreement. Indeed, in some ways that system represented, in its heyday, a more genuine effort of economic co-operation than the EEC as it actually developed, though it did not employ such dramatic

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language or labels, nor did it proliferate an enormous bureaucracy and a common parliament, with large expense accounts but with very limited powers. The Ottawa agreement meant that members accorded to each other preferential treatment, by way of remission of duties of 10 per cent. ad valorem; and that there was free trade in agricultural goods, and a fixed levy of 10 per cent. for agricultural goods imported from outside. With one exception, members were part of a common currency system, the sterling area, which meant that relative exchange rates were fixed, and control of currency and capital movements between members was virtually non-existent.
The EEC can boast of a common agricultural policy which is an extremely costly instrument, not for the promotion of competition between producers in different member states, but in order to prevent such competition from taking place, by making it impossible, or uneconomic, to drive out high-cost producers in one part of the Community by low-cost producers in another. The common agricultural policy was designed to create uniform prices throughout the Community in staple agricultural goods and, while uniform prices are sometimes the result of free competition, it is not true the other way around. You can have uniform prices without there being any competition, and this is what the CAP was really aiming at. This is brought about by means of market intervention in all local markets, which ensures that local prices conform everywhere to the fixed Community price. So the uniform price is not the outcome of competition between high-cost and low-cost producers, but of the introduction of a purchasing system which makes such competition unnecessary.
In the case of manufactured goods, with which the present report is concerned, the situation is totally different. Here, uniform prices were expected to result from the unhindered movement of goods, just as water tends to find an equal level in a series of interconnected tanks. The present report enumerates a number of different reasons why nothing of the kind has resulted from the adoption of a common external tariff and the abolition of import duties between member states and their EFTA associates.
The report identifies a series of obstacles to the attainment of a truly common market. One is formed by the very existence of border controls which can be highly vexatious and time-consuming, and which tend to delay and in many cases prevent altogether the passage of goods across the borders. Such prohibitions can arise owing to differences in the required specification of goods, whether technical or otherwise, in different countries, some of which—though by no means all—were rendered illegal by the Cassis de Dijon judgment of the European court to which the noble Lord, Lord Greenhill of Harrow, has just referred. As he said, however, it is by no means certain how much weight will ultimately be given to it.
Another obstacle takes the form of lengthy procedures of verification, causing costly delays or the filling up of endless complicated forms required for one purpose or another, such as the repayment of VAT in the exporting country and its reimposition, normally at different rates, in the importing country. There are also unwritten obstacles to free trade due to
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the preferences in procurements accorded to home suppliers by private firms or by Governments and public agencies. In some fields, such as equipment for electricity generation or distribution, or telecommunication equipment, intra-Community trade is virtually non-existent because the purchasers in each member country deal only with producers of that country, to the exclusion of others.
However, in my view none of these factors is sufficient in itself to explain why there is so little economic integration in Europe as compared with a truly integrated economy such as the United States or, for that matter, the United Kingdom. One kind of evidence for this is provided by figures showing how much of the manufactured goods produced in any one country are consumed within that country as against others. An OECD study, published some years ago, showed that in engineering goods each major producing country of the EEC reserves the great bulk of its output—80 to 90 per cent.—for use within that country, with only a relatively small proportion being exported or imported. As against that, if you take the great centres of engineering production in the United States, like the State of Michigan or the State of New York, the greater part of the output produced there is destined for other states; and correspondingly, much the greater part of local requirements are imported from other states. In fact, how much of your total use comes from within one country and how much is destined for other countries I consider to be the best test of the degree of economic integration.
Other evidence for the absence of integration on which the present report lays some stress is the existence of large price differences between the different countries inside the Common Market which could not exist if there were genuinely free competition. The most conspicuous example of this, which received a lot of publicity recently, is the difference in the prices of motor-cars of identical makes and models sold in different member states, which can account for as much as 20 or even 30 per cent., after making due allowance for differences in taxation and transport costs. You can buy a Ford, or a BL car, or a foreign car made for the United Kingdom market and carrying the United Kingdom type approval certificate, for 20 or 30 per cent. less in Belgium or in Paris than in London.
I think the explanation for this, which is not given in the report—not even in the written evidence submitted by the Ford Motor Company which is printed at the end of the report and which devotes a lot of space to this particular subject of prices—is that the competition between car makers is of the special kind which economists call "oligopoly with price leadership". This arises when the number of producers is relatively few. So the individual producer has only a limited market which, however, is highly sensitive to the prices charged by others. You cannot sell more than a certain amount, but whether or not you can sell it depends very much upon whether your price is in line with the price of other cars. In those circumstances, one of the producers—normally the producer with the lowest cost or with the highest share of the market; the two criteria often coincide but not invariably—assumes the role of price leader, and determines not only the prices of his own makes but,

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with differences due to quality and so on, the prices charged by other producers. I believe that there is an understanding among the world's producers (probably an unwritten understanding but certainly an unpublished one) and this is a necessary supposition for explaining what actually happens, that in each particular market the price leader should always be a local producer and not a foreign producer, even though the foreign producer could easily assume that role owing to his comparatively low costs. This means that a low-cost foreign producer—say a Japanese or a French producer—will not undercut the local price leader. A Renault of the same model sells in Britain at 30 per cent. more than it sells at in France, because otherwise it would be undercutting Ford, and it is not going to undercut Ford because of the understanding that you leave the role of price leader to the local price leader and do not try to wrest it from him—for, I suppose, good political and commercial reasons in the long run.
This, to my mind, is the real explanation of why it is that you can buy all kinds of cars, always competitive with one another in regard to price, but different in each producing country—different in Belgium from France, different in Germany from Belgium and from Britain, and so on. The fact that prices are much the highest in Britain is nothing but a reflection that it is our currency which is overvalued in relation to all the other currencies. The report also reveals that relative prices show large differences between member countries. The prices for men's clothing are the cheapest in London while the prices of household appliances are cheapest in Amsterdam.
Finally, there are some fields in which the Common Market means nothing at all. This, I believe, is the case in pharmaceuticals. If you go to a chemist or a pharmacy in London, Paris or Rome you will find that in each place the products offered are different. Very often their names are quite different. They have little books which show that some product, which goes by such-and-such a name in England, goes by some other name in France, Italy and elsewhere. But in all cases they are products manufactured in that particular country, even if in a few cases they carry a common brand name. For example, Bayer's aspirin is a world famous mark, but Bayer's aspirin is produced in France, Britain and Italy, as well as in Germany.
It is evident from the tone of the report that the authors consider that the prevailing situation is highly unsatisfactory, not only on account of numerous legal obstacles but, as the noble Lord, Lord Greenhill of Harrow, has emphasised today, owing to the uncertainty of the situation in respect of that which is permitted and that which is not permitted—as well as on account of the spirit or manner in which they are administered, which shows a desire to minimise the effect of a common customs area by administrative action. This is a game in which Britain is at a comparative disadvantage. British officials are not very good at being vexatious or devious and are comparatively ignorant in the ways of operating a "dirty tricks department". I cannot imagine Her Majesty's Customs and Excise opening a small customs office in, say, Crewe or Corby, which is designated as the sole place for the importation of video cassettes into this country—a role assumed, according to newspaper
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reports, by the small customs office at Poitiers.
On 1st January, it will be 10 years since we joined the Common Market. Speaking for myself, I always considered entry into the EEC a most disastrous decision, partly because of the highly disadvantageous features of the common agricultural policy, but mainly because I felt that, in the circumstances, we were bound to be on the losing side in industrial competition. Industrial competition, on account of the economies of large scale, does not lead to convergence; on the contrary, the more competition one has, the more one creates a divergence between different producing centres.
Nothing which has happened since 1971 has made me change my mind. It was a disastrous decision from the point of view of the future of Britain. It was a decision in which both political parties and the people at large were almost equally involved. In a referendum, the people voted in favour of by a 2:1 majority, so no one has the right to blame anybody else for what occurred. The damage caused by this can never be wholly undone. None the less, after reading a brilliant book which has just appeared, written by Mr. Richard Body, a Member of another place and, I believe, of the party of noble Lords opposite, I feel that the case for cutting loose from the EEC is more urgent than ever.
In the field of agriculture, there can be no question that our membership causes very serious harm both to the people of Britain and to the third world outside Britain. To the people of Britain it means that they pay an additional £3,000 million on food, of which only about £1,000 million accrues to our farmers. The rest is needed to subsidise uneconomic production here and in Europe. In other words, the people of Britain pay £3 for the purpose of ensuring that £1 reaches the pockets of the people whom we intended to have it. To the people outside Britain, it means that production is discouraged—both by the highly artificial extension of fields devoted to the production of cereals in Britain, thereby narrowing other people's markets, and by the Community's policy of dumping surplus food, which is an additional factor discouraging production.
In manufacturing industry, the link with the EEC—aggravated no doubt by our own economic policies—has accelerated the deindustrialisation of Britain. The full effects of this will remain concealed for a number of years on account of North Sea oil, but unemployment in Britain has already passed its prewar peak and will continue to grow. As the oil bonanza begins to run out, our standard of living will suffer a catastrophic fall unless we succeed in reversing these trends in the meantime. Of this there is no sign, despite frequent optimistic pronouncements by Ministers.
A study of the figures leaves one with no doubt that joining the EEC had negative dynamic effects on the British economy; it had dynamic effects but they were of the wrong kind. It has slowed down our productivity growth and caused our imports of manufactured goods from the Six to increase much faster than our exports. Up to the early 1970s, we had a surplus of trade with the Six which existed almost every year. We then moved into a growing deficit in our trade in manufacturers so that by 1980, as Table II of the report shows, the adverse balance of our trade in manufactures amounted to £3,000 million or 20 per

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cent. of imports—most of which occurred in our trade with Germany.
Between 1973 and 1981, manufacturing output in Britain fell by 18 per cent. whereas in the rest of the EEC manufacturing output rose on average by 9 per cent. Perhaps it is unfair to make our entry into the EEC responsible for all this. The greater part of the relative deterioration occurred after 1979, since when Britain's output shrunk by nearly 20 per cent. whereas the rest of the EEC has shown a shrinkage of only 2½ per cent. So the EEC can hardly be held responsible for our present troubles any more than can the world recession, which is another favourite excuse of Ministers. World recession shows a fall in manufacturing output of 2½ per cent. but not of 20 per cent. What I can say with some confidence is that, by preventing the adoption of alternative strategies as well as by encouraging import penetration, joining the EEC has caused us a serious loss quite apart from the cost of membership of the common agricultural policy, and the diversion of trade from its traditional channels—and it would have done so even if Mrs. Thatcher had never existed.
6.48 p.m.
Lord Gladwyn: My Lords, I must begin by saying that, for reasons which I have explained to the noble Lord who is to wind up this debate, I may not be able to stay until the very end, although I hope to do so.
The ordinary and uninitiated reader of this excellent, if rather long, report—if there is such a person—may well ask how the European Economic Community manages to function at all! The difficulties in the way of even most normal trading transactions seem at first sight to be so formidable, so indigenous and even so incurable as to make a nonsense of the Community as a genuine free trade area; that is to say, an area in which trade is supposedly as unhampered as it is in Australia or in the United States of America. That is the impression one might get on first reading the report. All the old protectionist or nationalist impediments to free trade seem increasingly to be raising their disguised heads against the principles which are laid down in the treaties. I would not deny that,
"Naturam expellas furca lamen usque recurrel".
Translated, that means, "You may throw out nature with a pitchfork but she will always come back"!
Fortunately, as I think, the first impressions of a discerning reader of the report may well be too pessimistic. Let us look at some of the contrary evidence, including that quoted in the excellent speech of the noble Lord, Lord Greenhill of Harrow, submitted to the committee, and the rather contrary conclusions eventually reached by it. On page 41 of the report a representataive of the Food and Drink Industries said that though uncertainties were a strong disincentive to United Kingdom manufacturers he could quote no case where a firm had actually slipped back from making the effort.
On page 102 the Confederation of British Industry, who surely ought to know what they are talking about, are quoted as saying:
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"Setbacks within the Community should not cause too much despondency and must be kept in perspective: there is little doubt that the special disciplines of EEC membership have worked to keep markets more open. Member States know very well that an overt and substantial retreat from their free trade obligations will bring retaliation from their EEC partners in one form or another, and that their governments must therefore seek workable compromises where domestic measures touch upon the major trading interests of other Member States."
Then, at page 113, the Association of British Chambers of Commerce, which I think is possibly an equally representative body when it comes to speaking for industry, said:
"When one looks at the accessibility of the European market one sometimes wonders why some of our exporters try so hard in other extremely difficult markets. The problems there are much greater than they arc in Europe."
The British Leyland conclusion, which I think is fairly relevant and deserves reading (see page 208) says:
"In the normal course of events BL does not encounter significant problems in its own trade with the Community, although the growth of tied imports has. in BL's view, detracted from the United Kingdom motor industry's competitiveness. The emergence of price differentials"—
—to which the noble Lord, Lord Kaldor, referred—
"has created a unique situation and severe commercial problems. BL is confident that it can cope with these problems successfully provided it has time to adapt and that the operation of market forces is not hastened by legislative action".
The Ford comment is a little further on, at page 226. I think this was also referred to by the noble Lord, Lord Kaldor. It reads:
"The paradox is that the European Community seems to offer the right economic dimensions to tackle present-day problems of industrial adjustment, but the Member States do not put enough trust into the venture to allow it to perform and to succeed.".
Finally, at page 243, we read from the first paragraph of the memorandum submitted by the Retail Consortium, a body of some importance:
"After initial hesitation. United Kingdom retailers have slowly come to regard the European Economic Community as one market in which to buy and sell goods.".
All this, I think, explains to some extent what is said in the report itself, namely, that in spite of everything:
"The continuing growth of the European Economic Community's trade in the post-1973 period indicates that whilst governments may have the means of frustrating further movement towards European integration at their disposal they have resisted protectionist measures to a notable degree.".
This judgment supports the rather astonishing fact—at least, when I read it myself I found it rather astonishing—which I think slightly contradicts what the noble Lord, Lord Kaldor, recently said (see page xxiii, paragraph 60) that in 1980 just over 40 per cent. of all United Kingdom external trade is with our neighbours, compared with only 30 per cent. in 1973, and moreover that our deficit in the exchange of manufactured goods was—if I read the figures correctly in the 1981 column on page xxiii—proportionately (I emphasise proportionately and taking account of the fall in the value of money) much the same in the one year as in the other. So what general conclusions can we therefore draw from all this?
Lord Kaldor: My Lords, if the noble Lord would allow me, is he referring to trade in the EEC or trade overall with the world?
Lord Gladwyn: With the EEC.
Lord Kaldor: Trade with the EEC is given at Table II on page xxiii. The trouble is that that Table begins in 1976, and we entered the Community in 1973. If you went back a few more years you would find that before we entered the Community we did not have an adverse balance of trade.
Lord Gladwyn: That is quite true; but what is significant, I think, is that the proportion has not varied very much since then.
What conclusions do we draw from all this? One of the conclusions is drawn by the noble Lord who has just spoken, to clear out because it is just no good staying in. But I think few would disagree with the essential conclusion which is drawn by the committee and referred to by the noble Lord, Lord Greenhill of Harrow, namely:
"It is only by general understanding by governments and peoples of the advantages to be gained from an integrated Community market that the 'political will' needed to achieve it will be created. At the present time the committee regretfully conclude that this will is absent.".
I myself would not disagree with that; I think that that will is absent.
But we can also surely logically think that either a partial or a complete withdrawal from the Community, as now recommended by the Labour Party, would be the equivalent of a national disaster. It is all very well to say with the "antis" that our partners would be reluctant to contemplate any reduction in their existing and very profitable exports to this country, but to believe that, for instance, any large reduction of, say, our imports of French wine or Renault cars would not result in a corresponding reduction in our exports of Scotch whisky or Leyland Minis to France is, I should have thought, to give evidence of considerable naivety or wishful thinking.
Yet there is no doubt—and we must recognise the fact—that if the present recession continues the Community may be in danger, if not of collapse, at any rate of becoming a rather meaningless organisation. Since the beginning of the world slump, that has become increasingly evident, and it is not the fault of the Community but of the world recession as such. But before that happens, and protection really gets under way, there must surely be at the least some dramatic change of heart on the part of the Governments, resulting in that "will" to make the Community work which the committee now rightly says is lacking. Adoption of, for instance, the proposals of the Three Wise Men or Mr. Tindemans, together with the reform of the CAP, which I certainly would admit is essential, but which should coincide with an enlargement of the Community's own resources to a very considerable extent, well beyond the present limits of 1 per cent. of VAT, are essential, and of course we should also contemplate reform of the collection of VAT, as the noble Lord, Lord Kaldor, said.
All this could of itself spark off that recovery in world trade which is now languishing largely, I would say, as a result of the complete failure of the United States' market to pull itself together. As the ideas of Keynes were largely responsible for pulling us out of the last great slump, so the European idea, if only we
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have the sense to apply it, could be our salvation some 50 years later. When one thinks of it, it is absurd that, having formed a trading and economic bloc, if not a free trade area altogether, which is three times the size of the Japanese equivalent and, indeed, the largest such area in the whole world, we potter about in our little backyards never really seeing the wood for the trees. I can only hope that if towards the end of next year the Liberal-SDP Alliance has anything to do with policy it will see to it that the necessary lead is given and that a new impetus is created for the recovery of the whole of the non-Communist world.
7.1 p.m.
Lord Soames: My Lords, I shall resist the temptation of following the noble Lord, Lord Kaldor, in using this debate on a very detailed and specific matter of internal trade within the Community, to widen it to a debate on whether or not it is good for the United Kingdom to be in the Community. I shall not follow him in that line because it would be wrong to do so and to take well over 20 minutes in doing it. I hope that the noble Lord does not in any way think that my refusal to follow him signifies any agreement with almost anything that he said.
I should like to join with other noble Lords in congratulating the noble Lord, Lord Greenhill of Harrow, and his colleagues on the sub-committee, on this most excellent and valuable work. I hope that it will be widely spread and read among the Governments of the member states and in the Commission and in Parliament, for it highlights the extent to which member states continue to thwart and to obstruct the free movement of trade within the Community by a whole web of technical, administrative and other barriers. As the noble Lord said today, and as is written in the report, the committee decided to concentrate on trade in industrial products. I hope very much that it will be possible for another report to be written in future on services, for there is certainly a great deal to be said there, too.
Much of the report is necessarily of a detailed character but I should like, if I may, to make three general points. I shall make them as briefly as I can. The first is that I hope that the report will be well studied by the Commission. As the noble Lord, Lord Greenhill of Harrow, said, and I agree, its heart is in the right place and it has, particularly in recent times, done its best to encourage member Governments to break down the barriers and to liberalise trade, and to break down the non-tariff barriers of which there are all too many highlighted in the report. But, in the ultimate, it is only the Commission, if it has the strength and the will, that will be able to give the impetus to greater liberalisation and, as it were, to shame member states into action.
In saying that I am aware, of course, that there is a limit to what we can expect while all countries in the Community are going through terribly difficult times in a period of recession. The committee happens to have considered this aspect at this time, and we must bear in mind the circumstances in which we are discussing the report. I hope that at least member states will not make things worse during the recession and use the recession as an argument to increase the various barriers to trade. I suppose that this is the most

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and the best that we can expect at present, but that does not mean that there should not be considerable discussion about the extent to which it would be possible, and should be possible, to liberalise trade as the world moves out of recession into brighter skies. I hope that in all I have had to say it will be understood by your Lordships that I am speaking against that background of the awareness of the difficulties forced on all member states by the recession.
Leaving the recession on one side—and this recession has been in existence ever since the Community was created—we have this trouble of the fault lying not with the Commission or the European Parliament but with the Governments of member states who, in varying degrees, have proved themselves all too determined to hang on to various ways of obstructing intra-Community trade. I do not believe that in any way can Her Majesty's Government be put into the dock among the most guilty. Far be it for me to say that we are in a white sheet, but I was privy to the thinking of Her Majesty's Government and involved to some extent in shaping policy in this area at about the time when Mr. Douglas Hurd made a most excellent speech in the European Parliament, referred to in paragraph 4 of the introduction to the report. I should like to quote a sentence or two from it:
"Speaking in the European Parliament … Mr. Douglas Hurd … endeavoured to give a lead and spoke of a wider range of issues. He drew attention to the elimination of technical barriers to trade; the creation of a single market for services; the easing of frontier formalities; improved competition in transport including air transport; and action to stimulate competitive European industry in new technologies.".
Very good. All good stuff. The report rather nicely adds, with, I thought, a wealth of meaning:
"The speech was well received but the inherent difficulties remain.".
That is a delightfully expressed sentence with, as I said, a wealth of meaning. I hope that the sentiments there expressed by my right honourable friend Mr. Douglas Hurd will still remain, a long and recessional year later, the policy of Her Majesty's Government and that they will continue to pursue it with vigour.
My next point concerns relations with third countries. Paragraph 54 of the report refers to the fact that whereas it is absolutely right and reasonable that the EEC should set itself upon an international basis as speaking for all member states on matters of tariff reduction, it is indeed difficult to warrant the EEC speaking with one voice on matters of non-tariff barriers.
I should like to say a few words flowing from a personal experience when I was commissioner responsible for external trade during the period leading up to the Tokyo Round. I must say that I felt that I was on very strong ground talking with our trading partners on matters of tariffs, but I felt that my successor—for the Tokyo Round did not, in fact, take place in Geneva until I left the Commission—was going to be on exceedingly weak ground when trying to represent the interests of the EEC in matters of non-tariff barriers. That was a great pity because we did have, and we continue to have, within the European Community a very great strength in world terms, in world affairs, in matters of trade where tariffs are
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concerned, flowing from the fact that we have a common tariff.
But, equally, we do not get anything like the advantage that we could get if we could stand up and say as far as non-trariff barriers are concerned, "These are ours; this is what we have got. This is what we do not like in yours. We want you to reduce", and so bargain on non-tariff barriers in exactly the same way as we should be able to bargain over tariff barriers. But we are not able, alas! so to do. I hope that we will be able to make a real effort to be in a stronger position for the next round in the GATT once the recession is out of the way and we can move again into greater liberalisation of trade.
My third and final point relates to the difficulties experienced by industrialists exporting to other Community countries, owing to the wild fluctuations of exchange rates. That was highlighted frequently in evidence given to the committee, particularly by the Society of Motor Manufacturers. There are much greater difficulties for us trading into the Community, into countries that are members of the EMS, rather than for them trading among themselves. It is a fact that the fluctuation in parities within the EMS has been notably less in the last five years, for example, than it has been between countries of the EMS and those outside it. including our own. There is no doubt that there is ample proof that trade within the EMS countries is facilitated and encouraged by virtue of the comparatively small movements of parities. We would reap that advantage if we were to become full members of the EMS including, of course, the exchange rate mechanism.
When we debated the EMS my noble friend Lord Cockfield—who I am glad to see here and who will be winding up this debate—pointed out the difficulties, and two in particular: first, that sterling was a petrocurrency; and secondly, that it remained to some extent an international currency like the deutschemark. Incidentally, although he said that those who spoke in favour of the EMS tended in that debate to put great emphasis on the advantages and not to mention the disadvantages, in the speech that I made in that debatei referred in fact to those very two difficulties myself. I would only say the following to him this evening. Surely we on these Benches believe that the duty of Government in regard to industry is that, generally speaking, we should seek to provide the best possible environment to facilitate our industry in its efforts to export. We should not be trading ourselves; we should not be telling industry what to do; but we should be creating the best environment possible and then saying, "Go at it, boys". That is what we are about, in marked contrast to other parties represented in this House. If we are going to do that within the Community, it would be far better if we could get inside the EMS, and I hope noble Lords will realise that by that shorthand I of course mean the exchange rate mechanism. Every day we stay outside makes things harder.
When we get swings of 20 per cent., 30 per cent. and 40 per cent. every two or three-year period between the pound sterling and other currencies within the Community; when we look at that has been happening recently with inflation falling rapidly in this country, with the North Sea oil price having increased consid-

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erably over recent years and with our productivity better than it was some years ago, we find that the pound is weaker today than it was in the days when that situation did not obtain. The pound in fact should have strengthened, but who knows? the Government, my noble and right honourable friends, say that they have no policy as to what the parity should be. I hope they have, and I rather think the evidence shows that they do have an idea at least, if not a policy, as to where it should be. Anyway, what I find so thwarting is that, whether sterling be right up or down, whether oil be expensive or cheap, there is always lip service paid to the advantages of joining the EMS, but it remains something of rhetoric.
I must say that I do not put myself alongside some of my right honourable friends who remind me sometimes of what Lord Palmerston once said: he only wished that he was as sure over one thing as Tom Macaulay was over everything. Of course one cannot be sure; of course there are advantages and disadvantages—we all know that. But I believe that it would facilitate our ability to trade within the Community to a great extent if the disadvantages which we all know exist can be overcome. I believe that the advantages would dominate.
I am delighted that this report has been written. I congratulate the noble Lord, Lord Greenhill of Harrow, and I hope that there will be many more reports to come, including a report on the EMS and one on services.
7.19 p.m.
Lord Rhodes: My Lords, I, too, should like to congratulate the noble Lord, Lord Greenhill, on his speech this afternoon. I have had the pleasure of sitting under his chairmanship for many months, during which time this report has evolved. I would say to those who are pessimistic arising from a perusal of the report that it is far too early to start talking about going out of the Common Market: we have not been at the job 10 years yet! It takes 40 years for anything of a major nature to have an impact on mankind. I bear evidence from World War I and carry it round with me day after day. When I think of World War I, I think of the way that Europe tore itself to bits, and then, leading up to World War II, much of what we have been talking about this afternoon and previously is very academic.
Before I begin my speech I should like to ask a question. I do not expect the Minister to reply to it today because it would be unfair to ask him to do so. How many copies of this report have been printed? How many copies have been distributed? Where have they been distributed, and to whom? But most important, have any gone to members of the European Parliament? Are we ensuring that there is a wide distribution of the work that has gone into this report?—and, my goodness, some work has gone into this report under the chairmanship of my noble friend Lord Greenhill. If it has not been distributed in that way, why do we not get on with it? I raised this before on one occasion when the noble Lord, Lord Soames, was a Minister, and he came up with an adequate answer. Nevertheless, it was not a very good one. I do not expect an answer immediately. But I hope he will answer in due course.
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I shall begin with some background. The western nations have been pre-occupied during the past few weeks with the sorry state of their economics, and their inability to do much about it. First, there was the meeting of GATT for trade talks, and everyone who attended knew that they should take firm action to ward off a new war of protectionism. Instead, they all trooped off home knowing that they did not have the necessary political power to persuade their Governments back home either to reduce existing barriers to trade or to prevent new ones being erected.
History is definite on this matter. Subsidies, quotas, tariffs, all conspire to weaken the basis of world trading and the big misfortune is, of course, that all the western nations have massive unemployment and all of them are desperately trying to stop any further erosion of their own industries. There is nothing new in all this. When I was forging my business inbetween the wars I saw vividly the economic breakdown in the 1920s and the 1930s, and that breakdown led to a vast war of protectionism which heralded the second world war. The change did not come until 1937, when firms were flooded with armament orders. We do not want the same thing to happen again.
Only a matter of days after the GATT delegates departed for home another conference took place in Copenhagen. It was a meeting of the EEC heads of state. It has been said before and I will say it again: they discussed ways of reducing national trade barriers within the Common Market, but I am afraid they spent more time on how to increase external barriers. Indeed, President Mitterrand, supported by our own Prime Minister and many other heads of state, made a clarion call for the
"reconquest of the European internal market".
Out of it came new moves to protect its declining trade and its infant technology industries, but at the same time it proclaimed attachment to the international free trade order. Mr. Thorn, an advocate of protectionism, said that it would take at least five years for the EEC high technology industries to catch up with Japan. What a challenge!
This report is one of the best that has ever come out of the EEC Select Committee. It is superbly put together. If anyone here has not read it, they should remedy that at once. It is set out in absolutely superb style. In Part II it deals with the "Types of trade barriers". First, there are the technical trade barriers. It gives what they are. The next one is the administrative barriers. Then it goes on to deal with the policy of private firms and what monopolies and arrangements between firms can do in the Common Market. Then we come to Government policies and relations with third countries. In a comparatively short speech, such as the one I propose to make, it is impossible to attempt to do justice to this report, so I shall concentrate on two particular points.
In the administrative section of this report, at paragraph 42, we come to "Transport Quotas". I wish to demonstrate the illogicality of some of the things that are going on and to indicate what we can do to prevent the situation from getting worse. The present bilateral quotas for road transport between member states are not consistent with a genuine common market. Quotas are awarded only to established firms

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and it has to be an exceptional case if this principle is departed from. So there is a temptation to charge what they like. Also, the present system of licensing can lead to heavy costs when licences for a particular country are used up and goods have to be rerouted through another country. So all kinds of anomalies exist.
In evidence to us it was stated that it is often quicker to enter Hungary or Yugoslavia than to enter France at Calais. Dover is open seven days a week, 24 hours a day, but Calais shuts down at 1600 hours on a Saturday until midnight on a Sunday. The Eastern bloc can deliver to us, but we cannot deliver to them with our road transport. The West Germans are anxious to control road transport in their country because of their desire to shift goods back onto the railways. They have a bilateral agreement with Russia far more liberal than the one they have with us.
My next point is a follow-up to the point made by the noble Lord, Lord Soames. It concerns the relationship with the third world. I wish to repeat practically word for word what he said. Under Article 9 of the Treaty of Rome goods from third world countries on which duty has been paid are "in free circulation", exactly the same as goods between member states. It is logical that the EEC should negotiate with GATT because we have a common customs tariff in the EEC. On such a matter the EEC speaks with one voice. What I am trying to demonstrate is, if we spoke on more things with one voice how powerful a voice we should have in the councils of the world.
Now what about non-tariff barriers? In this the EEC does not speak with one voice. If anybody has the report at their fingertips, I wonder whether they would look at page 163, because it is a most interesting document. We have 12 examples of complaints about non-tariff barriers, and only one addressed to the EEC: quantitative restrictions on imports from third countries, along with export restraint agreements. I must say that there is an exception in that in textiles there is an EEC full agreement. Today in Brussels they are signing a new multifibre agreement which has been made possible by everybody agreeing to that particular piece of policy. It is a strong thing when the EEC speaks with a collective voice.
The number of products to which these restrictions apply varies from country to country. France and Italy have controls on 121 products; we have controls on 65; and Germany 31. The point I am trying to make is that where you have national quotas and the degree of protection differs from one country to another, goods are being routed through one market for another and by-passing the national quotas, or indeed goods from one member state are being what they call deflected to another as a result of third country exports. This is causing considerable worry to manufacturers in this country. We need a common voice on this. I believe that the negotiating position of the EEC will be strengthened tremendously if non-tariff barriers are harmonised at EEC level.
I finish on one note. The noble Lord, Lord Greenhill of Harrow, sounded rather pessimistic. However, the last but one recommendation in paragraph 82 hits the nail on the head:
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"It is only by a general understanding by governments and peoples of the advantages to be gained from an integrated Community market that the 'political will' needed to achieve it will be created. At the present time the Committee regretfully conclude that this will is absent."
If we continue to accept that the will is absent we shall go into failure after failure. But if all the countries were to get together and really try to educate their subjects and bring to bear the knowledge that they have already acquired, there is no doubt that we could make progress.
The major challenges of the next 20 years will centre on information technology and kindred sciences. I reckon that protection is death for Europe. You cannot base the future of Europe's development on an increase in world trade and at the same time put up barriers to its own market.
7.35 p.m.
Lord Brimelow: My Lords, I agree with the noble Lord, Lord Rhodes, that this report of which your Lordships are invited to take note does not constitute an argument for leaving the Community. I should like to dwell on that for a moment. It is one of a series of reports by the Select Committee on the European Communities which draw attention to imperfections in the working of the Community institutions and which suggest ways in which these imperfections might be remedied, or at least alleviated.
Take the cumulative effect. The result is a lengthening list of imperfections, and also a lengthening list of recommendations not all of which have been, or will be. implemented. These lists can be used, and may be used, by those people—and they are numerous —who think that this country was ill-advised to join the Community and would now be well-advised to leave it. But the question of the general balance of advantage of staying or leaving is a difficult one. There are so many considerations, and the considerations are disparate, and because they are disparate they cannot be aggregated in any persuasive way.
Given the difficulty of forming any general balance, I think it is desirable, when each successive report of this kind comes before your Lordships' House, that somebody should attempt the more modest task of assessing whether this report weighs in one scale or the other. I am in no doubt that this report weighs in favour of our staying in the Community, in spite of all the imperfections to which Lord Greenhill's sub-committee has drawn attention.
The report is right in saying that we shall have to chip away on a large front at these imperfections and obstacles of various kinds. In that task, as it is, we have allies and we have support: we have the Treaty of Rome; we have the Commission, which is in favour of working against the obstacles to trade; we have the European Parliament, which in general is of the same persuasion. In the last resort we have the European Court of Justice. If we were to leave the Community we should have no allies; we should not have the goodwill which we have in this task; we should be working from the outside: we should be on a losing wicket.
Therefore, despite the somewhat pessimistic tone of the report, and the rather pessimistic ending of Lord Greenhill's excellent introductory speech, it is entirely

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right that we should plug away determinedly, even if we do not expect any early success, or success across the board. In that respect one ought to remember the motto of William the Silent of the Netherlands when he was beginning his struggle against the Spaniards, that in order to undertake it is not necessary to hope; and in order to persevere it is not necessary to succeed. His cause eventually won, and I feel sure that if we continue to peg away we shall eventually reduce these obstacles to our trade.
I do not underestimate the difficulties. The Community institutions were designed to be difficult to change. The Community practices are also difficult to change. I recall that, when we joined the Community, at one of the very first sessons of the Council of Ministers, the then French Foreign Minister, Mr. Maurice Schumann, warned us against trying to change the institutions and practices of the Community. "They are not to be touched", he said, "save with a trembling hand". He was quoting from Montesquieu. He should have gone on, because, if he had, he would have found a quite different sentence, in which Montesquieu said:
"If I knew something which was useful to my country and disadvantageous to Europe. I would regard it as a crime".
I am afraid that French spokesmen are as selective in their quotations as the French Government are selective in their interpretation of their obligations under the Treaty of Rome.
But one should not point the finger solely at the French, even if they have more cases against them in the Court of Justice than any other member of the community or even if, in the list of non-tariff complaints, which the noble Lord, Lord Rhodes, quoted, they have four against them compared with one against us. But they will persist, and even we, who are not the worst offenders—that point has, rightly, been made—have had an accusing finger pointed against us in some of the evidence attached to the report by the Select Committee. I do not think we shall find the process of chipping away entirely to our liking, any more than the others will, but it is the right course and I hope the Government will follow it persistently, even of it does not lead to early results.
That is really all I wanted to say of substance, although there is a question at the back of my mind which I wish to raise. On page 61 of the report is an estimate of the cost of getting manufactured goods across the frontiers of the Community. The witness, a German Member of the European Parliament, said the Commission agreed that it was about 5 percent. of sales and that the total cost of getting goods across the Community internal frontiers was of the order of magnitude of the common agricultural policy. If that is so, it is a very striking and little-known figure, and it indicates that even if chipping away leads only to small percentage gains, the net absolute figure might be well worth while.
7.43 p.m.
Lord Mottistone: My Lords, I, too, thank the noble Lord, Lord Greenhill of Harrow, for an excellent report, and I agree with the noble Lord, Lord Rhodes, that it is one of the best the Select Committee has produced in recent times. I wish to begin by quoting
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two points from the report, one in paragraph 10, the introduction, where it says, among other things, that many of the obstacles are unintentional, and the other in paragraph 66, where it says that uncertainty is the common feature. Very similar things were said to the Government in the late 'sixties by Mr. John Bolton, when he made his report on small firms. He was saying that most of the things which were adverse to small firms and were created by Governments were done by mistake. Those points should be taken to heart not only by our Government but by the Commission in looking to see where exactly mistaken actions can, unnecessarily and unintentionally, be harmful.
I shall not delay your Lordships for long, but there are a few matters about which I have managed to acquire personal knowledge which I feel I should mention in amplification of the report. The first relates to the reference in paragraphs 33 to 38 to the simplification of Customs documents and procedures. We have before us, produced at the instigation of and with great enthusiasm by Commissioner Narjes, a paper which should introduce a single administrative document; just one form for taking all goods through the Community. I am sorry to say that while everybody agrees very much with the principle behind it, the document, which has been thrown up for people to use, is so unsuitable—and, to some, incomprehensible—that it is having to go back for further reference.
I make that point for two reasons. One is that it is an example of where the Commission is genuinely trying to be helpful—and it does not always have the support of the Governments of the member states in doing so—but is doing something that is not good enough. It is much more important that it should take trouble to take into its confidence the users of such documents, the actual traders, who have to send their goods across the frontiers—those who the noble Lord, Lord Brimelow, said were having to pay as much as it costs to run the CAP in delayed charges at frontiers. They are not being consulted, and the officials of Governments—in this case Customs officials—do not in many cases know what is needed to simplify and free the barriers to trade.
The second point I wish to raise is the reference in paragraph 40 to the postponed collection of VAT. Here again, the Commission is trying to do the right thing. As the report says, the United Kingdom—and, at the time the report was written, Ireland, and, I think, Belgium—employed what is called the postponed collection of VAT; that is, they did not collect VAT until after the goods had been imported and were in the process of distribution, when it was matched to the ordinary VAT returns, so that, in effect, the Governments carried the cost.
The Commission have instituted a directive to try to bring into force, for all member states, postponed VAT accounting. At the same time the Irish, one of the three member states which have been doing it—in trouble, no doubt, with their own finances—have cancelled their adoption of this principle, and at the moment, as the need for it is optional, they are perfectly entitled to do that. It seems sad that at the moment when the Commission is trying to make things simpler for traders one of the few states which

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were doing it is going the other way. That is another example of where the Commission's heart is in the right place but the member states are not following it.
Another major stumbling block, in my view, is the understandable view of Governments to retain control of key taxation areas, such as VAT and excise duties. I am not talking about basic taxation, which is different. In this case it would seem a shame, though understandable, that Governments should still find it necessary to retain to themselves total jurisdiction in these areas of taxation. For example, simplification of excise duties would clearly be desirable, and indeed in a speech in a recent debate on the state of the whisky industry I mentioned that point. But of course if the excise duty system is simplified throughout the Community, it is most important that any changes must not lead to a catastrophic tax increase for individual products and create new barriers for existing well-established markets. Because the Governments retain the control of the excise duties—and this is an essential part of their tax-raising facility—unfortunately one cannot be sure that if excise duties are simplified, there will not be a sufferer, and in this country it could well be beer, which would be a disaster. So that is another area where we must work towards a greater common purpose in trying to see our way through to common handling of essential basic functions.
Another matter that I should like to mention, and which is referred to in paragraph 5 3 of the report, is that of state aids. I mention this because Sub-Committee D of the Select Committee recently reported on state aids, and I think it relevant to this debate to repeat the reference that I made in the earlier debate to the need for greater effort by the Commission to devise and implement schemes for finding out about state aids and for publishing the information. It is quite clear that there is tremendous distortion throughout the trading pattern of the Community because of the use of state aids, many of which are not made public, and indeed, as the report itself states, it is particularly difficult for ordinary traders to find out about them. I think that that is a matter that should be dealt with.
My next point relates to the Cassis de Dijon case, which is reported on very fully, and splendidly, in paragraphs 21 to 29 of the report. I should like to remind your Lordships that the basic feature of the principle, as mentioned in paragraph 24, is that,
"Any product lawfully produced and marketed in one Member State must, in principle, be admitted to the market of any Member State".
The report then goes on to explain how various court findings and qualifications do not make that simple principle exactly applicable; but the fundamental is as I have described it. I agree with the noble Lord, Lord Greenhill of Harrow, that the judgment could indeed be far reaching, and one would look forward to there being evolved case law which would more effectively perform the function of harmonisation. There are parts of the report in which this point is gone into in some detail, and with which I entirely agree.
Harmonisation has in many cases been a disappointment, and an example of that in recent times has been the labelling directive, which relates to
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the labelling of packaged foods, and which was introduced two years ago and becomes effective on 1st January next. The directive refers to over 20 points at which member states can exercise their own discretion about implementation. This is called "taking a derogation". I have a list regarding this, and I had thought of trying to tell your Lordships about it, but it is so long and so complicated that it is quite impossible to summarise. Of the 25 or so areas, one state will take up a derogation under a particular heading, another state will take up a derogation under another heading, and a third state will take up yet another derogation under another heading; and combining the whole lot makes about 100 points of difference within the Community. As has been said, one member state's derogation is another member state's barrier to trade, and the principle of harmonisation, though not entirely eroded—it would be wrong to say that it was—is very much weakened because of the derogations. But it would not have been possible to introduce and pass into law the labelling directive had there not been the derogations, because the member states would never have come to an agreement.
So I believe that the Cassis de Dijon case is a very important move, and one that I hope will develop, because it will by case law create the same background that the harmonisation was seeking to create. I would hope that it will expand greatly. As your Lordships can see from the report, the judgment has frightened the Commission, and I am sorry for them. But if there are to be derogations in directives—and I do not blame the Commission for it—the essential parts of the Common Market will be enforced by the Cassis de Dijon route, instead of by the harmonisation one.
Having highlighted those points—and I am sorry to see that the noble Lord, Lord Kaldor, has left the Chamber—I would say to your Lordships most emphatically, as have other noble Lords, that, notwithstanding all the difficulties, I strongly disagree with the noble Lord, Lord Kaldor. As a wise German official of the Commission said 10 years ago, in answering questions about the Community, the Common Market can never be seen as an overnight achievement; its details will take many decades of painstaking co-operation to become fully effective. I think that what that wise German said was exactly what the noble Lord, Lord Rhodes, said to your Lordships in the opening part of his speech here tonight; and I believe that it is absolutely fundamental. I very much hope that my noble friend the Secretary of State will be able to tell us that the Government take the same view. I hope that we shall take courage from paragraph 67 of the report, which states that all the people consulted were full of hope and methods to try to make the internal market work. We must forge ahead with simplifying customs administration, making state aids public, encouraging Governments to harmonise taxation systems, initiating action to extend the Cassis de Dijon principle, and a host of other things that I have not had time to mention to your Lordships. Above all, I would hope that we should not expect instant results.
7.59 p.m.
Lord Oram: My Lords, as a member of the subcommittee which was chaired by the noble Lord, Lord

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Greenhill of Harrow, let me frankly reveal that at one time during our deliberations a number of us were rather afraid that we had bitten off more than we could successfully chew. But the fact that we finished the meal was very largely due to the skill of chairmanship of the noble Lord, Lord Greenhill, and I am sure that he has been gratified to hear the complimentary remarks about the report which have come from all sides of your Lordships' House.
I believe that the report is indeed a very useful one, not so much for any major recommendations, since they are few, but for the way in which it gives a frank description of the existing barriers to free trade within the Community, bearing in mind the way in which those barriers particularly create uncertainty for businessmen and frustrate the achievement of what all who favour the Community would wish; namely, an integrated internal Common Market.
The report is long on descriptions of problems and short on solutions. I believe that in dealing with this subject the report is none the worse for that fact. It sets out most usefully the nature of the barriers. They have been mentioned by various speakers; I will mention a few. There are the complicated administrative arrangements particularly at frontiers between member states. There are the differences in VAT procedures; there are the bilateral quotas for road transport, exclusive dealerships and inadequate standardisation of, particularly, engineering products. The sub-committee, in connection with those difficulties, puts forward a number of suggestions for overcoming them.
At the same time, our report is obviously pessimistic in its general conclusion, as the noble Lord, Lord Greenhill, has repeated in his speech. We as a subcommittee are afraid that industries in member countries, in concert with their national Governments, are so preoccupied by short-term aims that they will forgo until it is too late the international, competitive advantage of a large internal market. That is why we concluded that what is needed is a greater political will to achieve it and that that political will at the moment is absent.
One of our witnesses, Mr. Hugh Corbet of the Trade Policy Research Centre, helped us to see these difficulties in a wider international setting. I should like briefly to quote from the evidence that he submitted to us on page 7 of his submission. It, too, is a pessimistic statement. I quote from paragraph 38 of the report's minutes of evidence:
"In this deteriorating international situation, the European Community is fast losing its original inspiration and, worse, its ability to act constructively on the world scene … Being fully pre-occupied with the internal balancing of short-term advantages, the Community cannot work out a role for itself …"
That, though pessimistic, I believe to be true, but I conclude from that pessimistic picture, as did my noble friend Lord Brimelow, that in the face of that depressing picture and those difficulties the thing to do is not to quit but to persevere. That I believe to be our task in this country and in other member states.
That quotation that I have put before your Lordships describes the very great difficulties of the overall situation of the EEC within which our sub-committee had to examine the internal sitution. In one sense, the task that faced us was highly technical and,
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in a sense, narrow in its focus. But when you come to examine all its ramifications, in another sense what is involved is an examination of very wide issues indeed. I hope, and I believe, that our sub-committee did not fall between those two stools and come a cropper. I believe, as I have said and as others have said, that, faced with that difficult task, we have produced a most useful report.
Those who take the time not only to study our report but also the evidence on which it was based, will be in a better position to understand the internal difficulties facing the EEC at the present time but also the external difficulties. Those external difficulties are partly caused by, and partly the cause of, the internal difficulties. From the report I hope that there are many lessons of details to be drawn, but in my view there are two major lessons to be drawn. The first is that the nature of the world economy in which the EEC operates today is very different from the world economy of the 1950s. Many important changes have taken place; and it is a question of adapting to those changes. The internal stresses by which we were sometimes appalled are largely the result of those changed external circumstances.
I would mention two of the changes. There are others, of course. For one, I would say that the greater expectations of third world countries in today's world are very different from what they were two or three decades ago. Another is the changed attitude of America towards the Community. This is an important difference of which we need to take note. As I have said, the internal stresses very largely arise from those external changes. The sad thing about present world conferences and actions by national Governments is that these changes, these problems, are leading to increased measures of protectionism, both overt and covert. These moves to protectionism are manifest both within the Community and in its relations with the outside world.
Therefore, I believe that the second lesson that we should learn is that protectionism is the instrument by which nations seek to resist change and, in my view, if you try to resist change you are doomed to stagnate. Instead, you should adapt in order to grow. In my view, protectionism will not work; because the forces that make for change are too strong to be resisted by that method. In my view, unless the Community consciously sets about developing a liberal trade posture vis-à-vis other countries, it will inevitably be faced by increasing internal dissension and the problems which we have tried to analyse, of achieving integration in the internal market, will be increased rather than diminished. I hope that our report will have helped somewhat in the argument that is inevitably going to take place on those points.
8.9 p.m.
The Secretary of State for Trade (Lord Cockfield): My Lords, I have listened with very great interest to the speech of the noble Lord, Lord Greenhill of Harrow, as I imagine did all your Lordships. It would perhaps be trite to say that this report on the internal market produced by your Lordships' Select Committee is an interesting and valuable document. The noble Lord, Lord Oram, in his introductory remarks, described it as "a useful one". I would give it

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significantly higher marks than that. It really is of great value to have major issues of this kind probed both in depth and in detail. The decision by the Select Committee to concentrate on one particular feature of the internal market and examine it in detail was entirely right. I agree with the noble Lord, Lord Rhodes, that the report deserves a wide circulation. The noble Lord, Lord Kaldor, has a very personal and peculiar view of what the European Community is really about and how it works. If the noble Lord's view of the Community were an accurate one, I should not be at all surprised at the Labour Party wishing to withdraw from it. But in fact the noble Lord's view is not one that I accept and is not one that is accepted by the great majority of your Lordships here tonight.
Lord Kaldor: My Lords, if I may interrupt for a moment, if the noble Lord looks at my speech, he will see that most of my examples of points were taken from Lord Greenhill's report.
Lord Cockfield: My Lords, I am very glad indeed that the noble Lord read the report produced by the Select Committee. I am only sorry that it made so very little impression upon him, and I would recommend him to read it again. The vigorous defence of the Community by my noble friend Lord Soames and the noble Lord, Lord Rhodes, was particularly effective and encouraging. I was also impressed—as I am sure your Lordships were—by the careful analysis of the situation by the noble Lord, Lord Brimelow, which led to the same conclusion.
The European Community is about much more than economics. It is an attempt to weld together the people of Europe in a way which will guarantee peace and harmony inside the Community and present the strength of unity to the outside world. We must never forget this when we are immersed, as we inevitably and all to frequently are, in the internal affairs of the Community. But, if the community is about more than economics, nevertheless economics is an integral part of the tapestry and the most visible element of the design.
The intention of the Treaty of Rome was free trade at home and a common—but very modest—tariff wall against the rest of the world. It was the development of this tariff-free internal market which was designed to provide prosperity for all the members of the Community. Much of the strength of the United States derives from the fact that it provides for manufacturers a free internal market of over 220 million people enjoying between them 24 per cent. of the world's gross national product. Europe—with a rather larger population but a similar gross national product—offers a comparable market and a comparable opportunity.
But, 25 years after the signature of the Treaty of Rome, and close on 10 years after our own accession, the free internal market is still far from a reality. The fact that the summit at Copenhagen 10 days ago declared the strengthening of the internal market a priority goal is both a demonstration of this and more importantly a sign of determination to tackle one of the great outstanding problems of the Community. The actual words of the communiqué issued at the end
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of the summit were these:
"To decide, before the end of March 1983, on the priority measures proposed by the Commission to reinforce the internal market".
So there is both a sense of urgency as well as a sense of priority here.
The noble Lord, Lord Greenhill, said that the timetable was unrealistic. I hope that he will forgive me if I say that it sits a little odd that he should start by complaining, quite justly, about the slowness of the progress which had been made, and then find fault with the speed of the timetable that the Commission now wish to adopt. My noble friend Lord Soames made a very valid point which we need to bear in mind; that is, there is a limit to what we can expect to achieve in a period of recession. But it is equally true that we need to look forward to the world into which we shall enter when the recession is over.
Perhaps I may now turn from these rather broad issues of policy to more practical matters. I know from my own experience of numerous instances where our exporters to other member states have run into difficulties that they might reasonably expect to avoid in a genuinely open market. I can understand that they find it hard to reconcile with the principles of the internal market measures such as those which the French have recently announced. I am aware too of the widespread concern that continental state aids, notably in Italy, are distorting fair competition and acting as a barrier to free and open trade.
I want however for a moment to ask your Lordships to stand back to look at those legal and administrative requirements imposed by some of our partners in Europe which our own exporters find so frustrating. If we are to be frank, we must acknowledge that this frustration is sometimes reciprocated, though, as the noble Lord, Lord Greenhill. said, with very much less justification. We need to recognise that all Governments have social and administrative concerns which are legitimate—concerns, for example, for the health and safety of their citizens and for their citizens' rights as consumers. Business has to be conducted within the framework of these legitimate concerns. Firms cannot avoid the trouble of informing themselves of the legitimate national requirements which result.
Then there are requirements, equally legitimate, and fully compatible with Community law, but which are more onerous and tedious than they need to be. On these, it is possible to make progress—deperately slow at times; nevertheless, it is possible to do so—through Community action: for example, the work being undertaken to harmonise different national requirements through what is known as the Article 100 programme. Such progress may also be made bilaterally by negotiation; or through Community action to limit the impact of such requirements on trade—for example, through the work of the Simplification of International Trade Procedures Board (SITPRO).
The noble Lord, Lord Greenhill, paid a handsome and well-deserved tribute to the work of SITPRO. In contrast with what might be described as these legitimate barriers are those barriers to trade which are cynically imposed for short-term national advantage. We find barriers to the internal market in this category

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totally unacceptable. I assure your Lordships that in cases of this kind the Government do and will make it abundantly clear to the member state concerned, and to the Commission, and in the Council, that we are not prepared to tolerate measures of this kind.
There is a further major area of frustration to British business, which your Lordships' Select Committee did not explore on this occasion. It is the question of the infrastructure which underpins the internal market in goods; namely, the internal market in services. The freedom to transport goods, to insure them, to finance them anywhere in the Community is a critical part of the Common Market. I look forward to the opportunity when your Lordships' Select Committee return to that subject, which we regard as crucially important so far as the United Kingdom is concerned.
We are also concerned about the national permit quotas on lorry journeys, which is a matter to which the noble Lord, Lord Rhodes, drew attention. These restrictions have no place in a free internal market. The noble Lord also drew attention to the variation of national quantitative restrictions as between member states of the European Community. If I understood the noble Lord correctly, perhaps I might say that there is a Community procedure to avoid the problem to which he referred. Article 115 of the Treaty of Rome allows the Commission to authorise member states to prevent their national quantitative restrictions being evaded by imports from outside the Community coming through other member states. We make full use of Article 115.
The Government themselves must and will make their full contribution to help British industry take full advantage of our internal market. The Government's initiative on standards, set out in the White Paper published earlier this year, has this very much in mind. Standards, certification and accreditation need to be increasingly widely adopted and internationally orientated if British goods are to compete in this larger market provided by the European Community. Similarly, the Government have made important improvements in our Customs services. We are increasing the use of computer facilities and of other simplified procedures to speed the flow of trade.
This brings me directly to the issues on which the report to your Lordships concentrates. We recognise that underneath the technical detail standards are of crucial importance to the ability of industry to sell their goods throughout the internal market. We have therefore given our strong support to the efforts within the Community to ensure that standards are used to promote competitiveness and efficiency, and not as non-tariff barriers.
The Commission are pressing three priority areas for action. These fit in well with the specific concerns expressed in the Select Committee's report. The first two are proposals for unblocking the Article 100 programme and for procedures to ensure transparency in the making of standards and technical regulations. The third is concerned with frontier facilitation. All these measures command our strong support in principle. We will be doing all we can to secure the adoption of the frontier facilitation directive later this week. It promises to simplify and speed up inspection, to cut down waiting periods and generally improve
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co-operataion between neighbouring frontier posts. Frontier formalities and the collection of statistics with Customs documentation are also themes covered closely in the Select Committee's report.
The Government fully recognise the importance of simplifying Customs formalities. Current features offered by United Kingdom Customs which simplify trading are: computerised entry processing, special procedures for large regular imports under the period entry arrangements, and the postponement of VAT payments to the time when an importer submits his quarterly VAT returns to the Customs.
But import and export procedures and documentation still leave room for improvement. More needs to be done to accelerate the movement of goods within the Community, particularly by reducing the amount of paper work. The Government have instituted a number of reviews of Customs procedures. We have strongly supported the European Commission in its efforts to automate information exchange on imports and exports. In particular, our Customs are at present discussing with the trade the possibility of further automation of Customs import formalities. Similar work on the Continent is also well advanced.
My noble friend Lord Mottistone also referred to the single administrative document proposed for intra-Community trade. I acknowledge that doubts are being expressed as to whether the Commission's proposals represent genuine simplification. Both the enabling regulation and the document are still under discussion, and officials are consulting with trade associations to ensure that the user's views are taken into account.
Looking ahead to the mid-1980s, we hope that exchanges of information in bulk by electronic means will become commonplace. The United Kingdom has accordingly given full support to the CADDIA project, which is about to begin in Brussels. This is a Commission initiative: to give it its full title, Co-operation in Automation of Data and Documentation for Imports/Exports and Agriculture. This is an ambitious project, the purpose of which is to examine the way in which the flow of data concerned with trade within the Community can be expedited by using computer returns. The Government support initiatives aimed at securing those genuine and practical simplifications of Customs formalities which will complement the simplified procedures already operating in this country.
Another subject covered by the Select Committee's report is what is known as the parallel import of motor vehicles—a subject which has been raised during the course of this debate. The Government have specifically decided not to intervene in this trade. We recognise that the price differential which has led the British consumer to purchase elsewhere in the internal market is in part outside manufacturers' control, being due, for example, to exchange rate variation. But motor vehicles are not uniquely affected by such factors in such a way as to justify interference with the right of all Europeans to shop in any part of our internal market. The real solution lies, and can only lie, in increasingly competitive pricing by the British motor industry effecting a long overdue improvement in its cost-competitiveness.

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My noble friend Lord Soames and other noble Lords raised the question of the Eueopean monetary' system. This lies outside the scope of the present debate; but may I briefly say this. While the Government are committed to the aims of the E.M.S., and in particular to the achievement of greater exchange rate stability within the Community, my right honourable friend the Prime Minister said in another place on 7th December—and I quote—
"At present we do not intend to enter the E.M.S."
We believe that unless underlying economic conditions are conducive to exchange rate stability, sterling's participation might intensify realignment pressures. The question of sterling's participation is kept under review.
The Community has an external as well as an internal aspect. To the outside world, also, it is a single trading unit. This unity of aim and of purpose is more than ever crucial in the face of the pressures and difficulties arising from the world recession. Against this threatening background, the modest success achieved at the recent GATT ministerial meeting was encouraging. Today, I would point in particular to the recognition that the GATT is going to have to concern itself with international trade in services as well as in goods, and the work on an improved procedure for settling disputes. It is not enough for the world trading system to be an open one; it must also be fair. We will need the combined strength of our Community of 10 member states to bring pressure to bear to achieve these ends.
It is impossible to exaggerate the importance of the ' European market to this country. In 1973, when we joined the Community, some 30 per cent. of our exports went to European Community markets. Today, the figure is close on 43 per cent. We have, therefore, a crucial interest in the development of the European market as a whole, and in the removal of internal barriers in that market. The European summit at Copenhagen 10 days ago marked an important step forward. We must build on that. Our prosperity—and the prosperity of Europe as a whole—depends upon it.
Lord Greenhill of Harrow: My Lords, there are many speeches to follow in a subsequent debate, and it would be unfeeling of me to speak for more than a moment or two. But, on behalf of the sub-committee, I should like to thank the House for the kind things that were said about the report. The committee will be very happy that it has prompted speeches revealing and reflecting great experience, profound erudition, compelling sincerity and even, sometimes, a little prejudice. I should particularly like to thank the Minister for his painstaking and characteristically clear answer to the debate. I am sorry if he regretted my reference to the Copenhagen timetable. I do not complain about the timetable; I doubt whether the train will run on time. I beg leave to withdraw.
Motion, by leave, withdrawn.

Probation Officers: Pay
8.33 p.m.
Lord Wells-Pestell Lord Wells-Pestell rose to ask Her Majesty's Government what are the reasons and justification for the proposal to reduce from 1983 the rates of pay for probation officers in training. The noble Lord said: My Lords. I beg to ask the Question standing in my name on the Order Paper. It was with some diffidence that I decided to bring this matter to your Lordships' House, but some months ago I had a discussion with the noble Lord, Lord Elton, and that was followed by some rather lengthy correspondence on both sides, resulting in my not being able to make any progress at all. It is because I regard this matter as so important—and so do my friends who are supporting me in this Question—that I felt it ought to come to your Lordships' House, where it can be aired, and, I hope, aired in the newspapers and on the BBC. My friends and I fail to understand how a responsible department of Government could come to the conclusion which it has reached on this matter.
It is many a long year since we had an Unstarred Question in your Lordships' House, supported—if I may exclude myself—by a number of very-distinguished Members of your Lordships' House, including a number from the Bar. The Question relates to the Home Office's intention in 1983 to reduce the training allowance made to probation officers in training. Perhaps I ought to explain that the probation service recruits its trainees through two different channels. One is through the probation area committees, of which I acknowledge there are now only a very few, putting forward candidates for the probation service; the rest—and, I agree, a very substantial rest—coming through the Home Office.
At the present moment, a person accepted for training for the probation service through a local authority committee receives a bottom allowance of £4,677, against £4,551 when funded by the Home Office. It is this bottom point in the salary scale that I want to raise tonight, because the bottom point in the Home Office scale will fall next year from £4,551 to £3,588—a drop of £1,000. I fail to see how anyone in his right mind could justify an action of that kind.
When a trainee in the probation service, who can be as young as 22, but no younger, coming in at the bottom point next year will receive £3,588, I wonder how the Home Office justifies paying police constables who are under the age of 21 and who embark upon a two-year probation period, £6,267, with a rent allowance of between £1,000 and £2,271 a year; or, if they are 22 and over, as they are in the probation service, a starting salary of £7,356, with a rent allowance of between £1,000 and £2,000. It is always invidious to attempt to suggest the value of the contribution of one group in society compared with another, but I want to suggest to your Lordships that the contribution which the probation service is making today is of supreme importance to the problems which we are facing.
Under the new Home Office scale, there is to be no increment at all in the second year, which means that a trainee who is appointed at the new bottom rate will be something like 25 per cent. worse off in the second

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year. It means, also, that we shall have on the same courses trainees appointed by the probation committees, trainees appointed under the old Home Office scheme and trainees appointed under the new scheme which comes into force next year. We shall have three groups, all doing the same training and attending the same lectures, with three different incomes which may vary to the extent of something like £1,100. I cannot remember such a nonsensical system.
Many of the probation officers will already be graduates. I notice that in their correspondence the Home Office tends to talk about students. We are not talking about students in the sense that the ordinary man in the street understands the term. We are talking not about students but about trainees. Unlike students, trainee probation officers pay tax; unlike students, trainee probation officers pay superannuation; and, unlike students, trainee probation officers compulsorily pay national insurance contributions. It means that some of the new intake, starting at the bottom point, will be earning about £6 a day after all these deductions.
I have many friends in the probation service; 45 years ago I was a probation officer in London. For some years I was vice-president of the national association, so perhaps I ought to declare that I have a lifelong interest in this matter. I know probation officers who, by virtue of the nature of the work, occasionally do a 12-hour day—and very often a 10-hour day. And because trainees are assigned to a probation officer they will have to work similar hours. Therefore £6 a day means that they will receive the princely sum of 60p to 70p an hour. You could not get a home help for that. You could not get anything in the way of help for that. It is a shocking state of affairs. Naturally, I ask myself why the Home Office have done this. I have spoken to an enormous number of people who I thought might be in the know, but they cannot tell me.
I do not want to take up a great deal of your Lordships' time tonight. I just want to paint the picture as I see it and leave it to my noble friends to seize upon other matters in order to complete the picture. The noble Lord, Lord Elton, said in a letter to me that 10,000 people applied for the 300 places on training courses. He said that there was no difficulty about getting people. I ask the noble Lord to be frank and honest about it. Are the Home Office saying that because there are nearly 4 million unemployed they can get anybody for next to nothing? This is how it seems to a good many of us: depress the starting salary because we can always get more people than we need. But for £3,588 can you get the kind of young person you need?
The noble Lord will, I know, remind me that a large number of these people are mature students and that they will earn £4,116 or £4,746. The Home Office have to take into account age and experience, as do the local probation committees, but we need a large number of young people in the probation service. There are many young delinquents. Young people have a better rapport with young delinquents than older people, who have none at all, sometimes. It is of supreme importance that we should cater for the young delinquent by having young probation officers. I hate to think that this situation has been brought
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about simply because there is a very wide field of choice. The choice which really matters is whether people are suitable and, if they are suitable, whether they will accept £3,588 or turn away and look for something else. I ask the Home Office to think very carefully about this.
I wish to quote from a letter written by the noble Lord. He will not take this personally; he has to put up with all this because he happens to be the Minister concerned. He knows that there is no venom in it as far as he is concerned. On 27th October the noble Lord wrote to me and said:
"The Home Secretary has now agreed that the new scale should be brought into operation for students … starting in 1983".
Can the noble Lord say from his own personal knowledge that the Home Secretary knows about this? I am not prepared to accept a piece of paper which has been sent to him telling him, "Of course he does". I doubt very much whether the Home Secretary knows about it. I say this because I have some knowledge of the Home Secretary. When I was vice-president I took the chair for him at an annual meeting of the National Association of Probation Officers.
The Home Secretary is a man with vision. Many of us do not like his politics but we pay tribute to his vision and to the fact that he wants to keep as many young people out of prison as possible. The Home Secretary wants to extend the non-custodial way of dealing with offenders and he knows better than most people in your Lordships' House that there is only one group of people who can do that: the probation officers. Nobody is going to tell me, except the Home Secretary himself, that he knows this is being done. I shall believe it when the Home Secretary says, "Yes, I knew about this and I approved it". I really do not feel that he does.
I hope that the noble Lord will not turn this down out of hand. I hope his advisers will not send a note to him and say, "Under no circumstances can this be done". If the Home Office are so certain that they are right, the noble Lord should accept my suggestion that the Home Office ought to be generous enough to say, "Let us have another think about this. We may not change our mind but we should be prepared to meet a number of people who are very well informed on the practical, not the theoretical side"—as must so often be the case in a Government department. I ask the noble Lord to say, "If you want to meet me, I shall be pleased to do so and I shall be prepared to receive a small number of people to talk further about the matter".
8.48 p.m.
Lord Wigoder: My Lords, my first task on behalf of the whole House is to thank the noble Lord, Lord Wells-Pestell, for raising this very important Question, and for doing it so forcefully and succinctly and in a manner which becomes the Member of either House of Parliament who knows more about the subject than any other.
It is quite unnecessary for me to discuss at any length the crucial role which probation officers play in our society. There are noble Lords who will want to comment upon one or two aspects. May I merely mention two which I personally have come across. The first relates to the courts, when sentence is about

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to be passed and a decision has to be made as to whether the convicted person is to be given a custodial sentence. At that stage the report of the probation officer is of vital importance. Secondly, although I have never served on the Parole Board I know many of its members, and I know well how much they are bound to rely upon the reports of a whole series of probation officers in coming to a decision which is absolutely crucial and which, if their decision is wrong, may have very serious consequences for society.
When I talk about the reports of probation officers, I do so because I know from personal experience that it is not simply the report which matters; it is the reliance that one places upon the individual who has prepared the report. It is one's belief that the probation officer is a person of real calibre who has practical experience of the world and upon whose judgment courts, parole boards and others can safely rely. It is for that reason that the present decision by the Home Office to deal with rates of pay in the way proposed is liable to lower the whole standard of recruitment into what I regard as a very important public service.
It is right, of course, that there should come into the probation service from universities a number of fresh-faced young people who have high ideals; if they are sometimes a little impractical, then one can understand that. But it is equally important that there should be persuaded to come into the probation service those who are a little older, a little more mature, and who may be married and have children—people who have some experience and knowledge of the world. Such people, if they are already in employment, will not be tempted into the vital job of probation officer if the Government's whole attitude is that which appears to be expressed by the new scales which the noble Lord, Lord Wells-Pestell, is querying this evening.
I accept that there is an argument these days for cost containment and that there is invariably talk about restraint on public expenditure. I fully recognise that anyone in your Lordships' House who talks on a particular subject always accepts that there is a need for such restraint in respect of even' topic other than the one which is being discussed that particular evening. However, I feel bound to say that if the Home Office feel compelled to work within a particular budget on this particular issue, I personally would sooner see a budget applied to the appointment of rather fewer probation officers of a really high calibre than an attempt, of the kind which is apparent at the moment, to retain the existing number, or increase it, at the risk of the calibre of the recruited persons being very much reduced as a result.
I can see nothing in the present proposals to encourage people of real calibre to enter the probation service. For that reason I agree with what was said by the noble Lord, Lord Wells-Pestell, that it is no answer to argue that on the present rates offered there are more than enough applicants for the job. There are more than enough applicants for any job in the present state of our society. When one is dealing with a role of this importance, the real problem is to secure applicants of a really high calibre.
For those reasons I look forward with the greatest of
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interest to hearing what the noble Lord the Minister has to say in answer to the points which have been raised already by the noble Lord, Lord Wells-Pestell, and others which will be raised in the course of this debate. I hope that the noble Lord the Minister will forgive me, when I say that I will look forward to hearing his reasons, if I am in fact looking forward to reading them in Hansard. I express my deep apologies to your Lordships for not being able to stay to hear the whole of this debate. If I were to do so. I should splutter infectiously over even more of your Lordships than I have done already during the course of this afternoon.
8.54 p.m.
Lord Elystan-Morgan: My Lords, the probation service has a crucial and unique role to play in our society. In the 100 years or so that probation has existed in our statute law, there has never been a stage, in my judgment, at which it was so essential for the probation service to enjoy the highest morale and also to be assured of the understanding and support of Her Majesty's Government.
I doubt whether any Member of your Lordships' House, with the sole exception of the noble Lord the Minister—who has the unenviable task of replying to this debate—was not moved to dismay and incredulity, as both my noble friend Lord Wells-Pestell and the noble Lord, Lord Wigoder, have already said, on learning of the Home Office decision to impose the savage cuts they propose making in respect of training grants. I too join the noble Lord, Lord Wigoder, in expressing the deep gratitude and indebtedness of this House to my noble friend Lord Wells-Pestell, both for initiating this debate and for the vigorous and fair way in which he presented his case. It stemmed from my noble friend's deep understanding of the significance of the probation service and of the problems with which it has to grapple. My noble friend's words were words of statesmanship and wisdom, and I feel very privileged, on behalf of my noble friends, to give the fullest support to the case he has articulated so skilfully and fairly. Indeed, he has dealt so devastatingly with such a number of matters of detail that there is very little left that one can say so far as the main thrust of his arguments is concerned. His arguments were wholly irrefutable.
The Government's proposals are indefensible. They are wildly inconsistent with their general statements in this connection. They are flagrantly unjust to the trainees concerned and, so far as society as a whole is concerned, they are irresponsible and dangerous. First, they are indefensible in that the Government, it seems, seek to justify their actions according to the law of supply and demand. My noble friend has already alluded to the correspondence which has passed between him and the noble Lord the Minister. Indeed, my noble friend has been good enough to circulate copies of this correspondence, which was always intended to be a public document. I quote from one of the passages in the letter from the noble Lord the Minister, in which he states:
"Many of the universities and polytechnics have received more applications than they could handle. Such a buoyant recruitment situation needs no financial inducement."

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Perhaps I may make the same point as the noble Lord, Lord Wigoder, that, of course, one would expect there to be a far greater number of applicants than those who are individually chosen for the 350 to 400 placements which are available. There has to be a ratio of 5 to 1 or 10 to 1 of applicants to persons chosen if one is to maintain the very high standards that the service has enjoyed in previous years. The figures for applications which were given in another place on 22nd March were, for 1980, 1,926; for 1981, 1,992. I am sure that the House will wish to hear from the noble Lord the Minister, when he replies, how different are the figures for 1982. Was the number of applicants double, treble, or ten times what it was in 1981? Or was it a similar number? If indeed there was a massive increase over 1981, why on earth did the Home Office see fit to advertise in the press for applicants in September of this year?
We ask the noble Lord the Minister, what criterion did the Government have in mind when imposing the 23 per cent. cuts in the rates? Is this a general figure that is to apply to trainees generally? Is it to apply to the police? This point was made devastatingly by my noble friend. Is it to be of general application? If so, do the Government intend to make a comprehensive announcement in respect of such a figure? Or was the 23 per cent. just a figure that was plucked arbitrarily out of the air? What does the Minister mean by the words "such a buoyant recruitment situation needs no financial inducement"? Does he intend to reduce the grants still further? Does he intend to abolish them altogether? Is that what he is saying? I am sure the House will want the most specific assurance in respect of that aspect.
My Lords, we say that the conduct of the Government is utterly inconsistent. The Government have been regularly making encouraging noises over the three and a half years of their life in respect of strengthening the probation service. They have also made the proud boast that no cuts they make will affect the field of law and order. Why did the Government advertise in September of this year, if they intend to dissuade a number of otherwise willing applicants from coming forward? This is a very strange inconsistency in a Government that seem to make such a fetish of thrift.
The question of hardship has already been dealt with very fully by my noble friend. May I make this one point. Let this House not think that all the hardships are of a financial nature. A very high percentage of those who successfully complete their courses still find themselves unemployed at the end of them. Figures were given in another place to show that at the end of last year over half the 430 who completed their courses were still unemployed. The hardships in relation to unemployment are well understood. Fewer and fewer persons are leaving the service; there is a much slower turnaround altogether. What I am sure we would wish to know from the Minister is whether a number of those who were rejected in 1981 had the patience, indeed the fortitude, to hold out and make further application in 1982, and how many of them were successful.
Let me make one general point. The probation service is invaluable in relation to the supervision it
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gives to persons under probation orders, but that is only a fraction of the work that it does. I have the figures only for the year 1978; I think they amply illustrate the point. The number of probation orders in that year was 26,000. The number of juvenile supervision orders was 17,000, shared of course with other authorities; the number of community service orders was 11,000. But the other work was also enormous, supervising prison welfare, day centres and hostels, being involved with over 15,000 children who are the subject of investigations in relation to custody, wardship and guardianship; and also, the point made by the noble Lord, Lord Wigoder, over 200,000 social inquiry reports prepared for the courts, reports which are utterly invaluable if the court is to be in a position to pass a just and proper sentence.
My Lords, the community has placed upon the shoulders of that small, select, dedicated band of people who comprise the probation service, a massive burden. Over the years the service has responded loyally and effectively to such demands. Over the last three years it has shown an impressive rise in productivity. The expectations of society in relation to the probation service will continue to rise. Those expectations can only be fulfilled if, among other things, the service can be guaranteed a steady flow of applicants of the very highest calibre. The Government's proposals threaten the very seed corn of that system.
We are staggered by the irresponsible shortsightedness of Her Majesty's Government in this matter. I join with my noble friend in urging the noble Lord the Minister, who is a humane and fair-minded gentleman, to give this matter his most urgent reconsideration. What profit be it to Government to show a relatively minuscule saving in their books where the price to be paid means placing at grave risk the whole future of an invaluable service that is so central to the protection and support of society?
9.5 p.m.
Lord Hunt: My Lords, I, too, should like to thank the noble Lord, Lord Wells-Pestell, for putting down this Unstarred Question. From a long association with the probation service over the past 25 years as chairman of the Parole Board, as president of the National Association of Probation Officers and since, I can confirm and endorse everything that has been said about the dedication of probation officers to their demanding work, and the skill with which they carry it out. They work long and unsocial hours. As the noble Lord, Lord Elystan-Morgan, has said, they have to deal with a perplexing range of problems demanding a wide diversity of skills, talents and resources. They sometimes have to cope with disturbed, difficult and occasionally dangerous clients.
Quite recently I have spent a day with two probation services, the Merseyside Service and the Oxfordshire Service. As always on such visits, I was struck once again, meeting probation trainees in probation offices and doing other work, by their quality and enthusiasm. I join with others in saying that it is quite essential that the calibre of the men and women entering the service should continue to be of the same high standard as it is at present. Indeed, if it were possible

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the aim should be to raise that standard even higher still, in order to cope with the increasing and increasingly difficult and demanding jobs that will be laid upon the service in the future.
My Lords, I should like to stress the importance of maintaining the ratio, quite apart from the quality, of the mature student entrant. I used to visit the Home Office courses in the Cromwell Road in the old days, and when I was there I was tremendously impressed by the wide range of experience from various walks of life which those students represented. I believe this to be of enormous value to the service. The termination of those courses caused a great deal of concern at the time, with the pendulum swinging too far towards youthfulness—intelligent, enthusiastic young men and women but lacking a wider perspective of life in the world beyond the universities.
The importance of maintaining a balance between youth and experience is self-evident. I illustrate my point briefly with a few figures. In 1981 the numbers of mature students placed on entry at the top of the trainee four point salary scale was 37 per cent. of the total. In 1982 that percentage had slipped to 29 per cent., and this, surely, must be a matter of some concern. To reduce the top trainee salary, albeit by only a small percentage—0·44 per cent.—is not exactly calculated to encourage the numbers of older students, those men and women in their thirties, and attract, let alone increase their numbers, people of the very highest calibre.
The next rung on the ladder, point three, amounted to 20 per cent. of the total entry in 1981. In 1982 it was 22 per cent. It is proposed to reduce the salary by 8 per cent., which merely reinforces my point. So, simply on numbers for the higher and more mature entries, I think it can be said that there is a reasonable balance between maturity and youth because, put together, the entries on the two higher rungs of the salary scale amounted to 57 per cent. in 1981, but that level had slipped to 51 per cent. in 1982. It is of great importance, both quality- and quantity-wise, not to allow it to slip any further.
I make two quick points in this connection. First, it is understandable that confidence in the service tends to be influenced in court by the age and maturity of the probation officer involved in the case. This can have implications for the sentence. Secondly, the readiness of volunteer members of the public to work with the probation service is again bound to be influenced by the factor of the age and maturity of the officers with whom they are working. I am stressing the importance I attach to the older and more mature student entry.
Like the noble Lord, Lord Wells-Pestell, and others, I also have concern for the trainees on the two lowest rungs of the trainee salary ladder—entries from the colleges and universities. In 1981 in aggregate those entering on these two lowest scales represented 43 per cent. of the total. In 1982 it was 49 per cent. The Home Office proposes to reduce the salaries by 23 per cent. at the lowest point of entry and 16 per cent. at the next entry point. Let us not forget that from these young entrants will come, for the large part, the senior probation managers of the future, the chief probation officers, deputy chiefs and the assistant chief probation
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officers. Therefore, quality at that level of entry is absolutely all-important.
I take the Home Office point about the need to reduce the present inequity in relation to other students following CQSW courses but without taking the probation option. However I think, as do others, that this is altogether too drastic a step. There are at present four points of entry on the salary scale for trainees and it has been suggested that the danger of discouraging entry of high calibre students from the colleges and universities at the lower end of the scale might be mitigated by reducing the number of entry points to three, eliminating the lowest rung on the ladder and making the lowest salary £4,116 instead of the proposed £3,588. This would still mean a reduction of about £450 from the present lowest student salary—that is, 10 per cent.—instead of the drastic reduction of 23 per cent. proposed by the Home Office. To do this would cost the Home Office a little more money but the all-important factor of the quality of the men and women in the probation service, to make it possible to shift the emphasis in future years to alternative treatment in the community, makes cheeseparing in this matter of the student entry salaries both shortsighted and inappropriate.
Finally, my questions to the Minister are these. Will he consider the suggestion of reducing the salary scale for a trainee probation officer from four to three points of entry, with the lowest salary on that presently applying to point three? Secondly, will he endorse the emphasis I have placed on maintaining the ratio and quality of more mature students, for the reasons I have given?
9.14 p.m.
Baroness Macleod of Borve: My Lords, after four weeks' absence from your Lordships' House because I was careless enough to trap a nerve in my back, I am unhappy that I should feel it vital to come here tonight and, in the light of my experience in the last 25 years of dealing with the probation service, speak in support of the noble Lord, Lord Wells-Pestell. I do not like speaking against the Government, and I certainly do not like speaking against the Minister, but I feel so strongly about this particular matter that I had to come here tonight.
We are discussing the salaries of one of the most important associations of officers in our society today. I say that with confidence after 25 years of experience—25 years mostly as chairman of a magistrates' court followed by four years on the Parole Board. In the magistrates' court—the lowest level of the judiciary—we dealt with a great number of people and it was our privilege to realise that if we put someone on probation he would be dealt with and looked after by people of the highest quality and the highest calibre, known well by each of us—people who would be able to put the person who had strayed off the path of law back on to that path again. In every case—and I cannot think of one where the probation staff let me or any other member of my 84-member bench down—we were able to rely on the guidance, the wisdom and the help of the probation staff. Indeed, that was so not only as regards the adult courts, because over 60 per cent. of the orders made on young

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people between the ages of 14 and 17 years are still supervised by probation officers.
As regards the Parole Board, the after-care that is so vitally necessary, as the noble Lord, Lord Hunt, has said, and so important to ex-prisoners, and which is supervised by qualified probation officers, is something for which, as we know, the prisoners themselves are grateful, and for which their parents are grateful. We as members of the Parole Board rely on those people to take care of the prisoners that we allow to go back into society.
We have recently spent a great deal of time discussing a new Criminal Justice Bill. As a result, a great many more highly-qualified and trained probation officers will be needed to implement it when it becomes an Act. I should like to ask my noble friend how many more probation officers will be in training to help to implement the Criminal Justice Act. We are told that at present about 300 people are on the intake for the probation service. We are also told that there is no shortage of people wanting and willing to come forward to be probation officers. But we must pay the rate for the job if we want dedicated and skilled people—people who care deeply and whose lives, I may say from my own experience, are changed when they become probation officers because they are working at all times of the day and night. The fact that there are so many people who still want to be probation officers is a great credit to the probation officer service.
As has already been pointed out, there are many older people who come forward with perhaps more experience of life in general than the 22-year olds. Those people are coming forward and they wish to be probation officers. Although we want quantity, we must have quality. I do not say that money speaks, but one has to live. The older people in the probation service very often have to keep their families; and the younger people do not want to be tied down by a very meagre salary.
The dedication and the long hours have to be paid for; the responsibility that society and the courts put upon the men and women who form the probation staff of our courts must be recognised by the Home Office. They are to be encouraged by the people who are administering justice in our courts. As one of those who do the administering, I say we could not possibly work our courts without their help. We rely on them implicitly; but their responsibility must be paid for. I have come here tonight specifically to urge the Minister to look at this again, because I cannot understand why this particular, vital part of our society has been treated in this way.
9.20 p.m.
Lord Allen of Abbeydale: My Lords, the number of speakers in the debate this evening is, I think, some indication itself of the importance which your Lordships attach to the probation service. Like other noble Lords, I am grateful to the noble Lord, Lord Wells-Pestell, for raising this issue tonight. I think that most of the relevant points have already been covered, and very well covered, in the speeches which have been made, but I thought that one brief contribution from the Cross-Benches might be in point, in part perhaps
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to demonstrate that the issues here go well outside party lines, if that needs saying after the speech of the noble Baroness.
However, I have grounds for concern going rather deeper than that. I was fortunate enough to have some relevant responsibility at a time when the service was undergoing a major reorganisation, and I was much concerned with the setting up of the establishment in the Cromwell Road to which the noble Lord, Lord Hunt has referred, for which we had such high hopes. I also recall that I was a little involved when the possibility was canvassed of the service going down the Scottish road of complete integration with the social services, a fate which I trust the service will continue to avoid.
The probation service gets its fair share of criticism and rather ill-considered and sometimes rather sneering comments, but, as it has now become, it is I think plain that, with the police and the prison services, it is already playing an essential part in tackling the problem of delinquency and all the complications that that involves, including the overcrowding of the prisons. The new duties that it has taken on in recent years are a further vital contribution to establishing in this country a concerted and coherent approach to these problems. I have in mind in particular the service's responsibilities in relation to parole and community service, and also its welfare responsibilities in the prisons. I am a little disappointed to find that the service itself seems to have some doubts about that particular activity.
There is more to come under new legislation, but if the service is to discharge the hopes placed in it, as has been said more than once this evening, it must attract suitable people. Whatever the feeling of commitment one looks for, pay is unfortunately something which cannot be ignored. I am sure that the noble Lord, Lord Wells-Pestell, will accept that there can obviously be no prospect of the probation service emulating the Olympian heights scaled by the police, who train their recruits after they have taken them on as police officers and who now pay them pretty handsomely. Nor, indeed, can the would-be probation officer hope during his long period of training to rival the remuneration of the prison officer during his much shorter period of training. All the same, the service must attract not only enough recruits but, as has been said before and will no doubt be said again, enough recruits of the right kind.
It is against that background that I should like to make three short points. The first is really to go along with the point that the noble Lord, Lord Hunt, emphasised, and that is the maintenance of the tradition that the service should be able to attract mature men and women with substantial experience in other walks of life—perhaps in industry; perhaps in voluntary social work; perhaps in the professions. The statistics which the noble Lord, Lord Hunt, gave us I found rather comforting as I personally had been under the subjective impression that the proportion of mature entrants taken in recent years was rather less than it used to be in the days when I had a more direct concern.
Be that as it may, as I understand it, it is not intended so to alter the scales of pay as to affect the

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conditions under which the older recruit can be taken in. However, it would be helpful if the Minister could confirm this and put on the record, if he feels able to do so, that the Government continue to attach great importance to maintaining an adequate proportion of new recruits with proven experience in other fields. I feel bound to add the comment that, although, as I understand it, there is no proposal for a major change in the scales of pay here, a salary of £5,500, or rather less, is not excessively attractive for a man in his 30s with a wife and family and mortgage commitments.
My second point is that I am under the impression that the responsible employers, the probation and after-care committees, do not at present seem to have very much to say in how the great majority of the students are selected for training before they are appointed to the service. I wonder whether it might not be desirable to try to devise some method, perhaps under the aegis of the negotiating machinery for pay and conditions, which would mean that appointment would no longer be left quite as much as it is to the schools and colleges which provide the academic training.
My third point is that I have not personally seen the correspondence to which reference has been made but I am well aware that there has been an abundance of applicants. I am also very conscious of the need for economy, although I note that we have gone as far as this in the debate without actually finding out how great the sums are which would be saved by the measures now proposed. It seems to me that, whatever statistical basis there may be for the cuts now contemplated, as the speeches have already shown, there is a real risk of action on these lines being interpreted as showing what the Government's attitude of mind is towards the service.
The fact that this action could be regarded as a kind of touchstone, as it were, is the main reason why so many noble Lords have put down their names to speak this evening and why some of the points legitimately raised in discussion have gone a little wide of the specific point raised in the Unstarred Question. There is a real danger that what is now being talked about could spread alarm and despondency at the very time that the Government need the goodwill of the service in developing their criminal justice plans.
Cuts in pay in this country are still a quite unusual phenomenon, and to single out this service could be regarded as a move calculated to discourage, rather than encourage, a service which should be bursting with growth and vitality in discharging its obligations to the courts, the prisons and the community. I wait with great interest to learn if the Minister can persuade us that, with all its risks, it is really worth while. I suspect from what we have heard so far that he may find it rather hard going.
9.31 p.m.
Baroness Ewart-Biggs: My Lords, I thank my noble friend Lord Wells-Pestell for raising this extremely important topic. When I looked at the list of speakers I realised that I should not be able to add anything to what would be said; I have no background in the probation service. Nevertheless, the very fact that I
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wanted to speak must prove that I, too, feel enormously seriously about this point. I also look forward greatly to hearing what the Minister has to say, though in view of the weight of opinion I am feeling rather sorry for him, fond though we are of him.
I wish to make three brief points. The first concerns what I consider to be an enormous inconsistency in the Government's attitude—and this was touched on by the noble Lord, Lord Allen. Indeed, I can think of no greater inconsistency on the part of the Government than, on the one hand, appearing to propogate a system which lays greater stress on the important role of probation officers while, at the same time, actually reducing the reward for those on whom this greater burden or responsibility will descend. Previous speakers have made that clear and one cannot say it often enough, because it looks as if the Government are trying to have it both ways. They appear to be committing themselves to shifting some of the weight from those responsible for custodial sentences to those responsible for probation and community service orders. What could be more contradictory than to move in that way—towards what many of us, I am happy to say, would regard as a more humane criminal justice system—while making the conditions less attractive for enticing the very people on whom the revised system will depend?
My second point concerns the importance of the service attracting the right kind of trainee, and much has been said about that. I cannot add anything to what has been said, but I feel I must speak of the need to achieve a broad-based entry, essential for working in the multi-coloured community that we are. I understand that the most likely way of enrolling coloured workers is through the ancillary grades. There must be general agreement about the need for tainee officers coming from the ethnic minorities, where they will be doing a great deal of their work. Many of these workers are married; they are the older trainees, with children to support. What possible prospect will there be of encouraging such moves by these workers if it means they have to accept, say, a considerable drop in salary?
My third point concerns the actual duties of a probation officer. It is important to spell out in categorical terms what the full measure of his responsibilities are, and consequently how much the community at large depends on having people of very high calibre brought into the service. The noble Baroness, Lady Macleod, referred to the essential after-care of prisoners, and I wish to state the different categories for whom probation officers are responsible.
First, the probation officer, assisted of course by the trainees, is responsible for the supervision of prisoners who are released before the end of their sentences under a parole system. Secondly, he is responsible during the unexpired half of the sentence for extended sentence prisoners released under a parole scheme or some other scheme. He is responsible for young prisoners, aged under 21 at the time of sentence, serving 18 months or more, who are released under a parole system or another system.
The probation officer is responsible for all borstal trainees during the two years after the date of their

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release, and he is responsible for all detention centre trainees during the 12 months after their release. Finally, he is also responsible for prisoners of under 21 years of age for 12 months after they have served sentences of less than 18 months. He is responsible for the after-care of all those categories of prisoners, and I believe that the sheer weight of his work emerges from those facts. Surely people who are able to undertake such extensive work should be brought in to help the Government with this new preventive aspect of the criminal justice system, in which we all very greatly support them.
I happened to be talking to a friend about this debate, and he said that the other day a probation officer told him that it was only very recently that his career had become respectable. Is it not possible that if we lower the reward for this vital, essential work, while the profession may remain respectable, the morale of the people in it might be seriously affected?
9.37 p.m.
Lord Donaldson of Kingsbridge: My Lords, like the noble Baroness, Lady Ewart-Biggs, I returned from dinner to take part in this debate not with any hope of adding arguments but with the intention of contributing a little abrasiveness, perhaps, to what I think has been an over-indulgent discussion of rather a monstrous, small, but very ugly event. Throughout the proceedings on the Criminal Justice Bill we were assured—and we asked about it again and again—that the Government appreciated the importance of the probation service, that they recognised that the probation service was the only defence that they had against the explosive dangers in their appalling prison situation, and that they understood the difficulties of getting the best people into the service. So I was absolutely astonished to read of this small, but monstrous, change that is being proposed. I believe it to be a bureaucratic idiosyncrasy. I do not believe that the Home Secretary, nor the noble Lord, Lord Elton, had anything at all to do with it. I think the noble Lord is stuck with it, and I am sorry for him; but I am not going to try to help him out of it because I think he ought to stick in it.
Nobody can pretend that if we pay less for something we shall get something that is better. Monetarists are also "Cobdenist" and "Brightist" to some extent, and they surely believe that the quality of what one gets depends on the price. It is only in relation to young trainees that the position is serious, because despite what my noble friend Lord Hunt said, a percentage of 0.44 does not represent a very serious change, whereas percentages of 23 and 16 do represent very serious changes. To suggest that it is reasonable to lower the price and to accept the inevitable result, which is to get less good trainees, seems to me absolutely incredible and against everything that the Government have been telling us during all the proceedings on the Criminal Justice Bill, and in fact over the last three or four years.
It is a very small item. We are told that we are taking in only 300 recruits a year in this way. I think that I should agree with the noble Baroness, Lady Macleod, who said that we ought to take in many more; but that is a separate point. Of those 300, how
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many will be on Grade 4, the lowest grade? Will it be 50, so that all this is about £50,000? Is that right? Can the noble Lord tell us what is the saving to the Treasury in this very disagreeable change? I should like to know the figure; but it seems to me that it is bound to be something under £100,000. Really, to treat the probation service in this way for a sum of that kind seems to be absolutely incredible.
I was very much disturbed by the reply—one which I did not see, but I gather that it was in a letter—that it was quite all right to do this because there was buoyant recruitment and no difficulty in getting applicants. This means that if you are an employer dealing with the unemployed, you should pay less than the unemployment pay, does it? What does it mean? It is a very odd and disagreeable statement and I do not think that we can pass it. I hope I am wrong in thinking that that is what the Government are saying. But, at second hand, that that is what it seems they said. I feel strongly that they should not have said that.
The noble Lord, Lord Elystan-Morgan, raised an interesting point. Why do they advertise if they have so many people? How much does that cost? It is very expensive to advertise in newspapers. This is the way the Government throw away money with one hand, even if it is a small sum, and try to save it at the expense of these innocent and harmless trainees.
There was a small point that I did not understand in the remarks by the noble Lord, Lord Allen of Abbeydale. He spoke as if my noble friend Lord Hunt had suggested that the number of older, more mature, recruits was not decreasing. In fact, Lord Hunt's figures showed that they are decreasing. I may have misunderstood the noble Lord, but the figures show that they are decreasing as a proportion of the whole.
Lord Allen of Abbeydale: My Lords, I said, or meant to say, that they were not decreasing as much as I had thought.
Lord Donaldson of Kingsbridge: My Lords, I will not say any more. I am very sorry for the noble Lord who has to answer this. I think it is very difficult and really quite impossible to put a proper face on it. It is such a petty affair and so very offensive to a body which we all enormously admire—having said which, I shall support, in principle with my political weight (which lessens as my physical weight grows) the spirit behind the noble Lord's Unstarred Question.
9.44 p.m.
Lord Foot: My Lords, Oscar Wilde once said, as I recall, that a man would need to have a heart of stone to be able to read the story of the death of Little Nell without laughing. In much the same sense, I would say to the House that one would need to have a heart of stone not to sympathise with the noble Lord who is going to reply to this debate. Indeed, at this late hour I do not want to try to contribute to the argument but I think the Unstarred Question which the noble Lord, Lord Wells-Pestell, has put raises another question; that is, whether what takes place in your Lordships' House and in the debates in this House really matter; because here tonight we have had a debate in which no single voice has been raised in support of the Govern-

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ment. Apart from the noble Baroness, Lady Macleod, the Benches opposite are empty. I must apologise to the noble Lord who is also sitting there. With the noble Baroness, he is the only exception. Not one voice has been raised in support of the Government. On the other hand, we have heard in this House tonight speeches coming from people with almost unique authority in fields of this kind, led by the noble Lord, Lord Wells-Pestell, himself probably the greatest authority upon the probation system in this country. He was followed by the noble Lords, Lord Wigoder and Lord Elystan-Morgan, both of them ornaments of the Bar, and with experience not only in the courts of this country but in the judicial function. Then we listened to the noble Lord, Lord Hunt, who must have an experience in penal matters second to none, followed by the noble Baroness, Lady Macleod, who is virtually the Magistrates' Association in person. Then we heard the noble Lord, Lord Allen of Abbeydale, with his unique experience in Whitehall. Then the noble Baroness, Lady Ewart-Biggs, said she was not an authority but went on to make a speech which shows that she is. Then we had the speech of the noble Lord, Lord Donaldson, who again has a unique experience
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in matters of penal reform. So we come down to me, and I have no authority at all.
Is it possible to ask the Minister, even at this late hour, not to get up in a minute and make a bland defence of the Government's position, but that he should acknowledge the weight of the authority which has been brought to bear in this debate upon this matter and the universal opinion that the Government have this wrong? Is it possible that the noble Lord can put aside the notes that he has in preparation to answer this debate, and say to the House that in view of the power and the force of the opinion which has been expressed in this House, he will take this matter away and that the Government will reconsider it after all? Is that not a reasonable response to expect in view of the course that this debate has taken?
I do not intend at this late hour to try and pursue the arguments in the matter. It is not only that, apart from the Minister, everybody who has spoken in this debate has taken an adverse view, but it is the fact that this is a matter which is fundamentally important to the administration of justice in this country. It is only right and proper that the Government and the Minister should take account of the very inmportant opinions that have been expressed.
9.48 p.m.
Lord Kagan: My Lords, I should like to make one point: the probation service needs people of the very highest calibre because the result of their work depends on the respect that they command in the prison service. As was said before, on occasions in the prison service they are not quite sure whether the probation service is a necessary or unnecessary intrusion. Surely the question of pay should be looked at in a different way. If one had a smaller number of probation officers but of a much higher calibre, they would co-opt from society suitable people to help them, as is happening experimentally now at Maidstone Prison. These are people who would be chosen because of their background. I have in mind retired school teachers, retired bank managers and people from the Churches. Indeed, the best training for the probation service is for someone to have been a parent, because most of us have gone through that period. The fact is that these people would not add to the financial burden. As far as I understand it, all they receive are just expenses for going. The noble Baroness, Lady Ewart-Biggs, said that the probation service has a responsibility. In my opinion, that responsibility should start not when a person leaves prison but when he enters it, and a relationship should be built up that is continuous; a link with society.
If one recruited from society people who help and if one person deals constantly with one prisoner from the day he goes to prison, who gets to know him and gains his confidence, perhaps helping him to get a job afterwards, that is a link which would be established (a) with society and (b) with his family; and it would cost the taxpayer very much less. In other words, I think that a very high calibre probation officer—perhaps fewer in number but people co-opted from society—should look after each prisoner on a continuous basis.
9.51 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, in rising, I should like first to acknowledge the lifelong interest of the noble Lord, Lord Wells-Pestell, in this subject. I would emphasise that I take everything he has said, and everything that others of your Lordships have said, very seriously and in good part.
The Question of the noble Lord, Lord Wells-Pestell, is addressed to a particular part of the probation service and to a particular policy aspect upon it. It is an important aspect, and his Question has given it a very proper prominence. He has also revealed, if I may say so, an obvious personal concern and insight which will be very welcome in the service itself. It is a good thing that work of such great social importance as that which is done by the probation service should be kept in view by your Lordships as a whole and not just by the Government. It does not get over-much publicity; it is not often praised; it is not even so widely understood as perhaps it deserves to be; and interest such as the noble Lord promotes must be beneficial to it.
That does not mean, of course, that I agree with everything he has said; and in some respects I think he
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is quite wrong. I shall now raise the solitary voice for which the noble Lord, Lord Foot, has been listening for so long, on behalf of the Government. At this point, I must say that we do share a basic premise, which is that the probation service makes an invaluable contribution to society by applying to the damaging influence of crime a constraining and compassionate authority which serves both to protect the innocent and on occasion to reform the criminal.
The noble Baroness, Lady Ewart-Biggs, has demonstrated to your Lordships the wide range of work done by the service, and the noble Lord, Lord Kagan, has explained their intimate importance to offenders. This is exceedingly important work. Many jobs can be done by the application only of particular skills. This job, by contrast, can be done only by the engagement of the whole personality. It is always exacting, often frustrating and never undemanding. It follows that the principal asset which anyone can bring to it is their whole personality. A suitable personality is the essential primary qualification. It can be rendered more effective by training, but training cannot supply it if it is wanting.
In all this, the probation service has much in common with my own old profession of teaching, and your Lordships will understand that I hold it, as do the Government, in very high regard. But that, the noble Lord, Lord Wells-Pestell, will say (and has said) is not borne out by the figures. Well, let us look at some of the figures. First, as to the overall size of the service, since we came into office in 1979 we have increased the number of probation officers by 429 to the present total of 5,600. That is an increase of 8 per cent. in probation officers; and at the same time there has been an increase of 30 per cent. in ancillary workers. These figures provide the context in which the matter to which the Question is addressed is set. That matter concerns potential recruits to the service and the way in which they are paid, not while they are in the service but while they are training.
The Home Office does not itself either recruit or employ probation officers. That is a function of probation committees. But the Home Office does pay a grant of 80 per cent. of the expenditure incurred by those committees. Moreover, to assist those committees, and as a measure of the importance of seeing that they have a sufficient number and range of trained applicants from which to select, the Home Office pays students intending to make the probation service their career. They do so while they are studying for the certificate of qualification in social work. This is made possible by the good offices of the Inner London Probation Committee, and I should like, in passing, to place on record our appreciation of their valuable help. These students are engaged on courses with a probation content validated by the Central Council for Education and Training in Social Work.
The number of them whose training is sponsored by the Home Office is determined each year by the rate at which existing officers are leaving the service, and the extent of any planned growth. Prior to 1970, the wastage rate was almost twice that of today and the demand for recruits was not matched by the number or quality of applicants. Accordingly, in 1970 the Home Secretary of the day introduced the present

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system. Instead of students being supported by grant, they were paid salaries which would be increased annually, broadly in step with those of serving probation officers.
I would not claim that this scheme alone has overcome past deficiencies; but there can be no doubt that the balance has changed to one where interest in training for the probation service is extremely buoyant—an evocative word to the noble Lord, Lord Donaldson, among others. Indeed, it exceeds present-day requirements by a very handsome margin. Although there has been continued growth in the total number of probation officers, the wastage rate of existing probation officers has fallen to barely 4 per cent. As a result, the number of probation students sponsored by the Home Office each year has fallen, also—to less than 300. Indeed, it has been a matter of concern to us that, even at the reduced rate, a number of students coming off courses have had to wait longer than we should have wished to obtain an appointment, though I am glad to say that a better balance is now being arrived at.
This reduction in the need to sponsor the training of students has meant, first, that the number of CQSW courses with a probation content validated by the Central Council for Education and Training in Social Work became out of proportion to our needs. This resulted in sponsorships being spread more thinly than was desirable. With only 300 places now needed or available, the idea of the noble Lord, Lord Wigoder—and I hope that he feels better tomorrow; it is normally a habit not to answer points raised by noble Lords who are not here at the end of the debate, but I feel that his excuse is so good and your Lordships' interest so keen that I should do so—of reducing entry further, in order to secure a higher standard, has implications for the viability of courses themselves.
Last year, after consultation with the probation service interests, the department joined the Central Council—if I may so call it, rather than going on with "for Education and Training in Social Work", because the acronym CCETSW is so inapposite—in a review of the distribution of its sponsorships. At that time, there were 74 courses at 57 institutions. As a result of this review, that was reduced to 41 courses at 31 institutions. This affords a modest degree of concentration, and that is to the general advantage of the students' training.
Secondly, the changed circumstances also caused us to question whether it was right to continue with the rather special salaried treatment of probation students. Home Office sponsored probation students in general were receiving their training in financial terms more favourable than those of other social work students who were grant-aided by the Department of Health and Social Security or by their local education authorities.
The question of supply and demand is relevant because the proof of the pudding is in the eating. Certainly there are differences in the way the Department of Health and Social Security treat different cases because they are need-related and up to the age of 25 are means-tested. But a respectable way of advertising a commodity is to provide a testimonial
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from the user. Therefore I should like to quote from a letter written in September of this year to the department from Somerset by an applicant for sponsorship, who said:
" I would much prefer Home Office sponsorship for two reasons".
The first does not concern this discussion.
"The second is financial. The difference between the two grants is approximately £3,000 a year. It would seem more appropriate that a younger candidate whose career is to be in social work should have the local education authority grant and that I. as a mature student committed to work in the probation service, should have the Home Office sponsorship".
I know that the noble Lord, Lord Hunt, will sympathise with that sentiment. I know also that the noble Lord, Lord Wells-Pestell, does not think that probation trainees should be regarded as students. I understand him, but I find it difficult to follow him. They study alongside other CQSW students, many of whom would be maintained by grant. Their periods of practical training, which in certain areas entitle them to an additional allowance, are not different in substance. Many other student groups—for example, medical students—are also required to participate in practical training.
Another consideration was the sheer weight of interest which these sponsorships aroused. There were a mere 300. As some of your Lordships have already mentioned, there were about 10,000 inquiries—roughly 33 inquiries for every available place. That may be regarded as a tenuous figure since it reflects only interest in a probation career and no more than that. The noble Lord, Lord Elystan-Morgan. said that what one wanted were the figures for commitment and that they ought to be at least five to one. Therefore I should add that the total number of firm applications for the 300 places was roughly 1,500, which is exactly five times the number of places available.
From the report of the central council clearing house on applications for CQSW courses in 1981, we also learn that probation was given as the choice of career in over 26 per cent. of all CQSW applications, although only 8 per cent. of the places received Home Office sponsorship. That is a measure, in three dimensions now, of the attractiveness of what was then being provided. In terms of supply and demand, therefore, it cannot be denied that things were heavily out of balance. Any special inducement to encourage students to embark on a career as a probation officer was no longer necessary. Moreover, the increasing cost of the service—your Lordships will remember that we had significantly increased its strength and therefore the cost of paying it—together with the absolute demands of our economic policy and the need to contain Government expenditure (from this Dispatch Box one has to do more than just nod to that, because it is of the stuff and reality of economic life) meant that we were looking in every field, not just in the field of the probation service, not just in the field of the Home Office but everywhere, for savings in unnecessary expenditure. Under those circumstances, the payment of a premium rate simply could not be justified.
Lord Donaldson of Kingsbridge: My Lords—
Lord Elton: The noble Lord has had his whack. I do not wish to be discourteous to him.
Lord Donaldson of Kingsbridge: If the noble Lord does not wish to give way, nobody can make him.
Lord Elton: The noble Lord has a very effective way of wringing my conscience. I shall give way.
Lord Donaldson of Kingsbridge: I am unable to follow the argument that because you have a lot of applications you are entitled to lower the price. If one advertises for the chairman of a national body, one quite often attracts thousands of applications; but one does not put down the price on that ground. I cannot follow the noble Lord's argument.
Lord Elton: My Lords, I am sorry that the noble Lord cannot follow the argument, because it is a fairly elementary one. Perhaps the noble Lord thinks it is too simplistic. The fact is that in the teeth of the most formidable difficulties, the Government are containing public expenditure in every aspect. As the noble Lord, Lord Wigoder, said earlier, in every debate people say that public expenditure should be contained, except in that area which is the subject of the debate. When one is running a department or bits of a department, every bit is put under the microscope for any suspicion of spending money that should not be spent. This was money that was more easily given up than money in other parts of the service, where there are people actually trained and serving.
We fully recognise the need to encourage applicants of acceptable quality to continue to come forward, and we know what importance the National Association of Probation Officers and other service organisations place on the present superannuation arrangements. We do not propose therefore to revert to the former system of student grants. We shall also continue to reimburse various travel and incidental expenses for the duration of the course; mostly two years. The present salary scale ranges from £4,551 to £5,529, with the starting point depending upon age and experience, the highest starting point being £5,283. Together with course fees, the cost to public funds for each student over the period of study is currently about £15,000.
The new salary scale for students starting in 1983 is £3,588, £4,116, £4,747 and £5,482, and the scale will be subject to review next year. There are four starting points, and to reduce them to three, as was suggested by the noble Lord, Lord Allen of Abbeydale, would also reduce the emphasis on maturity and experience, as well as the savings, and I am not tremendously attracted to that idea. These figures, taking account of the abolition of increments during training, represent reductions over the two-year period of study ranging from 23 per cent. at the bottom point of the scale to less than 0.5 per cent. at the top. They do not, as the noble Lord, Lord Elystan-Morgan, suggested—I expect in a slip of the tongue—amount to 23 per cent. overall; 23 per cent. is the very extreme reduction. At the bottom point of the scale proposed for 1983, I would say to the noble Lord, Lord Wells-Pestell, who did some alarming arithmetic as to what the money was worth, that after all deductions the daily rate for a five-day week works out at £10.70 and not, as he suggested, £6.
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If I may return to the overall picture, this gradation of reductions is important. It reflects the importance we attach—like the noble Lord, Lord Hunt—to attracting into the service mature students with experience of real life. I can confirm this attitude to the noble Lord, Lord Allen of Abbeydale. We also value what the noble Lord, Lord Wigoder, called "fresh-faced young students," but the mature students are among our most valuable recruits. They are also the people for whom reversion to student status can represent an extremely tough financial decision. I consider it proper that the reduction should be minimal in their case. It amounts to half a penny in the pound.
A further change is to break the previous link with pay increases for the probation service. We are dealing with students, and in future the link will be with grant payable to DHSS students. At the time of revision of the salary scale for 1983 this was increased by 4 per cent. In order that the net salary receipts for probation students should reflect that level of increase fairly, each point of the salary scale was uprated by 5.5 per cent. Quite by coincidence, that was the rate of increase applying to the bulk of main grade probation officers.
I make no silly claim that the figures I have given your Lordships represent a princely sum. They do not. But neither do I think, under the circumstances, they are totally unreasonable. In particular, I think they mark a shift in emphasis to the mature entrant, who, in common with the National Association of Probation Officers and the other service organisations, we believe to be among our most valuable recruits. The noble Lord, Lord Donaldson, guessed that this meant a saving of under £100,000. In fact it is two and a half times as much, a quarter of a million pounds. I do not think that, as a result of this change, we shall see a decline in the quality of recruits. Indeed, my officials are at present having discussions with chief probation officers whose staff participate with the universities and polytechnics in the selection procedures which a would-be applicant has to go through before an application may be made to the Home Office for sponsorship.
Lord Wells-Pestell: I am sorry to interrupt the noble Lord, but this is a point of information. How can he possibly save £250,000 when the reduction is going to be £1,000. It indicates that there are going to be 250 people on the lowest point. The noble Lord knows as well as I do that there will not be 250 people on the lowest point. They would have to be very young. How can you save £250,000? It cannot be done.
Lord Elton: My Lords, I will try and come back to that, if I may, because I mistrust my arithmetic at all times, but particularly when I am on my feet and speaking about something else.
The discussions I was referring to with the people who do the selection will be of interest to the noble Lord, Lord Allen of Abbeydale, as was his suggestion interesting to me. I think that, particularly with the emphasis we wish to give to mature students, the question of selection becomes one of increasing interest. But I can give no commitment other than to look at this. These discussions are about stiffening

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selection standards. The acid test must be not merely whether the applicant appears suitable for the training course, but whether he or she may confidently be regarded as suitable, with training, for a successful career as a probation officer, and, of course, whether he or she has the personality, which, as I said before, is the sine qua non of a successful probation officer.
I do realise that these changes may result in a significant reduction in the numbers of applicants for CQSW courses with a probation content, but some reduction we can well afford. To say, as the noble Lord, Lord Elystan-Morgan, does, that this places at grave risk the whole future of the service is really to exaggerate the case a little. In practical terms, I do not think it is a sound argument. In practical terms, I might say that if we were not to advertise the courses at all nobody would know that they existed and so there would not be any applications. The cost of advertising was halved this year, and the resultant recruits will enter the service in 1984–85.
Lord Elystan-Morgan: My Lords, may I ask—
Lord Elton: My Lords, I can answer the question, I think; it was £25,000.
Lord Elystan-Morgan: No, that was not the question, my Lords. I was merely going to ask the Minister for his comment on the fact that the number of applications in 1982 had fallen by 400 as compared with 1981 and 1980. So we are already on a downslide.
Lord Elton: My Lords, that may be. In fact I have undertaken to monitor the number of applicants and to keep the National Association of Probation Officers informed on what I find. I shall be quite happy to discuss with them what the findings are. I hope the noble Lord, Lord Wells-Pestell, will take that as an indication of my good intentions. I have other observations to make about the salary received. The department pays the employers' national insurance contributions and superannuation contributions of 12.2 per cent. and 11 per cent. respectively, and this adds to the savings achieved. I think I shall take those figures and work them out again, because I intend at the end of this debate to consider very carefully what has been said by your Lordships, and I will write to the noble Lord.
I have given close thought to the invitation which the noble Lord asked me to extend to him, if I may so put it, at the beginning of the debate. I am very chary
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of doing what he asked me to do because I think it would be to rouse false and illusory hopes in his bosom. On the other hand, the noble Lord will not mind my saying that he and I know each other very well, and I certainly often learn from my meetings with him. If I can avoid giving to your Lordships any idea that what I am holding out is a handful of pennies, or pounds, I am satisfied that the noble Lord and I do at least agree on what is being done and what are the consequences. If in that process he wishes to be supported by, let us say, two or three knowledgeable people, then, as somebody who knows him very well, I would not resist him coming to my door to tell me what he wants to tell me.
I hope I have put that in terms that will prevent your Lordships from rushing out with glad cries saying, "Government policy overturned", which your Lordships never expected to be in a position to do. What your Lordships can say is that this particular noble Lord is always willing to listen to wise heads when they wish to give him advice. He is not always in a position to take it.
I conclude by again thanking the noble Lord for precipitating what has been a most instructive evening—one which will do good to the probation service by making it realise that there are a lot of well-informed, experienced and senior people who are articulate, and with much experience of legislation, who regard their function, as I do, as one which is of crucial importance to what we are trying to do in our troubled society. They will be as grateful to him. as I am, for initiating this debate. I am going on, my Lords, because I know that the noble Lord wants to interrupt me and if I stop he will not be able to do so.
Lord Wells-Pestell: My Lords, I merely wanted to ask the noble Lord whether we can assume that either late tonight or first thing tomorrow morning the Secretary of State for the Home Department, Mr. Whitelaw, will be informed of what decision he has already made.
Lord Elton: My Lords, I am told that that is quite superfluous since he already knows, and knew a long time ago. I did not want to bring him into this. If the noble Lord will accept that, I shall nonetheless be happy to see him with two, or possibly three of his friends to discuss this matter further on the basis that I am not actually offering a concession, but I do want to hear more of what he has to say.
House adjourned at eighteen minutes past ten o'clock.

  NORTHERN IRELAND: POLICE AND PUBLIC LIAISON COMMITTEES
  NORTHERN IRELAND: POLICE AND PUBLIC LIAISON COMMITTEES
  THE ABORTION ACT: CONTRAVENTION STATISTICS
  THE ABORTION ACT: CONTRAVENTION STATISTICS
  ARAB/ISRAELI DISPUTE: MEETINGS WITH FOREIGN REPRESENTATIVES
  ARAB/ISRAELI DISPUTE: MEETINGS WITH FOREIGN REPRESENTATIVES