Sitting of 3 February 1982

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

    CUMBRIA BILL [Lords]
    Order for Second Reading read.
    To be read a Second time upon Tuesday 9 February.
    WESTERN ISLES ISLANDS COUNCIL (LOCH ROAG) ORDER
    CONFIRMATION BILL
    Read the Third time, and passed.

Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Middle East Peacekeeping Force
    Mr. Douglasasked the Lord Privy Seal if he will report progress on the setting up of the Middle East peacekeeping force.
    The Minhter of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): The United Kingdom, France, Italy and the Netherlands made clear in November their readiness to join in the Sinai multinational force and observers. We have recently confirmed this position to the Governments of Israel, Egypt and the United States of America. Discussions are now being held with the force's directorate-general on the detailed arrangements for the force.
    Mr. Douglas: Will the Minister give the House some detailed information on the recent response of the Israeli Government to the creation of the force? Do they clearly understand that the force has nothing whatsoever to do with the European initiative but is in direct line with the Camp David spirit and agreement?
    Mr. Hurd: The moves certainly follow and are part of the process laid down in the Egypt-Israeli peace treaty. There was, for a time, a question mark in the mind of the Israeli Government about this matter. It has now been sorted out and the plan is going ahead for a limited British contribution—probably a headquarters contingent of about 35 men.
    Mr. Cyril D. Townsend: My right hon. Friend has given us the background to the creation of the force. Would it not be more satisfactory in the long run if the United Nations were to accept responsibility for the peace-monitoring duties? Will the Government work patiently towards that end?
    Mr. Hurd: This possibility was explored by the partners to the arrangement before we were asked to contribute, but it did not appear possible at that time.
    Mr. Moyle: Will the right hon. Gentleman assure the House that the conditions laid down by his right hon. Friend when he made his announcement on 23 November, and the context in which those conditions were laid down for European participation in the force, have remained unchanged as a result of the discussions which have been pursued since 23 November?
    Mr. Hurd: Yes, Sir

    Scientific Attachés
    Mr. Dalyellasked the Lord Privy Seal how many scientific attaches are attached to British missions at present as compared with (a) 1972 and (b) 1977.
    Mr. Hurd: At present we have 11 officers overseas engaged in civil scientific and technological work. In 1972 we had 12 and in 1977 we had 10.
    Mr. Dalyell: Is it not a false economy to cut down?
    Mr. Hurd: The hon. Gentleman has beaten his record for brevity. I know that he is disappointed, in particular about the decision over the counsellor in Moscow. We have tried to make sure that the essential work is done there. It is difficult to sort out priorities within our limited resources, but we think that we have struck a fair balance.

    Namibia
    Mr. Deakinsasked the Lord Privy Seal if he will make a statement about progress of negotiations towards Namibian independence.
    The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): The Five have received replies from all concerned to their revised proposals for constitutional principles. Agreement has been secured on many points, but some items raised by the front-line States and SWAPO require further consideration before the next phase of the negotiations can be tackled. The Five's intention remains to begin implementation of the United Nations plan during 1982.
    Mr. Deakins: Does the Minister believe that it is helpful for any party in these negotiations to seek to impose artificial deadlines?
    Mr. Luce: It is right to keep to objectives. If we do not set objectives, it is difficult to get a move on in negotiations.
    Mr. Spicer: Does my hon. Friend believe that it is helpful, in having the elections, for the new Secretary-General of the United Nations to reaffirm that SWAPO is the sole legitimate representative of the Namibian people? How can other parties possibly enter elections under UN auspices and feel that they will get a fair crack of the whip?
    Mr. Luce: As my hon. Friend knows, the Government take the view that it is not for any other organisation or country to determine who are the representatives of the people of Namibia. It is for the people of Namibia to decide. I have noted the exchange of correspondence between the Secretary-General of the United Nations and the South African Foreign Minister, Mr. Botha. This

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    increases the attention that must be given to the supreme importance of working out in phase 2 the impartiality of the electoral process to the parties concerned.
    Mr. Clinton Davis: Does the Minister agree that there is some substance in the SWAPO assertion, backed by the front-line States, that the present revised proposals relating to electoral change are unnecessarily complex, having regard to the fact that we are dealing with an unsophisticated electorate composed of people who have been under the heel of an apartheid regime for several decades?
    Mr. Luce: The proposals on the electoral system are designed to be as fair as possible to all parties and all groups within Namibia. There has been a reaction from SWAPO and the front-line States on this point. We are trying to seek a way through. We hope that it will be possible before too long to break through in order to move on to phase 2.
    Mr. Nicholas Winterton: Does my hon. Friend agree that, in contradiction of the view expressed by the hon. Member for Hackney, Central (Mr. Davis), the political situation in Namibia is extremely complicated and not as simple as the hon. Gentleman would have us believe? Does he further agree that the impartiality of the United Nations is of the utmost importance if the United Nations is to carry any weight with the ethnic groups in that country? Is it right that the new secretary-general, in his statement to the Council for Namibia, should totally ignore the Democratic Turnhalle Alliance, which represents all ethnic groups within Namibia and has made such progress towards breaking down apartheid in Namibia and South-West Africa?
    Mr. Luce: I agree that the impartiality of the electoral process concerns all the parties. I have no doubt that when we reach phase 2—I hope this will be soon—there will be a great deal of discussion. It is important to assure the parties that the electoral process will be impartial.

    President Mubarak
    Mr. Neil Thorneasked the Lord Privy Seal when the Secretary of State for Foreign and Commonwealth Affairs expects next to meet President Mubarak of Egypt.
    Mr. Hurd: My right hon. Friend the Prime Minister has invited President Mubarak of Egypt to visit Britain on 6 and 7 February. My right hon. and noble Friend will be abroad at that time, but Foreign Office Ministers will take part in the talks.
    Mr. Thorne: When the meeting takes place, will my right hon. Friend persuade his right hon. and noble Friend that the only sensible course of action is through the Camp David accords in order to preserve the autonomy of the Palestinians?
    Mr. Hurd: My hon. Friend refers to preserving the autonomy. There is no autonomy at present. We have no desire to discourage the autonomy talks. Obviously, if we are discussing the future of the Palestinians, there will come a point when the Palestinians themselves have to be involved.

    Middle East
    Mr. Waltersasked the Lord Privy Seal if he will make a statement on progress towards a comprehensive settlement in the Middle East.
    Mr. Hurd: In recent weeks attention has concentrated on the continuing efforts of certain Arab Governments to agree a common negotiating stance and on the forthcoming Israeli withdrawal from Sinai in accordance with the Egypt-Israel peace treaty. We believe that steps towards a comprehensive settlement in the Middle East must include both recognition of the Palestinians' right to self-determination and recognition of Israel's right to live in peace. We and our European partners remain active in the search for progress to this end on the basis of the Venice declaration.
    Mr. Walters: I welcome the denunciation by the European Community of the illegal annexation by Israel of the Golan Heights and east Jerusalem and its definition of the annexation as null and void. Does my right hon. Friend agree that if there is to be progress towards a comprehensive peace settlement, the Palestinians must be fully involved and that this presupposes negotiations with the PLO as stated in the Venice declaration?
    Mr. Hurd: We stated at Venice, and still believe, that the PLO, because of the support that it receives in the occupied territories, will need to be associated with the negotiations.
    Mr. Russell Johnston: Do the Government maintain a continuing dialogue with Israel on these matters? Are the Government putting to Israel the great concern felt by many people about the extension of the settlements?
    Mr. Hurd: Yes, we maintain a dialogue with Israel. Indeed, my right hon. and noble Friend will visit Israel at the end of March. This will provide a further opportunity for discussions.
    Mr. Marlow: Does my right hon. Friend find it possible to visualise a comprehensive settlement of the problems of the Middle East short of the establishment of a fully independent Palestinian State?
    Mr. Hurd: We are not near that point. Neither the British Government nor the European Ten can impose a settlement. What we can do is to take the opportunities that occur to get the parties, including Israel, round a negotiating table. It is probably not helpful to foresee the end of the process before the process has really begun.
    Dr. M. S. Miller: Does the Minister recognise that, in conformity with and in the same manner as all other settlements that have been effected after a war, there can be no comprehensive settlement of the problem unless and until all the countries in the area are brought together in an atmosphere of negotiation? Does he agree that whatever is done must be recognised by all of them?
    Mr. Hurd: As a general principle, that is right. It is one reason why we thought that Crown Prince Fand's principles were a step forward in that direction.

    Mr. Steven Kitson
    Mr. Clinton Davisasked the Lord Privy Seal if he has made any representations to the South African

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    Government concerning the treatment of Mr. Steven Kitson by South African security forces while in detention; and if he will make a statement.
    Mr. Luce: As I informed the hon.. Member for Ogmore (Mr. Powell) on 22 January, the British embassy, on the instructions of my right hon. and noble Friend, drew the attention of the South African Government to Mr. Kitson's allegations of ill-treatment, expressed our concern and asked that the allegations be investigated. We received a reply from the South African Government yesterday, which is now being carefully examined.
    Mr. Davis: Will the Minister give the purport of the reply received from the South African Government? Will he take into account, when assessing the bona fides of the reply, what is currently happening in South Africa? There has been further intimidation, arrests of leading trade unionists—30 of them were arrested recently—detention without trial and all the other miserable apparatus of an evil apartheid regime?
    Mr. Luce: The South African Government's reply is fairly detailed, since the allegations made by Mr. Steven Kitson about his treatment were quite extensive. It will therefore take time for us to investigate and decide how best to deal with the matter. On the general point, as the hon. Gentleman probably knows, we have repeatedly made statements, incuding those made by our permanent representative at the United Nations and those made on behalf of the Ten in December, that we deplore bannings and detentions and believe that people imprisoned for political reasons should be freed.
    Mr. Alexander W. Lyon: How could the British consul in Johannesburg give an assurance to the press that Mr. Kitson had not been ill-treated when he knew that Mr. Kitson had been cross-examined for 24 hours with only two short breaks?
    Mr. Luce: Our first concern, when a situation like this develops, is to seek to do the best we can for the individual concerned. Our first priority was to do our best to obtain his release. That was our primary consideration. I am glad that within six days he had been released. Now we are looking at these serious allegations. I have explained what action we are taking.

    Poland
    Mr. Cyril D. Townsendasked the Lord Privy Seal if he will make a statement on Poland.
    Mr. William Hamiltonasked the Lord Privy Seal if he will made a statement on the situation in Poland, and the new initiatives now being considered by the North Atlantic Treaty Organisation allies to deal with the problem.
    Mr. Winnickasked the Lord Privy Seal if he will make a statement of Government policy in relation to the present situation in Poland.
    The Lord Privy Seal (Mr. Humphrey Atkins): Her Majesty's Government, together with their European Community partners and NATO allies, have condemned without reserve the massive violation of human and civil rights that has occurred in Poland. We have called upon the Polish leadership to live up to its declared intention to re-establish civil liberties and the process of reform.
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    Her Majesty's Government believe it is essential that there should be an active and concerted Western response. We and our allies are engaged in close consultations to coordinate specific measures to be adopted against Poland and the Soviet Union in accordance with the general position set out in the NATO declaration of 11 January. As soon as decisions are taken I shall inform the House of the details.
    Mr. Townsend: I am grateful to my right hon. Friend for his reply. Would it not be appropriate for the House to be treated to another full statement, in view of the great international importance of recent events in Poland? Do the Government agree with President Reagan's statement that human rights in Poland have been put back 30 years? Is my right hon. Friend of the view that, despite speculation to the contrary, there has been no real lifting of the military clampdown in Poland?
    Mr. Atkins: I have just made a statement in answer to my hon. Friend's question. As circumstances develop, and whenever necessary, I am prepared to come to the House to make another. I would not wish to quarrel with the President of the United States as to whether human rights have been put back 30 years or some other length of time. There is no doubt, as we have repeatedly made clear, that human rights are being seriously violated in Poland
    Several Hon. Members rose—
    Mr. Speaker: Order. I propose to call first those hon. Members whose questions are being answered.
    Mr. Hamilton: Does the Lord Privy Seal agree that although the whole House would accept and support his condemnation of the denial of civil rights in Poland. that stance would be far more credible if we and the United States did not apply double standards and if the British Government objected to and attacked equally strongly the denial of civil rights in countries such as El Salvador and Turkey? Was any useful purpose served by the Prime Minister appearing in a ridiculous Hollywood film? Was that done with the consent and approval of all our European allies?
    Mr. Atkins: As the hon. Gentleman knows, the Government deplore violations of human rights wherever they occur. We have repeatedly said that with, I thought, the support of the Opposition.
    Mr. Cryer: No. The Prime Minister denied that.
    Mr. Atkins: If the hon. Gentleman does not support us, that is all right. With regard to the programme, my right hon. Friend the Prime Minister was asked to give her views about Poland, and she did so.
    Mr. Winnick: Is the Lord Privy Seal aware that the plight of the Polish people under martial law and an oppressive Stalinist junta was not helped in any way by the production "Let Poland be Poland" and that in many ways it made a mockery of the tragedy in Poland? Does the right hon. Gentleman recognise that the United States President and the British Prime Minister would speak with far greater authority and credibility about Poland if they did not constantly act as defenders and apologists of vile, oppressive regimes throughout the world, particularly the present regime in El Salvador?
    Mr. Atkins: The hon. Gentleman's attack on the Government for supporting vile, oppressive regimes

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    throughout the world deserves no comment from me. The hon. Gentleman knows that it is nonsense. [HON. MEMBERS: "El Salvador".] He knows perfectly well the Government's position on Poland, about which I am answering questions. Whether the programme—which I did not see—shown in America a couple of days ago was helpful or not, the Western world should continue to condemn what is happening in Poland, to press the Polish Government to honour their undertakings and to consider what action it is appropriate to take. That is exactly what is happening.
    Mr. J. Enoch Powell: Do the Government not understand that if we pontificate upon the internal affairs of other nations we give them the moral right to pontificate upon ours, and that if we seek to interfere in their management of their own affairs we give them a colourable justification for seeking to interfere in ours? Is that really what the Government want?
    Mr. Atkins: If the right hon. Gentleman is suggesting that Her Majesty's Government should remain silent about what is happening in Poland, I can only say that I do not agree.
    Mr. Whitney: I commend my right hon. Friend's view that there should be a concerted Western response to the events in Poland and the actions of the Soviet Union and that it should be in terms of specific measures. Will he ensure that the West's agreement upon these specific measures is quickly forthcoming?
    Mr. Atkins: I agree with my hon. Friend. It is to this end that we have had, and are having even today, discussions with our allies about the most appropriate measures that we can take jointly. I cannot say whether we shall reach conclusions today, but I undertake that we shall press ahead as quickly as we can and that I shall keep the House informed of the conclusions.
    Mr. Healey: Has the Lord Privy Seal any information on reports that there may soon be a meeting between the Polish authorities and members of the Solidarity movement, including Mr. Lech Walesa? If those reports prove to be true, that will be an important step towards satisfying a condition that we all feel is necessary before providing new aid to the Polish Government.
    As the United States Administration have agreed to the payment of contributions that they were obligated to make to certain American banks which had made loans to Poland, is it now the British Government's policy to reschedule existing Polish debt?
    Mr. Atkins: The anwswer to the second of the right hon. Gentleman's questions is "No". We have agreed that the rescheduling of Polish debts should be left in abeyance, and that remains our position.
    As to his first question, I do not know whether reports that General Jaruzelski and Mr. Lech Walesa will meet are true, but I hope that they are. One of the conditions that we made for reviewing our position with regard to Poland was that there should be a renewed dialogue between the Polish Government, Solidarity and the Church.
    Sir John Biggs-Davison: In helping to relieve distress in Poland, is it not important that supplies should be sent through Church agencies rather than through the Polish Red Cross, which is clearly dominated by the dictatorship?
    Mr. Atkins: Yes. As my hon. Friend knows, the Community has decided to use the money set aside for
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    selling food to the Polish Government at a discount to provide humanitarian aid, including food aid. The channels through which it is sent are very important. We are declining to send it to the Polish Government. We believe that the Church can best ensure that the food and humanitarian assistance provided reach the right people. I note what my hon. Friend said about the Red Cross. We are, of course, in touch with the International Red Cross and with other voluntary organisations. The prime purpose is to ensure that the food goes to those who really need it.
    Mr. Christopher Price: Does the Lord Privy Seal accept that some people found it ironic that the Foreign Minister of Turkey should take part in the programme "Let Poland be Poland"? May we get the Government's policy straight? Are the Government against the suppression of trade unions in Poland but in favour of the suppression of trade unions in Turkey?
    Mr. Atkins: I am happy to say that I do not answer in the House for the activities of the Foreign Minister of Turkey. He must decide what he decides.
    The Government's position is perfectly plain, and I believe that it has the support of the majority of Members of the House. Indeed, I should have thought that it was supported by all hon. Members. We are against the kind of repressive activities, including the suppression of trade unions, which the world has seen happening in Poland since 13 December. We shall continue to maintain our opposition and use what efforts we can to ensure that the Polish Government return to the course upon which Poland was embarked before 13 December.

    Chile
    Mr. Flanneryasked the Lord Privy Seal if he will review the policy of Her Majesty's Government with regard to the sale of military equipment to Chile.
    Mr. Luce: No, Sir. Each application for the sale of military equipment to Chile is considered on its merits. As with other countries with an unsatisfactory human rights record, we withhold permission for the sale of items likely in our judgment to be used for internal repression.
    Mr. Flannery: Does the Minister agree that the laughter from the Opposition Benches shows that the Government in their answers on human liberty throughout the world have put themselves in an awful mess as it is clear that they speak with forked tongues, because they support liberty in one area but not in another? Does the hon. Gentleman accept that in Chile a brutal monetarist Government are suppressing the people, as are the Government of El Salvador? Does he agree that, although the British Government have raised their voice, for whatever reason, in so-called defence of the people of Poland, they have utterly failed to say one word about the misery of people in the Latin American orbit and have supported every brutal and terrible dictatorship all over the world, unless it happened to be in the Communist orbit?
    Mr. Luce: If the hon. Gentleman is prepared to look at these matters objectively—I am not sure that he is—he will know that I have already made it plain, with regard to the sale of arms, that we do not sell arms that are likely to be used for internal repression.
    On 3 December last year, at the United Nations Assembly, we strongly supported a resolution which condemned the abuse of human rights in Chile, and we

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    fully supported the resolution which enabled the special rapporteur on human rights in Chile to continue his work. That is something that we shall continue to support. We shall also continue to condemn any abuse of human rights in Chile.
    Mr. Flannery: That is not true.
    Mr. Farr: Is not my hon. Friend correct in this policy, especially as Her Majesty's Government confine sales in these delicate areas to military equipment alone? Will he bear in mind, in these considerations, the flagrant attitude of some arms exporting nations, such as the French, who have not our scruples and who will export any arms, military equipment or crowd control equipment to anywhere in the world?
    Mr. Luce: I shall bear my hon. Friend's points in mind. There is to be a general discussion at the United Nations about the use of conventional arms in the world. Britain fully supports the view that there should be a debate on this matter.
    Mr. Healey: Does the Minister accept that there is a contradiction between the view expressed a moment ago by his right hon. Friend about the Government's detestation of violations of human rights wherever they may occur and their justification for the interruption of normal commercial and financial relations with Poland being the violation of human rights there? At the same time, we are selling weapons of war to a country in which violations of human rights are at least as great and have been going on for much longer. How on earth can the Minister justify that contrast?
    Mr. Luce: We should look at each country on its merits. It is important to stress again that we do not sell equipment that is likely to be used for internal repression.
    It is singularly important for us to be as objective as possible. The position concerning human rights in Chile, bad though it is, is no worse than that in a great number of other countries. If the right hon. Gentleman is suggesting that we should cut off trade or other activities of one kind or another with Chile, he must accept that we should have to take similar action with other countries.

    Africa (Investment Protection Agreements)
    Mr. Brocklebank-Fowlerasked the Lord Privy Seal how many investment protection agreements have been concluded with countries in Africa.
    Mr. Hurd: Four such agreements have been signed with countries in Africa. Of these agreements, two—with Egypt and Lesotho—are in force and two—with Senegal and Sierra Leone—await ratification and/or the completion of constitutional procedures.
    Mr. Brocklebank-Fowler: In thanking the right hon. Gentleman for his reply, may I ask him whether he accepts the importance of private investment to the development of economies in the Third world, especially in the light of his Government's decision to cut the aid programme? Will he assure the House that the Government will renew their efforts to conclude more investment protection agreements with developing countries, in order that private flows of capital may play a more constructive part in the development of those countries?
    Mr. Hurd: The hon. Gentleman asked about Africa, but world-wide we have signed 16 of these agreements
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    since 1976, and 10 of them have been signed since the Government came into office. We have now approached most countries in Africa about the possibility of concluding such agreements with them. I agree that they are very important.
    Sir Peter Emery: Have any negotiations been carried on with Ghana? What is the present position concerning British investment in Ghana since the takeover of the Government by Mr. Rawlings?
    Mr. Hurd: I would need to look into that matter. I shall write to my hon. Friend about it.

    Egypt
    Mr. Stan Thorneasked the Lord Privy Seal whether any meetings are planned with Egyptian leaders.
    Mr. Hurd: As I said earlier, my right hon. Friend the Prime Minister has invited President Mubarak of Egypt to visit Britain on 6–7 February.
    Mr. Thorne: Will the Minister say whether this is a preliminary to a conference in which Britain takes an initiative on the Middle East, or is the position that we have lost any influence that we had in that area?
    Mr. Hurd: No, Sir. I should have thought that recent events have shown that we have a very clear influence. We want to keep in close touch with the Egyptian Government, who have a crucial part to play. Therefore, it is very good news that the President of Egypt is coming here this weekend.

    Zimbabwe
    Mr. Farrasked the Lord Privy Seal if he will make a statement on the forthcoming visit to Zimbabwe by the Secretary of State for Foreign and Commonwealth Affairs.
    Mr. Luce: My right hon. and noble Friend is much looking forward to his visit to Zimbabwe from 25 to 27 February at the invitation of the Zimbabwe Government.
    Mr. Farr: I thank my hon. Friend for that reply. Will the Foreign Secretary be having further discussions with the Government of Zimbabwe in relation to the African resettlement programme and the progress that it is making.. and on whether Britain can play an even greater role in financing that programme than it is playing today?
    Mr. Luce: I know that my right hon. and noble Friend will be looking forward to a discussion about the economic situation in Zimbabwe and how our own aid programme is going. As my hon. Friend—who takes a great interest in Zimbabwe—knows, the amount of money that we are giving through my right hon. Friend the Minister for Overseas Development for Land resettlement amounts to £30 million of British taxpayers' money. Only a small beginning has been made in the use of that money, but I understand that progress is now being made on the resettlement programme.
    Mr. Dobson: What will the Foreign Secretary be able to tell the Government of Zimbabwe about steps taken by the British Government to prevent the South African-backed guerrillas from blowing up railway lines in order to stop the export of Zimbabwe's maize surplus to those

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    surrounding black African States that are going short of food as a result of the deliberate actions of the South African Government?
    Mr. Luce: Clearly it is in the British Government's interest to see stability in Southern Africa and a sensible practical relationship between Zimbabwe and South Africa. In that connection I have noted—as no doubt the hon. Gentleman has—that the South African Government have decided to give back to the Zimbabwe Government a considerable number of locomotives, which will enable them to use their railway system to greater effect. I have also noticed that the South African Government have suggested that Zimbabwe might now like to renew the trade agreement between Zimbabwe and South Africa.
    Mr. Nicholas Winterton: Will my hon. Friend say whether the Foreign Secretary intends to raise with the Finance Minister and the Prime Minister of Zimbabwe the ability of those who have left Zimbabwe to withdraw their assets? Is he aware that there could well be a scheme whereby as much public investment from other countries was made into Zimbabwe as was withdrawn by those who have sought, for one reason or another, to leave the country, so that Zimbabwe would not be worse off by the withdrawal of those assets?
    Mr. Luce: I know that my hon. Friend, together with other hon. Members, has shown a great interest in and concern for the problem. We have expressed our concern to the Zimbabwe Government about the effect upon British citizens of certain foreign exchange controls, which have existed in one form or another in that country for a long time. I am sure that my right hon. and noble Friend will wish to discuss the general economic situation, which has a strong bearing on foreign exchange controls.
    Mr. Speaker: Mr. Healey—Mr. Bob Cryer.
    Mr. Cryer rose—
    Mr. Speaker: Order. I should like to make it clear to the House that I was not mistaking the hon. Member for Keighley (Mr. Cryer) for his right hon. Friend the Member for Leeds, East (Mr. Healey). I had misunderstood the look on the right hon. Gentleman's face.
    Mr. Cryer: We have a very united front today, by the way, Mr. Speaker.
    Will the Foreign Secretary, when he goes to Zimbabwe, be discussing the shortage of funds of the Zimbabwean Government for the provision of education for their students in Britain? Is the Minister aware that the Zimbabwean Government have had to withdraw Zimbabwean students from colleges of further and higher education and universities in Britain because of the shortage of funds? Would it not be reasonable to provide extra funds to help Zimbabwe to develop in the future?
    Mr. Luce: The question would be better directed to my right hon. Friend the Minister for Overseas Development, but the House might like to know that he, too, will be visiting Zimbabwe very shortly—just before my right hon. and noble Friend—and will have a chance to talk about the aid programme when he gets there.

    Poland
    Mr. Canavanasked the Lord Privy Seal what representations he has made about the situation in Poland; and if he will make a statement.
    Mr. Humphrey Atkins: I refer the hon. Member to the reply I gave a few moments ago to my hon. Friend the Member for Bexleyheath (Mr. Townsend).
    Mr. Canavan: I agree that we must organise the strongest possible international support in favour of free trade unionism and against the military dictatorship in Poland, but would it not be more effective if there were more consistency and less hypocrisy on the part of the British Government?
    In view of the Prime Minister's fine words on Reagan's recent comedy show to the effect that the human spirit will not live in chains, why have the Prime Minister and Reagan tried to chain the trade union movements in their own countries and collaborated with each other to prop up military dictatorships in places such as El Salvador and Chile?
    Mr. Atkins: The Government are being entirely consistent in their approach to Poland. We have condemned, and continued to condemn, the activities of the military regime there. We are concerting our efforts to discover the most appropriate and effective steps that we can take against it.
    Mr. Kenneth Carlisle: Is my right hon. Friend aware that many jobs in the United Kingdom depend upon trade with the Eastern bloc? Does he agree that before we embark upon any trade sanctions against Poland or Russia we should be certain, first, that Western security demands them and, secondly, that they will be effective?
    Mr. Atkins: That is why it is necessary that we should consult our allies about the most effective steps. We must also be sure that anything that we do does not damage us more than it damages the Russians.

  EUROPEAN COMMUNITY

    Foreign Policy
    Mr. Knoxasked the Lord Privy Seal if he will make a statement on progress towards a common European Economic Community foreign policy.
    Mr. Humphrey Atkins: The Ten continue to cooperate closely on all aspects of foreign policy. During the United Kingdom Presidency, Foreign Ministers agreed the London report on European political co-operation, which incorporates practical measures to improve the speed and efficiency of political co-operation.
    Mr. Knox: What progress has been made on the setting up of a permanent secretariat to the Council of Ministers? Does my right hon. Friend agree that such a secretariat would facilitate the development of Community foreign policies?
    Mr. Atkins: I agree with that. We have made progress and the first British official is already serving on the staff.
    Mr. Hooley: Does the Venice declaration still represent the consensus in Western Europe about the Middle East? What steps will the Western European countries take to bring the Palestine Liberation Organisation into the mainstream of negotiations?
    Mr. Atkins: The answer to the first part of my hon. Friend's question is "Yes". Secondly, we shall continue to urge on all parties in the Middle East the approach that has been outlined in the Venice declaration and try to bring those parties to accept the principles set out in it.

    European Asembly (President)
    Mr. Skinnerasked the Lord Privy Seal when he expects to meet the new President of the Assembly of the European Economic Community; and if he will make a statement.
    Mr. Hurd: My right hon. Friend has no plans at present for a meeting with the new President of the European Parliament, though a meeting at some future date is possible, but I expect he will meet him on some occasion before long.
    Mr. Skinner: Is the Minister aware that the Common Market and/or its Assembly cannot declare itself to be in favour of human rights in the Third world for as long as it refuses to concern itself with American interference in El Salvador? Will he call upon the President to condemn the recent allocation of $100 million by President Reagan to buy guns to stoke up the war atrocities in El Salvador—a war that has already resulted in over 30,000 casualties?
    Mr. Hurd: The hon. Gentleman has not studied the statement on El Salvador, put out by the Foreign Ministers of the Ten last year. If he had, he would not draw such violent conclusions about our policy.
    Mr. Dykes: Will my right hon. Friend suggest that the Belgian President of the Council of Ministers and the new President of the European Parliament should have a formal meeting to discuss how the Community can be taken forward with concerted policies, as it has become clear and self-evident that it cannot be left in the unreliable hands of the European Council?
    Mr. Hurd: I am sure the the new President, who is a lively and energetic person, will find an opportunity before long to make his views known on these subjects. However, we are not likely, in the foreseeable future, to have a fundamental change in the treaties. It will remain true that the basic decisions of the Community will be taken by the Council of Ministers.
    Mr. Russell Johnston: Given that Mr. Dankert is lively and vigorous, as the Minister said, will he ask him to use his good offices, as a Dutch Socialist, with the British Labour Party and perhaps lead it to a more reasonable approach to the European Community?
    Mr. Hurd: I have the impression that, increasingly, members of the European Socialist parties despair of the Labour Party in that respect.
    Mr. Squire: Will my right hon. Friend also ask the President to advise the hon. Member for Bolsover (Mr. Skinner) and his constituents of the real benefits that the mining industry has received from a whole range of EEC grants?
    Mr. Hurd: I notice that there is increasing confusion in the Labour Party on the subject and that it is now looking for some compromise formula to get it out of an impossible position.

    Principles and Policies
    Mr. Hardyasked the Lord Privy Seal if he will raise with Community Foreign Ministers the adverse effect upon United Kingdom interests of national arrangements in other member States that are not in accordance with the principles and policies of the Community.
    Mr. Humphrey Atkins: Ministers regularly raise such problems in the appropriate Community forum.
    Mr. Hardy: Is the Minister aware that in many ways, including the use of defensive bureaucratic arrangements, other member States seem much keener to protect their economies than do the Government? Is he aware of the effect upon our special steels industry of the use of subsidised cheap electricity? How does he propose to respond to such unfair practices? When will he take action about the promised additional steps to protect the French
    economy?
    Mr. Atkins: In both of the cases raised by the hon. Gentleman we have consistently drawn attentior to the need for stricter policing of national aids by the Community. The recent steps announced by France were raised at a meeting of the Foreign Affairs Council on 26
    January and are under study by the Commission.
    Mr. Jim Spicer: Does my right hon. Friend know about the flagrant disregard by the Danish Government of the agreement that was reached on herring fishing in the North Sea? Is he aware that the Danes have increased their fishing tenfold above the agreed allowance? Does the matter fall within his province and will it he raised at his level rather than at an agricultural level, because it is a
    Mr. Atkins: I agree that it is very important. It falls primarily to my right hon. Friend the Minister of Agriculture, Fisheries and Food to raise such matters, but if they affect the way in which the Community works, and if countries are disregarding the principles of Community operations, they can and will be discussed at the General Affairs Council.
    Mr. Guy Barnett: Other than making protests, are the Government prepared, if necessary, to take unilateral action where our interests are adversely affected by the action of other European States?
    Mr. Atkins: The Government wish to do two things; first, to forward the interests of the Community and, secondly, to protect the interests of Britain—
    Mr. J. Enoch Powell: Secondly?
    Mr. Atkins: We have consciously decided to join the Community. We are anxious to forward the interests of the Community and our interests as a member of it. I refer the hon. Member for Greenwich (Mr. Barnett) to what my right hon. Friend said yesterday about the benefits that accrue to Britain from membership of the Community. Our aim is to improve the operations of the Community and to make sure that it works in a way that does not damage Britain.

    United Kingdom Membership (Anniversary)
    Mr. Marlowasked the Lord Privy Seal whether he intends to take any steps to celebrate 10 years of United Kingdom membership of the European Economic Community on 1 January 1983.
    Mr. Humphrey Atkins: I am grateful to my hon. Friend for drawing the attention of the House to the fact that the United Kingdom will complete its first 10 years of membership of the European Community on 1 January 1983. No specific steps are envisaged by the Government for celebrating the event.
    Mr. Marlow: May I make a suggestion to my right hon. Friend? During the referendum campaign, the "Minister of Propaganda" sent round an unsolicited document to every household in the Land setting out the purported benefits of Community membership. To celebrate the tenth anniversary on 1 January 1983, will my right hon. Friend send out the facts to everyone, stating particularly that it has cost £1 million a day since we have been members of the Community, that we have had a £2 billion deficit in manufactures during the past four years, that it has cost us £500 million net on the balance of payments in cash terms and that we have been force-fed French food at over twice world market prices—or will we have more propaganda?
    Mr. Atkins: I cannot answer for the activities of the so-called "Minister of Propaganda" at the time of the referendum campaign. That was nothing to do with our party. I agree with my hon. Friend that it is important that people should understand properly, and he is among those who ought to do so. He ought to know, because he asked me a question about it in the House only a few days ago, that our membership of the European Community last year did not cost £1 million a day. Our adjusted contribution, following the arrangements made by my right hon. Friend the Prime Minister with the Community in 1980, came to £1 million a week.
    Mr. Marlow: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. Before I take the point of order, I remind the hon. Member for Northampton, North (Mr. Marlow) that if he is about to tell me that he wishes to raise the matter on the Adjournment he will stop any further supplementary questions from being called.
    Mr. Marlow: On a point of order, Mr. Speaker. My right hon. Friend should know that a Treasury answer said that membership cost £500 million last year.
    Mr. Leighton rose—
    Mr. Speaker: There cannot be a point of order about the passing of information. I call Mr. Reg Race.
    Mr. Leighton: I am Ron Leighton.
    Mr. Speaker: Order. I apologise to both hon. Members, but they are from the same stable. Mr. Ron Leighton.
    Mr. Leighton: I recognise that you have had difficulties today Mr. Speaker. Will the Lord Privy Seal accept that we are "celebrating" the tenth anniversary by having the worst ever relations with our European partners? Did he notice the report in The Times on Saturday by its Brussels correspondent, who said that after what he called the total collapse of the meeting of the Council of Foreign Ministers, the two peacemakers, Leo Tindemans and Gaston Thorn, who were asked to tour the capitals of the Common Market to seek an amicable agreement on reforms, agreed that there was no point in doing so, because the talks were doomed to failure?
    Mr. Atkins: I refute both points that the hon. Gentleman made. Relations between ourselves and our Community partners are good, even though we have our differences. We are all still seeking to achieve what the Heads of Government agreed we should seek to achieve. Secondly, the Presidents of the Council and the Commission are not doing as the hon. Gentleman
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    suggested. They are embarking on precisely the sort of discussions that they and we believe may lead to a solution.
    Mr. Eldon Griffiths: Will my right hon. Friend think again about the suggestion of my hon. Friend the Member for Northampton, North (Mr. Marlow)? Would it not be a good idea on the tenth anniversary of our membership to set out to the British public the immense benefits that our country has enjoyed from membership and to show how, provided we put our own house in order, there are great treasures still to be won?
    Mr. Atkins: I entirely agree with my hon. Friend. We do not need to wait until 1 January 1983 to do as he suggests. Ministers seek to do that all the time and we shall continue to do so. I was asked whether there should be a celebration on 1 January. I had to say, and I believe that I was right to do so, that we have no plans for that. We believe that it is more important to persuade the people of this country that the benefits are as my hon. Friend describes and to seek to persuade them that the right thing to do is to take advantage of the opportunities offered, rather than have a party.
    Mr. Guy Barnett: If, as the right hon. Gentleman suggests, all is sweetness and light in the relationships between the Government and the other nine members of the Community, why was the mission of Leo Tindemans and Gaston Thorn set up? Did it not follow the total collapse of negotiations over the budget and the agriculture policy?
    Mr. Atkins: I was asked about relations between ourselves and our Community partners. I answered, correctly, that relations are good and I went on to say that there are differences of view about how the problems identified by the Heads of Government should be solved. We are seeking to solve them.

    Budget
    Mr. Hal Millerasked the Lord Privy Seal what progress has been made towards agreement on the European Economic Community budget.
    Mr. Humphrey Atkins: There were further discussions on Community budget reform at the informal meeting of Foreign Ministers in Brussels on 25 January. Unfortunately, it did not prove possible to reach agreement, but it was agreed that the Presidents of the Council and of the Commission should sound out member States with a view to finding a solution. I shall be making a statement on the separate issue of the 1982 Community budget after questions.
    Mr. Miller: In the light of some of the questions from "little Englanders," does my right hon. Friend accept that there is a need constantly to put before the House and the public the advantages to be derived by Britain from remaining within the Community and continuing to contribute towards its strength, but that public acceptability of the case will depend largely on the settlement reached in relation to our financial contribution? Does he agree that until that is settled it would be premature to proceed with the 1982 budget?
    Mr. Atkins: I agree with my hon. Friend that the settlement of the future of the Community budget and our problem are matters that deeply concern everybody in this

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    country. That is why we are spending considerable time and effort i a seeking to persuade our European partners that a just and reasonable settlement should be reached. We have not yet reached agreement, but we are able to discuss the issues with our European partners without falling out or having the disagreements and rows that Labour Members constantly believe that we have—presumably because whenever they disagree with one another they have rows.
    Mr. McNamara: Is the right hon. Gentleman aware that on the question of the budget, as on other matters, we accept that the Government's priorities are as set out by the right hon. Gentleman in his initial reply to my hon. Friend the Member for Rother Valley (Mr. Hardy), when he said that the first priority was the Community's interest and that, only second, came the British national interest? Is the right hon. Gentleman aware that Hull, which once had more than 100 trawlers, now has fewer than 10, and also has more than 1,000 fishermen unemployed, empty fish houses and people out of work in the fishing and processing industries? All that has been caused by the failure of the Community either to achieve a proper common fisheries policy or to find ways of assisting regions that have been adversely affected by the policies of the Community. The first priority of any Community budget—
    Mr. Speaker: Order. I hope to call other hon. Members before the end of Question Time.
    Mr. Atkins: The advantages to this country of belonging to the Community are considerable, as I and other Ministers have repeatedly said, and we intend to go on saying it. We must seek to make the Community work better, because that will increase the advantages to us and other members. Therefore, that is what we are seeking to do the entire time. In relation to the points made by the hon. Gentleman about the budget and other matters, our objective is to make the Community work better.
    Mr. Michael Shaw: Does my right hon. Friend agree that it is necessary in the negotiations not just to seek a reduction in the agricultural fund, but to seek a wider basis for the regional and social funds?
    Mr. Atkins: We have consistently put forward that point of view and there is a wide measure of agreement
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    among Community members that the regional and social funds should be developed. We have been seeking agreement that the amount spent on the CAP, as a percentage of the total Community budget, should be gradually reduced.
    Mr. Speaker: Mr. Eric Heffer.
    Mr. Skinner: Here comes the statesman.
    Mr. Heffer: Will the Government on this occasion be genuinely serious about the future budget negotiations? We have had continual negotiations in the past, but no permanent settlement has been reached. It is estimated that the contribution will be about £1,400 million. May we know now—I press the right hon. Gentleman as I pressed him the other day—whether the Government are genuinely serious this time and will make a stand on behalf of the British people?
    Mr. Atkins: The figure that the hon. Gentleman used is the unadjusted contribution. He knows that that will be adjusted because of the stand that the Government took in 1980. The arrangements made in 1980 apply to 1981 and 1982. Therefore, in practice, that will not be our contribution. Our determination to solve the problem is as great as it was in 1980, and is a good deal stronger than anything that the hon. Gentleman's Government put up.
    Mr. Whitney: Does my right hon. Friend agree that the last question by the hon. Member for Liverpool, Walton (Mr. Heffer), and many other questions this afternoon, shows the illogicality of those who are persistently hostile to British membership of the Community, in that when there is agreement in the Community the Government are attacked for not maintaining British interests, but when the British Government maintain British interests Government critics exalt in what they allege to be disagreement and disarray among our Community partners?
    Mr. Atkins: Yes. I have never detected much logic in the Opposition's position.
    Mr. Speaker: Order. Before we go on to the statement I wish to apologise sincerely to the hon. Member for Newham, North-East (Mr. Leighton). I should not have passed a comment that was open to misinterpretation. That is the price of trying to be too clever in a hurry.

European Community Budget 1982
The Lord Privy Seal (Mr. Humphrey Atkins): With permission, I shall make a statement about the problem which has arisen because of the difference of view between the Council and the European Parliament on the adoption of the 1982 Community budget. When I reported to the House on 27 January about the meeting of the Council of Ministers on 26 January, I said that the Council had taken no final decisions on this matter. I can now report to the House that the Council has subsequently decided that it should institute proceedings before the European Court of Justice concerning this budget; that meanwhile member States will pay in full the sums resulting from the budget as adopted; and that the Council will open discussions with the Parliament and the Commission as soon as possible to resolve the problem.
We hope that these discussions will succeed. At the same time, we have to protect our legal position and ensure that, if an answer is not found by discussion, we shall have a ruling of the Court. By far the best way of doing this is through an action by the Council as a whole.
Some other member States were in fact willing to accept the budget as approved, and were reluctant to go to the Court. The Presidency therefore proposed, as a compromise, that the Council should take the matter to the -Court but that all members should pay their contributions on the basis of the budget as adopted. We accepted this.
Because, in our view, that part of the budget added by the Parliament after the second Budget Council on 24 November was not legally adopted, we cannot treat it, as we do the rest of the budget, as a direct charge on the Consolidated Fund on the basis of section 2(3) of the European Communities Act 1972. We shall, therefore, make a separate payment of our part of this extra sum—about£2.5 million a month. The authority of Parliament will be sought for this payment in a Supplementary Estimate for the current financial year and in a main Estimate for 1982–83. Meanwhile the payment will be met by means of repayable advances from the Contingencies Fund.
Once the issue has been resolved, preferably through discussions between the Community institutions, but, if not, through a judgment of the European Court, we shall know the amount which we are obliged to pay. We shall then either receive a repayment or be under a firm Community obligation to pay the full amount.
Mr. Eric S. Heffer: Is the right hon. Gentleman aware that it can be argued rightly that the European Assembly—and I call it an assembly—has exceeded its powers by interpreting the non-compulsory expenditure on a wider basis than is generally accepted by the Council of Ministers? Is the right hon. Gentleman aware that that is a matter of principle?
While it is true that the extra budget agreed by the Assembly, beyond what the Council has agreed, would marginally benefit Britain, certainly in relation to the regional and social funds, that is outweighed in other directions and therefore it is right to resist the decision. Is the right hon. Gentleman aware that we believe that the Assembly's decision should be resisted?
We understand why the Government are in some difficulty in not wanting to go to the European Court on their own, but we regret that the Government were unable to persuade fellow EEC members to withhold payment
306
until the Court had decided. Under the circumstances, is the right hon. Gentleman aware that we shall have to look very closely at the proposed payment and reserve our position? Possibly we shall want a debate on the whole question.
Mr. Atkins: I am grateful to the hon. Gentleman. I understand the position that he has outlined. Of course it will be possible to debate the matter when the Supplementary Estimate is laid before the House.
I agree that although in this case the amounts are not enormous, a matter of principle is involved. There could be far-reaching implications for the future unless the matter is settled. I agree that it would have been preferable if we had been able to persuade our Community partners to take part in a joint action by the Council and yet in the meantime withhold the extra payment. We believe that a joint approach by the Council would be more powerful than an individual approach by Britain. Therefore, we agreed to the course that I have outlined. I emphasise that it is of only a temporary nature. If the decision is that the Parliament acted illegally, the money will be repaid. That is guaranteed. If it acted legally there is a Community obligation which we would have had to fall in with in any case.
Mr. Jim Spicer: My right hon. Friend has made it clear that the problem is temporary. Can he give a rough estimate of how long it will be before the Court gives its opinion on the matter?
Mr. Atkins: No, Sir, I cannot. That is a matter not for the Government but for the European Court of Justice. Past experience shows that the European Court does not move all that quickly. Nevertheless, I hope that we can get the matter resolved by the summer.
Mr. Russell Johnston: Can the Minister remind the House on what items the European Parliament wished to increase Community expenditure? What was the British Government's view and was it reflected in the European Parliament by the speeches and votes of the members of the Conservative group there?
Mr. Atkins: As to the latter part of the question, the answer is "No, Sir." As to the former part of the question, we are having a dispute with the European Parliament about whether three of four items involve obligatory or non-obligatory expenditure. We believe that in those three of four areas they are obligatory and therefore that the European Parliament is acting incorrectly. This is a matter that can be resolved only by discussion between the Council and the Parliament or by the Court.
Mr. Douglas Jay: Can the Minister at least tell us what figure will be included in the United Kingdom budget estimates for 1982–83 as our total net contribution to the EEC budget in that period?
Mr. Atkins: I have explained that the amounts above those approved by the Council will be met by separate payment, for which we shall seek separate authority.
Mr. Michael Shaw: Is my right hon. Friend aware that the action that is being taken by the Council is considerably more robust than the action taken hitherto by the Council on similar occasions—for example, in 1979? Is he further aware that, although it is desirable to have a firm ruling on the state of the treaty, the amounts involved on this occasion were so small that

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in the view of many it would have been better to reach agreement now and to seek the conciliation that has been sought for several years by the European Parliament round the table?
Mr. Atkins: Yes, Sir. The council has resolved to engage in discussion with the Parliament in the hope of solving the matter by agreement. If agreement is not forthcoming, we shall still regard the matter of principle as important enough to place the whole matter before the European Court of Justice. I am glad to say that our partners agree with that. Therefore, that course is being pursued in parallel with a course of discussion and conciliation.
Mr. Nigel Spearing: Does the Lord Privy Seal recall that during the debates on the European Assembly Elections Bill, there were fears that the new Assembly would exert its power by extendng control over financial matters? Although those fears were pooh-poohed at the time, does the right hon. Gentleman agree that that is now happening?
Mr. Atkins: Yes, Sir. In certain respects the European Parliament has exceeded its powers and that is why we are placing the matter before the court.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call those hon. Members who have been standing in their places, but not others.
Mr. Anthony Nelson: Will not my right hon. Friend agree that at least in principle an important guideline for the Government should be the views of the European Parliament which, after all, is a directly elected body? [Interruption.] Is there not something of a paradox in the attitude of the Opposition who, while recognising that the views of that Assembly of Parliament would be of advantage to Britain, nevertheless allow other matters of principle to outweigh that judgment? Is that not a triumph of dogmatism over national interest?
Mr. Atkins: Yes, Sir, and not for the first time. I am certain that Members of the European Parliament, who are directly elected, seek to do what they believe to be in the interests of their constituents, but they are constrained—as we are not—by legislation. The Government believe that it has gone beyond what the legislation allows. That is why we are going to the court for a determination.
Mr. Guy Barnett rose—
Mr. Speaker: I shall call Front Bench Members after the Back-Benchers.
Mr. David Stoddart: Is the right hon. Gentleman aware that many hon. Members—perhaps most—resent attempts by the European Assembly to filch powers that properly belong to the Council of Ministers, whose members—including the right hon. Gentleman—are responsible to their national Parliaments? If the Assembly continues to try to usurp the powers of this House will he come forward with a European Assembly (Repeal) Bill and withdraw our delegation?
Mr. Atkins: No, Sir, I shall not do that. However, we shall ensure, as far as we can, that the European Parliament acts only within the constraints laid on it.
Mr. Albert McQuarrie: My right hon. Friend knows of British farming's serious
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concern about the failure to agree the 1982 budget. Will he give an assurance that in further budget discussions, there will be no revaluation of the green pound, which would be detrimental to Britain's farming industry, especially in the light of the variations between sterling and the deutschmark?
Mr. Atkins: The matters in dispute between the Council of Ministers and the European Parliament do not include agricultural issues. Therefore, that point does not arise under the procedures that I have outlined.
Mr. Bob Cryer: Is this not an example of lickspittle subordination to the Common Market? If legislation is needed for the supplementary payments, is it not illegal for the Government to make them in advance of legislation approved by the House? Is there not a marked contrast between the way in which the Government are apparently prepared to go to any lengths to meet the supplementary payments, and their attitude towards local councils which want to make a supplementary payment to maintain decent services that are crucial to the people of those local authority areas? The Government then produce anti-local government legislation.
Mr. Atkins: No, Sir. There is nothing illegal in what the Government propose. In the first instance, the money will be found from the Contingencies Fund by a repayable advance and parliamentary authority will be sought in the manner that I have described.
By this agreement we have ensured that the whole council—all member Governments—are joining together in an action before the European Court where the legality of the European Parliament's decision can be tested.
Mr. Robin Squire: Does my right hon. Friend consider that a factor in some of our colleagues' attitudes to budgetary payments is Britain's outstanding financial success in the past year on payments to the EEC, which have been less than half of 1 per cent. of total expenditure.
Mr. Atkins: Yes, Sir. There is no doubt that that fact rankles considerably on the Benches opposite.
Mr. Dennis Skinner: Following the remarks of my hon. Friend the Member for Keighley (Mr. Cryer), is it not a scandal that while the Government tell local authorities to slash spending on education, the mentally handicapped, social services for the old, and to force up council house rents for 5 million tenants, local authorities that suggest that they should spend a bit more money to look after them are told by the Government arid the Secretary of State for the Environment that they cannot spend it? Yet, when it is the Common Market, the Government can say "It is only a few extra million quid" in their retrospective legislation. I can tell my right hon. Friend—
Mr. Speaker: Order. I propose that the hon. Gentleman tells him afterwards.
Mr. Atkins: Once again, it is clear that the hon. Gentleman has not been listening, because the payments do not involve any extra expenditure for the Government. They are interim payments which we shall either find we are obliged to make or, alternatively, that we wi.1 have repaid. That is a different matter from the hon.

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Gentleman's description. It will be determined whether we are legally obliged to pay or not. If we are not, we shall get the money back.
Mr. Tony Marlow: Will my right hon. Friend take this opportunity to clarify to the few remaining Euro-fanatics the fact that the British people have but one Parliament and that that is this House, and make it plain that the claret-swilling travelling circus on the other side of the Channel, which has no legislative powers, is purely an Assembly and that he does not intend that it should become anything more than that.
Mr. Atkins: Nevertheless, it is an Assembly with certain powers and we are discussing whether it has exceeded them.
Mr. Thomas Torney: In the Minister's negotiations on the Budget, has he taken cognisance of the discrepancies reported by the court of auditors of the EEC about some millions of pounds in the Common Market Commission? Further, has he taken into account the £10 million fraud, from the findings of the same auditors, by European farmers using loopholes in EEC regulations? What will the Government do about that and will they take it into account when there are any further discussions on the Budget, in the European Court, or whatever?
Mr. Atkins: Yes, Sir. Of course these matters will be taken into account and we shall ensure that financial probity is observed, but I am not talking about that matter now. The proceedings I have described to the House relate to a dispute between the European Parliament and the Council of Ministers. That matter is before us and I have described what we shall do on that front. I should be happy to answer questions raised by the hon. Gentleman at another time.
Mr. Alex Pollock: Following the answer given to my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie), is the Minister aware that the reported remarks of my noble Friend the Secretary of State for Foreign and Commonwealth Affairs, to the effect that he is prepared to block CAP decisions until the overall contribution from Britain is resolved, have caused great concern to the farmers in my constituency? Is the right hon. Gentleman aware that any further delay in announcing the European agricultural price review can only cause great financial hardship in those quarters?
Mr. Atkins: I note what my hon. Friend says, but it does not arise out of my statement.
Mr. Guy Barnett: As it is clear that it is the Government's view that that part of the budget which was added by the Assembly was not legally adopted and, therefore, does not fall within moneys which can be taken from the Consolidated Fund under the European Communities Act which requires the authority of this House, what action will the Government take if this House refuses to give that authority?
Mr. Atkins: Then we shall have to reduce our payments, but we shall have to see what the House does.

Railways (Industrial Action)
Mr. Speaker: There is an application under Standing Order No. 9. I call the hon. Member for Nuneaton (Mr. Huckfield)—
Mr. Tristan Garel-Jones: On a point of order, Mr. Speaker. Further to the point of order raised on 26 January by my hon. Friend the Member for Preston, North (Mr. Atkins), about the possible conflict of interest as a result of the links of the hon. Member for Nuneaton (Mr. Huckfield) with ASLEF and the Transport and General Workers Union, I seek your guidance about another possible conflict of interest. Should hon. Members refer to him as the hon. Member for Nuneaton or as the hon. Member for Wigan? I appreciate that Nuneaton's gain will certainly be Wigan's loss, but—
Mr. Speaker: Order. That is not a fair point of order.
Mr. Les Huckfield: 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 failure of the British Railways Board to honour its agreement to pay all railwaymen a 3 per cent. increase from January and the consequences for industry and the travelling public."
I am extremely mindful, Mr. Speaker, of your remarks last week, but there have been some important developments since then. The matter is specific, because the dispute has already been referred to two sets of arbitration—the first last July, and the second last August—and both judgments have either been rejected or overturned by the British Railways Board. We are now told that the parties involved should accept a third form of inquiry.
The matter is urgent because, although an inquiry may be about to be set in motion, it will probably be inconclusive, not only because ASLEF has said that it will not attend it but because only yesterday the British Railways Board said that the inquiry and ACAS were no solution to the problem. Since I last made an application to move the Adjournment of the House under Standing Order No. 9, there has been a specific occurrence. ASLEF has changed the days on which it intends to take strike action and that will obviously have a different, and perhaps more intensified effect on the railways. There is a strong feeling that the British Railways Board may retaliate tomorrow by closing, or threatening to close, the whole railway system.
I am sure that you will appreciate, Mr. Speaker, that those are serious and important developments. In addition, the effects of the strike are worse that they were, and it has been forecast that the board has lost about £100 million of revenue. The first day of action was 13 January. We are now in the fourth week of a major national dispute, and the time is long overdue for the House to have an opportunity to voice its opinion about it.
Many of us believe that the Government are responsible, in no small measure, for the dispute, and that this is the first example of the Government's new policy towards the trade union movement. However, I shall not discuss the merits of that now. Many of us are also concerned because the Secretary of State for Transport has voiced his opinion and has intervened in the dispute. However, he has done so outside the House. If the

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Secretary of State for Transport intends to stand on the sidelines, outside the House, and to make inflammatory and misguided statements, many of us would submit that he should make those same inflammatory and misguided statements to the House, so that we may ask him questions and put our views.
If the British Railways Board decides tomorrow to close the railway system, many of us will hold the Government entirely responsible. For that reason, I make this application. The House should be given the chance to make its view clear.
Mr. Speaker: The hon. Member for Nuneaton (Mr. Huckfield) gave me notice before 12 noon today that he might 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 believes should have urgent consideration, namely,
"the failure of the British Railways Board to honour its agreement to pay all railwaymen a 3 per cent. increase from January and the consequences for industry and the travelling public."
The hon. Gentleman has introduced factors that have developed since he last made an application under Standing Order No. 9. He has also entered into the realm of speculation but, as he knows, I cannot join him in speculating about the future. The House is aware that it has the power, by other means, to discuss the issue if it feels that that must be done. I have only the limited power to decide whether the subject is to be debated tonight or tomorrow. That is the only power that the House has given me. However, hon. Members know well that there are other means by which this important matter can be discussed.
I listened to the hon. Gentleman's representations. However, the House has instructed me to give no reason for my decision. I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Electoral Registration Communications
3.55 pm
Dr. Edmund Marshall: 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 Government's decision to discontinue the use of official envelopes, franked 'On Her Majesty's Service', for the purposes of electoral registration and absent voting applications, with effect from 15 February 1982."
That specific decision came to my notice only recently in correspondence, although I now understand that it was taken some months ago. As far as I have been able to discover, there has been no parliamentary statement or other public announcement about this specific matter, as distinct from more general policy on official paid items of postage. The absence of any public announcement about electoral registration communications is surprising, in view of the implications for the democratic rights of many of our constituents.
All hon. Members are aware of the importance of the process of electoral registration and of electors' applications to become absent voters. The political sensitivity over who pays for the postage on comrnunications to electoral registration officers requires that all hon. Members should have an opportunity to hear what a Minister has to say about the proposed changes. As the decision involves discontinuing the use of official paid envelopes marked "On Her Majesty's Service", it must involve Her Majesty's Ministers in some administrative responsibility, if only in terms of finance.
It is not sufficient for the Government to say that, in future, electoral registration officers will be able to provide their own reply-paid envelopes. I understand that there is to be no obligation on the officers to do so and, in the present financial climate of local government, the money may not be available for that purpose. Therefore, those wishing to send official communications to electoral registration officers may have to pay their own postage.
The House needs to know what the Government intend to do about this matter. What I have said demonstrates how urgent and important is the subject. The new arrangements are planned to come into effect on 15 February, 12 days from now. The next opportunity for oral questions to the Home Secretary does not arise until 18 February. Nor would it be satisfactory for this important matter to be considered in a late-night Adjournment debate.
For all those reasons I respectfully ask that you, Mr. Speaker, agree to a debate on this subject being given precedence over the other Orders of the Day.
Mr. Speaker: The hon. Member for Goole (Dr. Marshall) gave me notice before 12 noon today that he would seek leave to move the Adjournment of the House to discuss an important and specific matter that he thinks should have urgent consideration, namely,
"the Government's decision to discontinue the use of official envelopes, franked 'On Her Majesty's Service', for the purposes of electoral registration and absent voting applications, with effect from 15 February 1982."
I listened carefully to the important statement made by the hon. Gentleman. The House has always shown deep concern about matters affecting the election of people,

313
either to local government or to this House. The House has instructed me to take account of the several factors but to give no reason for my decision. I listened with great care to what the hon. Gentleman said but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

European Communities Act 1972 (Repeal)
4.2 pm
Mr. Dennis Canavan: I beg to move,
That leave be given to bring in a Bill to provide for the United Kingdom to leave the European Economic Community by repealing the European Communities Act 1972; and for related matters.
After the pathetic statement by the Lord Privy Seal today, the Bill could not be more timely. I know that there are planted questions, but I assure the House that this is not a planted Bill. My reasons for bringing it forward are based not merely on that pathetic statement by the Lord Privy Seal but on the damage done to Britain by membership of the Community over the past decade.
Many people, even some of those who are ardent proMarketeers a decade ago, are beginning to realise that the prophecies that many of us made have come to pass. Membership of the Common Market has been an unmitigated disaster in terms of jobs, prices, trade, industry, agriculture, fisheries, food, our economy, and virtually any criteria that we apply.
In 1973, the first year of membership, average unemployment in the Unitėd Kingdom was 575,000. It is now three million—an increase of over 400 per cent. I do not suggest that the Common Market is solely responsible for that massive increase. Probably the Tory Government are the biggest single cause. Nevertheless, the Common Market has significantly worsened, rather than improved, matters.
The Treaty of Rome is a charter enabling multinational companies to shift their investments out of this country and, therefore, shift jobs out of the country and throw thousands of people on to the dole queue, with no thought of the social and economic havoc created. That has happened in Scotland with multinational companies such as Talbot and Massey-Ferguson.
Less than a decade ago, the Euro-fanatics were telling us that membership would mean jobs for the boys. What jobs? What boys? Perhaps there have been jobs for a few overpaid Members of the European Parliament, or Euro-fanatics and carpetbaggers like Roy Jenkins, who picked up over a quarter of a million pounds from his job with the Common Market and who is now trying to "con" the people of Hillhead into voting for him by saying that unless they support him and the Common Market unemployment will double. The people of Scotland will see through that nonsense.
The 1972 Act reduces our ability to adopt and implement an interventionist economic strategy, and particularly a interventionist industrial strategy. But it is odd that the people who dreamt up all this were not even consistent. We have the common agricultural policy, which is interventionist in such a way as to increase prices instead of keeping them down.
The Common Market intervenes in such a way that there are millions of tonnes of food in the Common Market going to waste while the rate of inflation in food prices in this country since we joined the Community has been 254 per cent. There is no economic, social or moral justification for tolerating such an agricultural policy.
Over the past five years our total net contribution to the Common Market budget has been over £3,000 million, yet

315
we are one of the poorest members of the Common Market. It is a little like Robin Hood in reverse. Promarketeers such as the hon. Member for Flint, West (Sir A. Meyer), who wish to oppose my Bill, say that we have received assistance from the regional or social fund of the EEC. When we consider our net contribution, to be grateful for the regional or social fund of the EEC is like a man who has been mugged for every penny he has saying "Thank you" to the mugger for throwing a few pence back to him.
Despite the coyness of the Lord Privy Seal at the Dispatch Box a few moments ago, reports are coming from Whitehall that the official forecast for our net budget contribution in 1982 is £1,400 million, which is over £25 for every man, woman and child. We will then be the biggest—not just one of the biggest—net contributor to the EEC.
Today's ludicrous ministerial statement would not have been necessary if my Bill had been on the statute book. The Lord Privy Seal proposes to dole out more money to the EEC bureaucrats. We can see the mess that we are in. If my Bill were on the statute book, the Government would be let off the hook and they would be saved a great deal of embarrassment. That is why I hope that even the Foreign Office supports me.
Last week the negotiations in Brussels about a reduction in Britain's contribution to the budget broke down. The French Foreign Secretary, M. Claude Cheysson, is reported to have told Lord Carrington that he had better pay up or leave the Common Market. We cannot afford to submit to such blackmail. That is why we should get out now.
When we leave the Common Market we shall not be turning or hacks on the world or Europe, because the Common Market is not Europe. By world standards the Common Market is a fairly narrow protectionist bloc, consisting of a minority of nations and peoples of Europe and a smaller minority of the peoples of the world.
I remind people who say that we would suffer trade disadvantages if we left the Common Market that our non-oil deficit for the three months ending November last year amounted to £1,390 million. I would not be in favour of Britain lapsing into a siege economy. Common Market countries would still want to negotiate access to our markets and in return we would want to negotiate access to their markets. In case people believe that we have nothing to offer, I remind the House that we have more fossil fuel reserves than the rest of the Common Market put together. We could use that as a valuable trading card.
Leaving the Common Market would give us the opportunity to re-establish trading and other links with our former partners in the European Free Trade Association and our fellow members of the Commonwealth. We would retain the opportunity to participate in other international forums such as the Council of Europe, OECD, the Commonwealth and the United Nations. If we threw off the shackles of Brussels bureaucracy once and for all we would not diminish but enhance our opportunities to build up wider and better international relations with the rest of the world. Therefore, I ask the House to support my Bill.
4.10 pm
Sir Anthony Meyer: The hon. Member for West Stirlingshire (Mr. Canavan) says that membership of the European Community has made things worse for this country. It is true, and no one will deny it,
316
that the Community is not working particularly well at present. It is also true that over a long period this country has suffered a long decline. However, to say that our troubles are due to membership of the European Community has as much intellectual respectability as to say that they are due to Commonwealth immigration. Both arguments are completely untrue and equally squalid.
What is the argument against our membership of the Community? Is it the common agricultural policy? With all its faults, it has kept agriculture prosperous, and it has assured supplies of food for people in this country, even at times of world shortage, at prices that are rising less fast than the general level of inflation.
Is it our contribution to the budget? Even before my right hon. Friend negotiated a better settlement, and even if she fails to get a satisfactory settlement next time, the total of our contribution to the Community budget was ½p in the pound of public expenditure. For the record, last year it was one-twentieth of a penny in the pound of public expenditure.
Is it the size of the swollen Brussels bureaucracy, all 11,000 of them, and nearly half of them translators? It is smaller than the Scottish Office, and smaller than Lambeth borough council.
Or is it perhaps that the Common Market is selling more to us than we are selling to it? The Common Market is our largest trading partner by a long way. In terms of our total trade in manufactures, our deficit with the EEC is one-third of our deficit with the United States and one-twelfth of our deficit with Japan.
Or is it perhaps that membership of the European Community would limit the ability of a future Labour Government—frankly, no right hon. or hon. Member believes that there will ever be another Labour Government, but assuming that there were a future Labour Government—to pursue Socialist policies? Perhaps the name of President Mitterand has not been heard in West Stirlingshire.
It is not my task to argue the case for the EEC. I make only one observation. If we are to find capital investment for the jobs that we desperately need—and find that capital without intolerable sacrifices of current living standards—the only hope is a massive flow of inward investment. Does anyone seriously argue that United States, Japanese or even Arab investors are more likely to come here if they cannot use this country as a base from which to sell their goods and services to the Community? The figures are there to prove it.
Before the Common Market was formed, this country took 50 per cent. of United States overseas investment. The Common Market was then formed, and we were outside it. The figure fell to 10 per cent. Now that we are in the Common Market, the figure is up—over 40 per cent. again. That means a great many jobs.
I do not need to argue the case for membership of the EEC. It is not enough for the hon. Gentleman to prove, even if he could, that we would be better off outside it. He has to prove something very different and much more difficult—that we should gain by wrenching ourselves out of it, and to do so in violation of a treaty which was signed 10 years ago by a Conservative Government, after successive Governments—Socialist, Conservative, Socialist—had tried to get into the EEC over a period of eight years, and which was submitted in a referendum to all the people. The people had the chance to vote on the one issue, and they approved it by an overwhelming

317
majority. If, after all that, we were to pull out, who would ever take us seriously again? Who would ever enter into any binding commitment with a people who were so lacking in any fixity of purpose? After one of the most thorough national debates in our history, we decided to join the EEC. We have been full members for 10 years. It is time to grow up. It is time to cease hankering for a past that is gone for ever, stop dreaming impossible dreams, and end this futile argument.
I ask the House to listen not to the hon. Member for West Stirlingshire, but to wiser words that were spoken immediately after the people had given their verdict by referendum. I quote:
"I have just been in receipt of a very big message from the British people. I have received it loud and clear. I have always said the referendum would be binding. There can be no going back".
Those were the words, reported on 7 June 1975, of the right hon. Member for Bristol, South-East (Mr. Benn). I ask the House to take them to heart. I ask my right hon. and hon. Friends, the Liberal and Social Democratic Parties, who have not wavered in their support of Europe, and hon. Members of the Labour Party, who know perfectly well that the hon. Member for West Stirlingshire is talking nonsense, to support me in the "No" Lobby now.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nomination of Select Committees at Commencement of Public Business):—
The House divided: Ayes 110, Noes 212.

Division No. 55]

[4.15 pm

AYES

Abse, Leo

George, Bruce

Ashton,Joe

Grant,George(Morpeth)

Barnett,Guy (Greenwich)

Hamilton,James (Bothwell)

Benn, RtHon Tony

Hardy, Peter

Bennett,Andrew(St'kp'tN)

Harrison, RtHonWalter

Bidwell, Sydney

Haynes, Frank

Booth, RtHon Albert

Hogg, N. (EDunb't'nshire)

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

Holland,S. (L'b'th, Vauxh 'II)

Canavan,Dennis

Hooley,Frank

Carmichael,Neil

Huckfield,Les

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

Hughes, Roy (Newport)

Clark, Dr David (S Shields)

Jay, RtHon Douglas

Cocks, RtHon M. (B'stol S)

Jones, RtHon Alec (Rh'dda)

Concannon, RtHon J. D.

Jones, Barry (East Flint)

Cox, T. (W'dsw'th,Toot'g)

Kilfedder, JamesA.

Crowther,Stan

Lambie,David

Cunliffe,Lawrence

Lamond,James

Cunningham, DrJ. (W'h'n)

Leighton,Ronald

Davies, RtHon Denzil (L'Ili)

Lewis, Ron (Carlisle)

Davis, Clinton (HackneyC)

Litherland,Robert

Deakins, Eric

McCartney, Hugh

Dean, Joseph (Leeds West)

McCusker, H.

Dixon, Donald

McDonald,DrOonagh

Dobson, Frank

McKay,Allen (Penistone)

Dormand,Jack

McKelvey,William

Dubs,Alfred

McNamara, Kevin

Dunlop,John

McTaggart,Robert

Dunwoody, Hon Mrs G.

McWilliam,John

Eadie, Alex

Marshall, D(G'gowS'ton)

Eastham, Ken

Marshall, DrEdmund (Goole)

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

Maxton,John

English, Michael

Maynard, MissJoan

Evans, loan (Aberdare)

Mikardo,lan

Evans, John (Newton)

Miller, Dr M. S. (E Kilbride)

Field, Frank

Morris, RtHon A. (W'shawe)

Foot, RtHon Michael

Morris, RtHon C. (0'shaw)

Fraser, J. (Lamb'th, N'w'd)

Morton,George

Garrett,John (Norwich S)

Moyle, RtHon Roland

Garrett, W. E. (Wallsend)

Newens, Stanley

318

Oakes, RtHon Gordon

Silverman, Julius

O'Neill, Martin

Skinner, Dennis

Orme, RtHon Stanley

Spearing, Nigel

Powell, RtHon J.E. (S Down)

Spriggs, Leslie

Powell, Raymond (Ogmore)

Stallard, A. W.

Price, C. (Lewisham W)

Stewart, RtHon D. (W Isles)

Proctor, K.Harvey

Stoddart,David

Race, Reg

Taylor, Mrs Ann (Bolton W)

Radice, Giles

Tinn, James

Richardson.Jo

Varley, RtHon Eric G.

Roberts, Albert(Normanton)

Walker, RtHon H.(D'caster)

Roberts,Allan (Bootle)

Welsh,Michael

Rooker, J. W.

Winnick.David

Ross, Ernest (Dundee West)

Woodall,Alec

Rowlands,Ted

Sever, John

Tellers for the Ayes:

Shore, RtHon Peter

Mr. Bob Cryer and

Silkin, RtHon J. (Deptford)

Mr. Thomas Torney.

NOES

Alexander, Richard

Freud,Clement

Alison, RtHon Michael

Fry, Peter

Alton, David

Gardiner,George(Reigate)

Ancram, Michael

Garel-Jones,Tristan

Arnold,Tom

Gilmour, RtHon Sir Ian

Aspinwall,Jack

Goodhew,SirVictor

Atkins, RtHon H.(S'thorne)

Goodlad,Alastair

Atkins, Robert(PrestonN)

Gorst,John

Baker, Nicholas (N Dorset)

Gow, Ian

Beith, A.J.

Grant, Anthony (HarrowC)

Bennett,SirFrederic (T'bay)

Griffiths,Petet Portsm'thN)

Benyon, Thomas(A'don)

Grimond, RtHon J.

Berry, Hon Anthony

Grist, Ian

Bevan, DavidGilroy

Gummer, JohnSelwyn

Biggs-Davison, SirJohn

Hamilton, HonA.

Boscawen, Hon Robert

Hamilton, Michael (Salisbury)

Bottomley, Peter(W'wichW)

Hannam, John

Boyson, DrRhodes

Haselhurst, Alan

Bradley, Tom

Hawkins, Paul

Braine, SirBernard

Hayhoe, Barney

Brocklebank-Fowler, C.

Heddle, John

Brooke, Hon Peter

Henderson, Barry

Brown, RonaldW. (H'ckn'yS)

Heseltine, RtHon Michael

Bruce-Gardyne, John

Hicks, Robert

Buck, Antony

Higgins, RtHon Terence L

Budgen, Nick

Hill, James

Cadbury, Jocelyn

Hogg, HonDouglas(Gr'th'm)

Carlisle, Kenneth(Lincoln)

Holland, Philip(Carlton)

Cartwright, John

Hooson, Tom

Chalker, Mrs.Lynda

Hordern, Peter

Channon, Rt.Hon.Paul

Howell, Ralph (NNorfolk)

Chapman,Sydney

Howells, Geraint

Churchill, W.S.

Hunt, David (Wirral)

Clark, Sir W. (Croydon S)

Hunt, John(Ravensbourne)

Clarke, Kenneth(Rushcliffe)

Hurd, HonDouglas

Colvin, Michael

Jenkin, RtHon Patrick

Cope, John

Johnston, Russel (Inverness)

Cormack, Patrick

Jopling, RtHon Michael

Corrie,John

Joseph, RtHon Sir Keith

Costain, SirAlbert

Kershaw, SirAnthony

Crouch, David

Kimball, SirMarcus

Dean, Paul (NorthSomerset)

King, RtHon Tom

Dickens, Geoffrey

Kitson, SirTimothy

Dorrell, Stephen

Knight, MrsJill

Douglas-Hamilton, LordJ.

Knox, David

Douglas-Mann, Bruce

Lang, Ian

Dunn, Robert (Dartford)

Langford-Holt, SirJohn

Durant, Tony

Lee, John

Eden, RtHon Sir John

Lennox-Boyd, HonMark

Elliott, SirWilliam

Lester, Jim (Beeston)

Ellis, Tom (Wrexham)

Lewis, Kenneth (Rutland)

Eyre, Reginald

Lloyd, Ian (Havant & W'loo)

Fairgrieve, SirRussell

Loveridge, John

Faith, MrsSheila

Luce, Richard

Finsberg, Geoffrey

Lyons, Edward (Bradf'dW)

Fisher, SirNigel

Mabon, RtHon DrJ. Dickson

Fletcher-Cooke, SirCharles

McCrindle, Robert

Fookes, Miss Janet

Macfarlane, Neil

Forman, Nigel

MacGregor, John

Fox, Marcus

MacKay, John (Argyll)

319

Maclennan, Robert

Onslow, Cranley

Macmillan, RtHon M.

Oppenheim, RtHon Mrs S.

Major, John

Osborn, John

Marshall,Michael (Arundel)

Owen, RtHon Dr David

Mates,Michael

Page, John (Harrow, West)

Mather, Carol

Page, Richard (SW Herts)

Mawby, Ray

Parkinson, RtHon Cecil

Mawhinney, DrBrian

Patten, Christopher(Bath)

Maxwell-Hyslop, Robin

Pawsey, James

Mayhew, Patrick

Penhaligon, David

Meyer, SirAnthony

Pitt, WilliamHenry

Mills, lain(Meriden)

Porter, Barry

Mills, Peter (West Devon)

Pym, RtHon Francis

Mitchell, R.C (Soton Itchen)

Raison, Timothy

Monro, SirHector

Rathbone, Tim

Morris, M. (N'hamptonS)

Rees, Peter (Dover and Deal)

Morrison, Hon C. (Devizes)

Rees-Davies, W. R.

Murphy, Christopher

Rhodes James, Robert

Myles, David

RhysWilliams, SirBrandon

Neale, Gerrard

Ridley, HonNicholas

Needham, Richard

Rifkind, Malcolm

Nelson, Anthony

Roberts, M. (Cardiff NW)

Neubert, Michael

Roberts, Wyn (Conway)

Newton, Tony

Roper, John

Nott, RtHon John

Rossi, Hugh

Question accordingly negatives.

320

Rost, Peter

Thomas, DrR.(Carmarthen)

Sandelson, Neville

Thompson,Donald

Shaw, Giles (Pudsey)

Thornton, Malcolm

Shaw, Micheal(Scarborough)

Trippier, David

Shelton, William(Streatham)

Trotter, Neville

Shepherd, Colin(Hereford)

Vaughan, DrGerard

Sims, Roger

Viggers, Peter

Skeet, T. H. H.

Waddington, David

Smith, Dudley

Wainwright, R.(ColneV)

Speller, Tony

Wall, SirPatrick

Spence, John

Waller, Gary

Spicer, Jim (West Dorset)

Ward, John

Spicer, Michael(S Worcs)

Warren, Kenneth

Stanbrook, lvor

Watson, John

Stanley, John

Wheeler, John

Steel, RtHon David

Whitelaw, RtHon William

Steen, Anthony

Whitney, Raymond

Stevens, Martin

Wilkinson, John

Stewart, A. (ERenfrewshire)

Wolfson, Mark

Stewart, Ian (Hitchin)

Stradling Thomas,J.

Tellers for the Noes

Tebbit, RtHon Norman

Mr. Robin Squire and

Temple-Morris, Peter

Mr. Hugh Dykes.

Orders of the Day
  Local Government (Miscellaneous Provisions) Bill
  As amended (in the Standing Committee), considered.
  New Clause 1

    LICENSING OF SEX ESTABLISHMENTS
    '(1) A local authority may resolve that Schedule (Sex establishments) to this Act is to apply to their area; and if a local authority do so resolve, that Schedule shall come into force in their area on the day specified in that behalf in the resolution (which must not be before the expiration of the period of one month beginning with the day on which the resolution is passed).

    'SEX ESTABLISHMENTS

    Meaning of "sex establishment"

    1. In this Schedule "sex establishment" means a sex cinema or a sex shop.Meaning of "sex cinema"

    2.—(1) In this Schedule "sex cinema" means any premises, vehicle or stall used to a significant degree for the exhibition of moving pictures, by whatever means produced, which—

    (a) are concerned primarily with the portrayal of, or primarily deal with or relate to, or are intended to stimulate or encourage—

    (i) sexual activity; or

    (ii) acts of force, restraint, violence orcruelty which are associated with sexual activity: or

    (b) are concerned primarily, with the portrayal of, or primarily deal with or relate to, genital organs or urinary or excretary functions;

    but does not include a dwelling house to which the public is not admitted.

    (2) No premises shall be treated as a sex cinema by reason only—

    (a) if they are licensed under the Cinematograph Act 1909, of their use for a purpose for which a licence under that Act is required; or

    (b) of their use for an exempted exhibition as defined in section 5 of the Cinematograph Act 1952 (which relates to exemptions from the requirements of that Act for non-commercial organisations) by an exempted organisation within the meaning of section 5(4) of that Act.Meaning of "sex shop" and "sex article"

    3.—(1) In this Schedule "sex shop" means any premises, vehicle or stall used for a business which consists to a significant degree of selling, hiring, exchanging, lending, displaying or demonstrating—

    (a) sex articles; or

    (b) other things intended for use in connection with, or for the purpose of stimulating or encouraging—

    (i) sexual activity; or

    (ii) acts of force, restraint, violence or cruelty which are associated with sexual activity.

    (2) No premises shall be treated as a sex shop by reason only of their use for the exhibition of moving pictures by whatever means produced.

    (3) In this Schedule "sex article" means—

    (a) anything made for use in connection with, or for the purpose of stimulating or encouraging—

    (i) sexual activity; or

    (ii) acts of force, restraint, violence or cruelty which are associated with sexual activity; and

    (b) anything to which sub-paragraph (4) below applies.

    (4) This sub-paragraph applies—

    (a) to any article containing or embodying matter to be read or looked at or anything intended to be used, either alone or as one of a set, for the reproduction or manufacture of any such article; and

    (b) to any recording of vision or sound, which—

    (i) is concerned primarily with the portrayal of, or primarily deals with or relates to, or is intended to stimulate or encourage, sexual activity or acts of force, restraint, violence or cruelty which are associated with sexual activity; or

    (ii) is concerned primarily with the portrayal of, or primarily deals with or relates to, genital organs, or urinary or excretory functions.

    (2) A local authority shall publish notice that they have passed a resolution under this section in two consecutive weeks in a local newspaper circulating in their area.
    (3) The first publication shall not be later than 28 days before the day specified in the resolution for the coming into force of Schedule (Sex establishments) to this Act in the local authority's area.
    (4) The notice shall state the general effect of that section.
    (5) In this Part of this Act "local authority" means—

    (a) the council of a district;

    (b) the council of a London borough; and

    (c) the Common Council of the City of London.'.—[Mr. Raison.]

    Brought up, and read the First time.
    4.20 pm
    The Minister of State, Home Office (Mr. Timothy Raison): I beg to move, That the clause be read a Second time.
    Mr. Speaker: With this we may take Government amendment No. 70—New Schedule—

    Miscellaneous definitions

    (4) In this Schedule—

    "the appropriate authority" means, in relation to any area for which a resolution has been passed under section [Licensing of sex establishments] above, the local authority who passed it;

    "the chief officer of police", in relation to any locality, means the chief officer of police for the police area in which the locality is situated; and

    "the relevant locality" means—

    (i) in relation to any premises, the locality where they are situated; and

    (ii) in relation to a vehicle or stall, the locality in which it is or is to be situated when it is used as a sex establishment.

    Requirement for licences for sex establishments

    5.—(1) Subject to the provisions of this Schedule, no person shall in any area in which this Schedule is in force use any premises, vehicle or stall as a sex establishment except under and in accordance with the terms of a licence granted under this Schedule by the appropriate authority.

    (2) Sub-paragraph (1) above does not apply to the sale, supply or demonstration of articles which—

    (a) are manufactured for use primarily for the purposes of birth control; or

    (b) primarily relate to birth control.

    6.—(1) Any person who—

    (a) uses any premises, vehicle or stall for any business or other activity requiring a licence under this Schedule; or

    (b) proposes to do so, may apply to the appropriate authority for them to waive the requirement of a licence in respect of that business or activity.

    (2) An application under this paragraph may be made either as part of an application for a licence under this Schedule or without any such application.

    (3) An application under this paragraph shall be made in writing to the appropriate authority and shall contain the particulars specified in paragraph 9(2) to (6) below.

    (4) The appropriate authority may waive the requirement of a licence in any case where they consider that to require a licence would be unreasonable or inappropriate.

    (5) A waiver may be for such period as the appropriate authority think fit.

    (6) Where the appropriate authority grant an application for a waiver, they shall give the applicant for the waiver notice that they have granted his application.

    (7) The appropriate authority may at any time give a person who would require a licence but for a waiver notice that the waiver is to terminate on such date as may be specified in the notice.

    (8) The date to be specified in a notice under sub-paragraph (7) above shall be not less than 28 days from the date of service of the notice.

    Grant, renewal and transfer of licences for sex establishments

    7. Subject to paragraph 11(1) below, the appropriate authority may grant to any applicant, and from time to time renew, a licence under this Schedule for the use of any premises, vehicle or stall specified in it for a sex establishment on such terms and conditions and subject to such restrictions as may be so specified.

    8.—(1) Subject to paragraphs 10 and 22, below, any licence under this Schedule shall, unless previously cancelled under paragraph 15 or revoked under paragraph 16(1) below, remain in force for one year or for such shorter period specified in the licence as the appropriate authority may think fit.

    (2) Where a licence under this Schedule has been granted to any person, the appropriate authority may, if they think fit, transfer that licence to any other person on the application of that other person.

    9.—(1) An application for the grant, renewal or transfer of a licence under this Schedule shall be made in writing to the appropriate authority.

    (2) An application made otherwise than by or on behalf of a body corporate or an unincorporated body shall state—

    (a) the full name of the applicant;

    (b) his permanent address; and

    (c) his age.

    (3) An application made by a body corporate or an unincorporated body shall state—

    (a) the full name of the body;

    (b) the address of its registered or principal office; and

    (c) the full names and private addresses of the directors or other persons responsible for its management.

    (4) An application relating to premises shall state the full address of the premises.

    (5) An application relating to a vehicle or stall shall state the place where it is to be situated when it is used as a sex establishment.

    (6) Every application shall contain such particulars as the appropriate authority may reasonably require in addition to any particulars required under sub-paragraphs (2) to (5) above.

    (7) An applicant for the grant, renewal or transfer of a licence under this Schedule shall give public notice of the application, identifying the premises or specifying the place where the vehicle or stall is to be situated when it is used as a sex establishment, in such form as the appropriate authority may prescribe—

    (a) where the application is made in respect of premises, by displaying the notice on or near the premises in a place where it can conveniently be read by the public, for 21 days beginning with the date of the application; and

    (b) by advertising not later than 7 days after the date of the application in a local newspaper circulating in the relevant locality.

    (8) An applicant for the grant, renewal or transfer of a licence under this Schedule shall, not later than 7 days after the date of the application, give notice of the application identifying the premises or specifying the place where the vehicle or stall is to be situated when it is used as a sex establishment, to the chief officer of police in the relevant locality.

    (9) Any person objecting to an application for the grant, renewal or transfer of a licence under this Schedule shall give notice in writing of his objection to the appropriate authority, stating in general terms the grounds of the objection, not later than 28 days after the date of the application.

    (10) Where the appropriate authority receive notice of any objection under sub-paragraph (9) above the authority shall, before considering the application, give notice in writing of the general terms of the objection to the applicant.

    (11) The appropriate authority shall not, without the consent of the person making the objection, reveal his name or address to the applicant.

    (12) In considering any application for the grant, renewal or transfer of a licence the appropriate authority shall have regard to any observations submitted to them by the chief officer of police and any objections of which notice has been sent to them under subparagraph (9) above,

    (13) The appropriate authority shall give an opportunity of appearing before and of being heard by them—

    (a) before refusing to grant a licence, to the applicant;

    (b) before refusing to renew a licence, to the holder; and

    (c) before refusing to transfer a licence, to the holder and the person to whom he desires that it shall be transferred

    (14) Where the appropriate authority refuse to grant, renew or transfer a licence they shall, if required to do so by the applicant or holder of the licence, give him a statement in writing of the grounds upon which their decision was based within 7 days of the decision.

    10.—(1) Where, before the date of expiry of a licence, an application has been made for its renewal, it shall be deemed to remain in force notwithstanding that the date has passed until the withdrawal of the application or its determination by the appropriate authority.

    (2) Where, before the date of expiry of a licence, an application has been made for its transfer, it shall be deemed to remain in force with any necessary modifications until the withdrawal of the application or its determination notwithstanding that the date has passed or that the person to whom the licence is to be transferred if the application is granted is carrying on at premises, vehicle or stall in respect of which the licence was granted the functions to which it relates.

    Refusal of licences

    11.—(1) A licence under this Schedule shall not be granted—

    (a) to a person under the age of 18; or

    (b) to a person who is for the time being disqualified under paragraph 16(2) below; or

    (c) to a person, other than a body corporate, who is not resident in the United Kingdom or was not so resident throughout the period of six months immediately preceding the date when the application was made; or

    (d) to a body corporate which is not incorporated in the United Kingdom; or

    (e) to a person who has, within a period of 12 months immediately preceding the date when the application was made, been refused the grant or renewal of a licence for the premises, vehicle or stall in respect of which the application is made, unless the refusal has been reversed on appeal.

    (2) Subject to paragraph 22 below, the appropriate authority may refuse—

    (a) an application for the grant or renewal of a licence on one or more of the grounds specified in sub-paragraph (3) below;

    (b) an application for the transfer of a licence on either or both of the grounds specified in paragraphs (a) and (b) of that sub-paragraph.

    (3) The grounds mentioned in sub-paragraph (2) above are—

    (a) that the applicant is unsuitable to hold the licence by reason of having been convicted of an offence or for any other reason;

    (b) that if the licence were to be granted, renewed or transferred the business to which it relates would be managed by or carried on for the benefit of a person other than the applicant who would be refused the grant, renewal or transfer of such a licence if he made the application himself;

    (c) that the number of sex establishments in the relevant locality at the time the application is made is equal to or exceeds the number which the authority consider is appropriate for that locality;

    (d) that the grant or renewal of the licence would be inappropriate, having regard—

    (i) to the character of the relevant locality; or

    (ii) to the use to which any premises in the vicinity are put; or

    (iii) to the layout, character or condition of the premises, vehicle or stall in respect of which the application is made.

    Power to prescribe standard conditions

    12.—(1) Subject to the provisions of this Schedule, the appropriate authority may make regulations prescribing standard conditions applicable to licences for sex establishments, that is to say terms, conditions and restrictions on or subject to which licences under this Schedule are in general to be granted, renewed or transferred by them.

    (2) Regulations under sub-paragraph (1) above may make different provision—

    (a) for sex cinemas and sex shops; and

    (b) for different kinds of sex cinemas and sex shops.

    (3) Without prejudice to the generality of sub-paragraphs (1) and (2) above, regulations under this paragraph may prescribe conditions regulating—

    (a) the hours of opening and closing of sex establishments;

    (b) displays or advertisements on or in such establishments;

    (c) the age below which persons may not be admitted to or employed in or in connection with a sex establishment;

    (d) the visibility of the interior of sex establishments to passers by; and

    (e) any change of a sex cinema to a sex shop or a sex shop to a sex cinema.

    (4) Where the appropriate authority have made regulations under sub-paragraph (1) above, every such licence granted, renewed or transfered by them shall be presumed to have been so granted, renewed or transferred subject to any standard conditions applicable to it unless they have been expressly excluded or varied.

    (5) Where the appropriate authority have made regulations under sub-paragraph (1) above, they shall, if so requested by any person, supply him with a copy of the regulations on payment of such reasonable fee as the authority may determine.

    (6) In any legal proceedings the production of a copy of any regulations made by the appropriate authority under sub-paragraph (1) above purporting to, be certified as a true copy by an officer of the authority authorised to give a certificate for the purposes of this paragraph shall be prima facie evidence of such regulations, and no proof shall be required of the handwriting or official position or authority of any person giving such certificate.

    Copies of licences and standard conditions

    13.—(1) The holder of a licence under this Schedule shall keep exhibited in a suitable place to be specified in the licence a copy of the licence and of any regulations made under paragraph 12(1) above which prescribed standard conditions subject to which the licence is held.

    (2) The appropriate authority shall send a copy of any licence granted under this Schedule to the chief officer of police for the area where the sex establishment is situated.

    Transmission and cancellation of licences

    14. In the event of the death of the holder of a licence granted under this Schedule, that licence shall be deemed to have been granted to his personal representatives and shall, unless previously revoked, remain in force until the end of the period of 3 months beginning with the death and shall then expire; but the appropriate authority may from time to time, on the application of those representatives, extend or further extend the period of three months if the authority are satisfied that the extension is necessary for the purpose of winding up the deceased's estate and that no other circumstances make it undersirable.

    15. The appropriate authority may, at the written request of the holder of a licence, cancel the licence.

    Revocation of licences

    16.—(1) The appropriate authority may, after giving the holder of a licence under this Schedule an opportunity of appearing before and being heard by them, at any time revoke the licence—

    (a) on any groung specified in sub-paragraph (1) of paragraph 11 above; or

    (b) on either of the grounds specified in sub-paragraph (3)(a) and (b) of that paragraph.

    (2) Where a licence is revoked, its holder shall be disqualified from holding or obtaining a licence in the area of the relevant authority for a period of 12 months beginning with the date of revocation.

    Variation of licences

    17.—(1) The holder of a licence under this Schedule may at any time apply to the appropriate authority for any such variation of the terms, conditions or restrictions on or subject to which the licence is held as may be specified in the application.

    (2) The relevant authority—

    (a) may make the variations specified in the application; or

    (b) may make such variations as they think fit; or

    (c) may refuse the application.

    (3) The variations that an authority may make by virtue of sub-paragraph (2)(b) above include, without prejudice to the generality of that sub-paragraph, variations involving the imposition of terms, conditions or restrictions other than those specified in the application.

    Fees

    18. An applicant for the grant, renewal or transfer of a licence under this Schedule shall pay such reasonable fee in respect of the application as the appropriate authority may determine.

    Enforcement

    19.—(1) A person who—

    (a) knowingly uses, or knowingly causes or permits the use of any premises, vehicle or stall contrary to paragraph 5, above; or

    (b) being the holder of a licence under this Schedule, in the course of his business employs at the premises, vehicles or stall in respect of which the licence is held any person known to him to be for the time being disqualified from holding such a licence; or

    (c) being the holder of a licence under this Schedule, without reasonable excuse knowingly contravenes, or knowingly permits the contravention of, a term, condition or restriction specified in the licence; or

    (d) being the servant or agent of the holder of a licence under this Schedule, without

    reasonable excuse knowingly contravenes, or knowingly permits the contravention of, a term, condition or restriction specified in the licence; shall be guilty of an offence.

    (2) Any person who, in connection with an application for the grant, renewal or transfer of a licence under this Schedule, makes a false statement which he knows to be false in any material respect or which he does not believe to be true, shall be guilty of an offence.

    (3) A person guilty of an offence under sub-paragraph (1) or (2) above shall be liable on summary conviction to a fine not exceeding £5,000.

    (4) A person who being the holder of a licence under this Schedule fails without reasonable excuse to comply with paragraph 13(1) above shall be guilty of an offence and liable on summary conviction to a fine not exceeding £200.

    (5) Where an offence under this paragraph committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of the offence.

    (6) Where the affairs of a body corporate are managed by its members sub-paragraph (5) above shall apply to the acts and defaults of a member in connection with his function of management as if he were a director of a body corporate.

    20. If a constable has reasonable cause to suspect that a person has committed an offence under paragraph 19(1) above he may require him to give his name and address, and if that person refuses or fails to do so, or gives a name or address which the constable reasonable suspects to be false, the constable may arrest him without warrant.

    21.—(1) A constable or an authorised officer of a local authority may, at any reasonable time,—

    (a) enter any premises in the authority's area in respect of which a licence under this Schedule is for the time being in force; and

    (b) inspect any vehicle or stall in the authority's area in respect of which such a licence is for the time being in force, with a view to seeing—

    (i) whether the terms, conditions or restrictions on or subject to which the licence is held are complied with; and

    (ii) whether any person is being employed in the course of the business carried on at the premises, vehicle or stall who is for the time being disqualified from holding a licence under this Schedule.

    (2) Subject to sub-paragraph (3) below, a constable or an authorised officer of a local authority—

    (a) may enter any premises in the authority's area; and

    (b) may inspect any vehicle or stall in that area, if he has reason to suspect that an offence under paragraph 19 above has been, is being, or is about to be committed in relation to the premises, vehicle or stall.

    (3) No power conferred by sub-paragraph (2) above may be exercised by a constable or an authorised officer of a local authority unless he has been authorised to exercise it by a warrant granted by a justice of the peace.

    (4) Where an authorised officer of a local authority exercises any such power, he shall produce his authority if required to do so by the occupier of the premises or the person in charge of the vehicle or stall in relation to which the power is exercised.

    (5) Any person who without reasonable excuse refuses to permit a constable or an authorised officer of a local authority to exercise any such power shall be guilty of an offence and shall for every such refusal be liable on summary conviction to a fine not exceeding £200.

    Appeals

    22.—(1) Subject to sub-paragraph (2) below, any of the following persons, that is to say—

    (a) an applicant for the grant, renewal or transfer of a licence under this Schedule whose application is refused;

    (b) an applicant for the variation of the terms, conditions or restrictions on or subject to which any such licence is held whose application is refused;

    (c) a holder of any such licence who is aggrieved by any term, condition or restriction on or subject to which the licence is held; or

    (d) a holder of any such licence whose licence is revoked, may at any time before the expiration of the period of 21 days beginning with the relevant date appeal to the magistrates'court acting for the petty sessions area in which—

    (i) the premises in respect of which the application is made are situated; or

    (ii) the vehicle or stall in respect of which the application is made is or is to be situated when it is used as a sex establishment.

    (2) An applicant whose application for the grant or renewal of a licence is refused, or whose licence is revoked, on any ground specified in paragraph 11(1) above shall not have a right to appeal under this paragraph unless the applicant seeks to show that the ground did not apply to him.

    (3) In this paragraph "the relevant date" means the date on which the person in question is notified of the refusal of his application, the imposition of the term, condition or restriction by which he is aggrieved or the revocation of his licence, as the case may be.

    (4) An appeal against the decision of a magistrates' court under this paragraph may be brought to the Crown Court.

    (5) Where an appeal is brought to the Crown Court under sub-paragraph (4) above, the decision of the Crown Court shall be final; and accordingly in section 28(2)(b) of the Supreme Court Act 1981 for the words "or the Gaming Act 1968" there shall be substituted the words ", the Gaming Act 1968 or the Local Government (Miscellaneous Provisions) Act 1982".

    (6) On an appeal to the magistrates' court or the Crown Court under this paragraph the court may make such order as it thinks fit.

    (7) Subject to sub-paragraphs (8) to (11) below, it shall be the duty of the appropriate authority to give effect to an order of the magistrates' court or the Crown Court.

    (8) The appropriate authority need not give effect to the order of the magistrates' court until the time for bringing an appeal under sub-paragraph (4) above has expired and, if such an appeal is duly brought, until the determination or abandonment of the appeal.

    (9) Where a licence is revoked or an application for the renewal of a licence is refused, the licence shall be deemed to remain in force—

    (a) until the time for bringing an appeal under this paragraph has expired and, if such an appeal is duly brought, until the determination or abandonment of the appeal; and

    (b) where an appeal relating to the refusal of an application for such a renewal is successful and no further appeal is available, until the licence is renewed by the appropriate authority.

    (10) Where—

    (a) the holder of a licence makes an application under paragraph 17 above; and

    (b) the appropriate authority impose any term, condition or restriction other than one specified in the application, the licence shall be deemed to be free of it until the time for bringing an appeal under this paragraph has expired.

    (11) Where an appeal is brought under this paragraph against the imposition of any such term, condition or restriction, the licence shall be deemed to be free of it until the determination or abandonment of the appeal.

    provisions relating to existing premises

    23.—(1) Without prejudice to any other enactment it shall be lawful for any person who—

    (a) immediately before the appointed day was using any premises, vehicle or stall as a sex establishment; and

    (b) had before that day duly applied to the appropriate authority for a licence for the premises, vehicle or stall under this Schedule, to continue to use the premises, vehicle or stall as a sex establishment until the determination of his application.

    (2) In this paragraph and paragraph 24 below "the appointed day", in relation to any area, means the day specified in the resolution passed under section [Licensing of sex establishments] above as the date upon which this Schedule is to come into force in that area.

    24.— (1) This paragraph applies to an application for the grant of a licence under this Schedule made before the appointed day.

    (2) A local authority shall not consider any application to which this paragraph applies before the appointed day.

    (3) A local authority shall not grant any application to which this paragraph applies until they have considered all such applications.

    (4) In considering which of several applications to which this paragraph applies should be granted a local authority shall give preference over other applicants to any applicant who satisfies them—

    (a) that he is using the premises, vehicle or stall to which the application relates as a sex establishment; and

    (b) that some person was using the premises, vehicle or stall as a sex establishment on 22nd December 1981; and

    (c) that—

    (i) he is that person; or

    (ii) he is a successor of that person in the business or activity which was being carried on there on that date.

    Saving for criminal law

    25. Nothing in this Schedule—

    (a) shall afford a defence to a charge in respect of any offence at common law or under an enactment other than this Schedule; or

    (b) shall be taken into account in any way at a trial for such an offence. '.

    And the following amendments to the proposed new schedule:

    (a), in line 10, leave out from 'activity' to 'or' in line 11

    (b), in line 30, leave out from 'activity' to end of line 32.

    (c), in line 38, leave out from 'activity' to 'and' in line 40.

    (d), in line 49, leave out from 'activity' to 'or' in line 50.

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    (e), in line 73, leave out paragraph 6.

    (f), in line 93, at end insert—

    '6A. The appropriate authority shall not grant a licence for premises intended for the selling, hiring, exchanging or lending of sex articles or other things for the purpose of stimulating or encouraging violence or cruelty associated with sexual activity. '.

    (g), line 97, at end insert—

    'Provided that nothing in this Schedule contained shall impose upon the appropriate authority a duty to grant or renew any licence.’.

    (h), in line 148, at end insert

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    'and shall give an opportunity to the Chief Officer of Police and any such objector of appearing before and being heard by them'.

    (i),in line 195, after 'locality', insert and the applicant cannot show that the attitude of the authority is unreasonable'.

    (j), in line 200, at end insert— '(vi) to substantial objections by residents in the relevant locality.'

    (k), in line 296, at end insert 'or to imprisonment for a term not exceeding six months'.

    Mr. Raison: The new clause and the schedule fulfil the undertaking that I gave in Committee to bring forward proposals on Report to enable local authorities in England and Wales to control sex shops and sex cinemas by means of a licensing scheme. It was in the light of that undertaking, which I am glad to say received a warm welcome from both sides of the Committee, that the hon. Member for Rotherham (Mr. Crowther) withdrew the new clauses that he had tabled.
    The general background to the new clause and schedule is, I suspect, familiar to those right hon. and hon. Members who have received representations from their constituents about sex shops opening, or threatening to open, in their constituencies. A number of hon. Members, including my hon. Friends the Members for Romford (Mr. Neubert), for Fulham (Mr. Stevens) and for Reading, North (Mr. Durant) and the hon. Member for Southampton, Itchen (Mr. Mitchell), spoke with some feeling on this on Second Reading, as did my hon. Friends the Members for Welwyn and Hatfield (Mr. Murphy), for Southampton, Test (Mr. Hill), for Faversham (Mr. Moate), for Epsom and Ewell (Mr. Hamilton) and for Chipping Barnet (Mr. Chapman) and the right hon. Member for Widnes (Mr. Oakes). I think that it would be fair to say that the tenor of all their speeches was broadly to support the notion of introducing licensing schemes to tackle the problem.
    4.30 pm
    The number of establishments has significantly increased over the past 18 months or so. That has understandably caused a great deal of concern and resentment among local communities. That has been especially true where the establishments have opened in particularly unsuitable locations—near a school or, as my hon. Friend the Member for Reading, North found in his constituency, next to a church.
    The local authority has usually found itself powerless to intervene in any way, because sex shops have invariably opened in premises that were previously being used as ordinary shops, and that has meant that planning permission has not been needed. I explained in Committee why planning controls were not particularly effective in this context, and I think that the Committee accepted my explanation.
    The lack of any effective powers by local authorities to control the number and location of the establishments, and the pressing nature of the problem in Soho, led the Greater London Council and Westminster city council early last year to propose the introduction of licensing controls in Greater London. My right hon. Friend the Home Secretary expressed his support in principle for the proposal.
    It was our view initially that we should wait on experience of the GLC's proposals before deciding whether it would be desirable and practicable to introduce
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    similar arrangements on a national basis. We were impressed, however, by the strength of the many representations which we received from right hon. and hon. Members, the local authority associations, individual local authorities and members of the public, urging us not to delay. As a result, too, of the close collaboration between the local authority interests and the Home Office in the preparation of the GLC's proposals, we were satisfied that control by licensing was indeed practicable. Accordingly, when the hon. Member for Rotherham tabled his new clauses in Committee we felt able to give the undertaking which is now fulfilled by the new clause and the schedule.
    I should like, first, to say something about the thinking behind the new clause and the schedule. They seek to provide a means of control over premises whose activities are not in themselves necessarily unlawful but which may reasonably be felt to warrant regulation. What we seek to do is broadly to enable local authorities to ensure that undesirable elements are not concerned with the operation of sex shops and that the character of their areas is not adversely affected by these activities.
    Most of the hon. Members who spoke on this matter on Second Reading made it clear that they were seeking not complete prohibition of the premises, but a reasonable measure of control. To achieve this objective it is obviously necessary to acknowledge in legislative terms the existence of the premises. That is unavoidable. The Government fully understand, however, that there may be some whose objection to the premises is so strong that they find this degree of acknowledgement—even in the context of a measure designed to impose controls—unacceptable. I respect the strength of feeling that lies behind that view, but I feel bound to say that, on the evidence to date, there are a great many more who feel that that argument is outweighed by the need for the sort of local controls which the new clause and the schedule would provide.
    Mr. Alexander W. Lyon: The same argument was used about betting shops compared with illegal betting in the early 1960s. As a result of the Act dealing with that matter betting shops spread at a rate which the Act's proponents had never intended, simply because the quarter sessions decided that demand was not a factor that had to be taken into account. Will that happen in this case?
    Mr. Raison: Clearly, in this case numbers are of the essence of the licensing scheme that we are introducing. I do not see why the scheme should follow that path. The decisions about licensing will be made by the local authorities, which will of course be sensitive to the desires of those who live in their communities.
    Mr. Gordon Oakes: I was one of those who asked on Second Reading that the matter be dealt with, but why is it being dealt with in this cumbersome way? Why not merely change the planning designation? For example, if a chip shop were established in what had been an ordinary shop it would be in a separate planning category. Why could not that have been done, instead of using this cumbersome way, which appears to license not only sex shops but the most vicious perverted violence?
    Mr. Raison: We discussed in Committee whether the matter could be tackled through the planning mechanism. The problem is essentially that changes in articles stocked do not necessarily constitute a material change of use.

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    Moreover, planning considerations are meant to cover only planning grounds and not the other kinds of judgments which I think are essentially what the provision is about. Therefore, we believe that the planning approach is not the right one.
    I want to make it absolutely clear that the granting of a licence would not confer any immunity from the general provisions of the criminal law. This is made explicit in paragraph 25 of the schedule. The grant of a licence would merely signify that the licensing authority had approved, in the light of the criteria set out in the new clause and schedule, the general use of the premises. The establishments concerned would continue to be subject to, for example, the Obscene Publications Act 1959 and the Indecent Displays (Control) Act 1981. It would be a great mistake to argue, as I think some outside the House have sought to do.. that these proposals confer some advantage on the pornography industry. That is certainly not an opinion which the sex shop proprietors themselves share. This is not a permissive scheme, but a scheme for controlling and licensing sex shops.
    The new clause makes it clear that it is for each local authority—that is, each district council or London borough—to decide whether it wishes to adopt the licensing scheme in its area. Where licensing arrangements are introduced, the premises which will be subject to control are sex shops and sex cinemas, which are jointly termed "sex establishments". These premises are defined at some length in paragraphs 2 and 3 of the schedule. I readily sympathise with those hon. Members who may instinctively jib at these definitions, but it is clearly important that the definitions should leave no obvious loopholes.
    Broadly, a sex cinema is defined as premises used to a significant degree for the exhibition of films or videocassettes which primarily portray or deal with, or which are intended to encourage, sexual activity or associated acts of violence. Sex shops—again, broadly—are premises which trade to a significant degree in articles of any description which are similarly concerned with these activities or which are made or intended for use in connection with, or for the purpose of encouraging, these activities. The latter part of this definition is intended to cover the paraphernalia which, I am told, are often stocked by these premises.
    I should add two important qualifications. Ordinary cinemas are specifically exempted from the definition of "sex cinema". They are already subject to licensing under the Cinematograph Acts, which allow the cinema licensing authority to exercise control over what is shown. Secondly, there is a specific exemption, in paragraph 5(2), in respect of articles primarity relating to birth control.
    A more general point concerning sex cinemas is that the need to include these premises in the proposed licensing arrangements may be greatly diminished by the Cinematograph Bill of my hon. Friend the Member for Fareham (Mr. Lloyd), which has its Second Reading on Friday week. The principal object of that Bill will be to bring bogus commercial cinema clubs—which are to all intents and purposes the sex cinemas of these proposals—within the cinema licensing arrangements. If this were achieved, those premises would be removed automatically from the scope of the licensing arrangements set out in the new clause and the schedule. The Government may accordingly wish to reconsider at a later stage whether it is necessary to apply these proposed
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    licensing controls to cinemas. Much will depend on whether any mischief can be identified which is not caught effectively by my hon. Friend's proposals and which can be dealt with only under these licensing arrangements.
    I hope that right hon. and hon. Members will find it helpful if I now run through, as briefly as possible, how the licensing arrangements would work once they had been adopted in a given area. Any existing sex shop or prospective sex cinema proprietor would have to apply for a licence. He would have to give public notice of the application and inform the police. The local authority would be required to have regard to any objections that it received.
    The application would be refused if the conditions set out in paragraph 11(1) were not met; for example. if the applicant was under 18. The local authority would have discretion to refuse the application on one or more of the grounds set out in paragraph 11(3). These are that the applicant is unsuitable by reason of having been convicted of an offence or for any other reason; that the business would be managed by or carried on for the benefit of a person who would himself be refused a licence; that the number of sex establishments in the locality would be excessive; or that it would be inappropriate to grant the licence having regard to the relevant locality, to the use to which any premises in the vicinity are put or to the layout, character or condition of the premises concerned.
    Mr. Douglas Hogg: Will my right hon. Friend confirm that it is his intention that the penultimate provision to which he has referred, and which is contained in sub-paragraph (c), is intended to enable local authorities to prohibit all sex shops in their area if they deem it inappropriate to have any? If that is his intention, to clarify the matter and to avoid further dispute, would it not be prudent to provide a paragraph in the schedule stating that local authorities shall not, in any circumstances, be obliged to grant licences?
    Mr. Raison: My hon. Friend has raised an important point, which I shall deal with later. Broadly speaking, the answer is that if a local authority can satisfy the provision of the schedule, particularly with regard to locality, it will be possible for it to prohibit all sex shops. However, it must satisfy those provisions and cannot simply lay down, as a matter of moral principle, a policy banning sex shops under any circumstances.
    Mr. T. H. H. Skeet: If an existing sex shop is fairly close to a girls' school, can the local authority lay down an injunction that it must go elsewhere?
    Mr. Raison: I am coming to the question of existing premises.
    Existing premises would have no right to a licence. However, when licensing arrangements are first brought into force, premises in use as a sex establishment on 22 December 1981—the date on which I announced the Government's intention to introduce licensing controls—will have to be given preference over new premises. That will not affect the licensing authority's ability to determine the appropriate number of sex establishments in a locality, which could be fewer than the number of existing establishments.
    Essentially the answer to my hon. Friend the Member for Bedford (Mr. Skeet) is that, as far as numbers are concerned, if a sex shop is there already it will have an

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    advantage. However, if it does not meet the other requirements of the provisions the local authority will be able to refuse a licence. There would be no guarantee if the shop were in an unsatisfactory locality—as my hon. Friend has postulated—that it would get a licence.
    Mr. Skeet: If a sex shop has established itself in a location, for example, Tavistock Street in Bedford, before the Bill receives the Royal Assent, will it be able to stay there?
    Mr. Raison: My hon. Friend has misunderstood me. The only priority given to an existing sex shop is that where there is a dispute about numbers and it is the view of the local authority that there are too many sex shops the sex shop that is already there will be first in the queue for a licence and have first priority in licensing. However, if it is felt that the sex shop is in the wrong place the local authority will be able to refuse a licence.
    4.45 pm
    The local authority would have power to waive the requirement for a licence in any case where it considered it unreasonable or inappropriate to require one. This would provide a safeguard in the event of other premises being thought to fall within the scope of the definitions. The purpose of the waiver provision would be to avoid bringing in cases such as medical book shops or sex clinics, for which there may be a justification, and which the Bill is not designed to control.
    Under paragraph 22 an applicant refused a licence would be able to appeal to the magistrates' court and thence to the Crown court. Where a licence is issued it would be subject to such terms, conditions and restrictions as the licensing authorities prescribed. These might cover, for example, the hours of business, the age of admission to the premises, the visibility of the interior and displays in or on the premises. The licence would run for not more than 12 months, when an application would have to be made for renewal. The local authority would then be able to consider the position afresh and would be able to refuse renewal on any of the grounds on which it could refuse an initial application for a licence. The local authority and the police would have powers to enter and inspect licensed premises at any reasonable time and to enter and inspect unlicensed premises on a warrant. Offences would be tried before a magistrates' court only and would be punishable by a fine of up to £5,000.
    Mr. Leslie Spriggs (St. Albans): Subsection 5(a) of the new clause refers to
    "the council of a district".
    Will the right hon. Gentleman interpret that and let the House know whether this means all local authorities in the country?
    Mr. Raison: It means the district councils, the second tier of local authorities. In the metropolitan areas it would be the metropolitan district, and in the county areas the county districts. It does not mean the top tier of local government. Is that clear?
    Mr. Spriggs: I am afraid that it is not quite clear. Is the right hon. Gentleman trying to explain that this means that the district councils in the metropolitan area will decide this as a district council and not have to rely on the county council to decide for them?
    Mr. Raison: Yes, that is right.
    I firmly believe that the scheme that I have tried to outline will provide local authorities with the measure of control for which they have been pressing. I am confident that the criteria on which licensing applications will be considered are widely drawn and will enable local authorities to exercise firm and effective controls which fully and fairly reflect local circumstances and feelings. We cannot tackle the whole question of the obscenity laws in the Bill, but we can effectively meet a real and specific public anxiety, and that is what we are doing.
    Mr. J. Grimond: The right hon. Gentleman is leaving the question whether local authorities can refuse a licence for any sex shop. I should like to ask a further question, although perhaps he will deal with this later. I should have thought that under paragraph 11(3)(c) of the schedule it could be held that it was inappropriate to have any sex shop in such an area and any licences could be refused.
    Mr. Raison: I have tried to suggest that that may be so, but the council cannot simply say, regardless of the locality or the provisions of the schedule, that it will not have any sex shops. [HON. MEMBERS: "Why not?"] Let me just answer the right hon. Gentleman.
    The council can argue that it believes that the locality as a whole is unsuitable to have sex shops. That could be challenged in the courts by someone who sought a licence for a sex shop, but the argument would have to be on the merits of the locality rather than in terms of a general desire to have or not to have sex shops. I remind the House that we are talking about the Local Government (Miscellaneous Provisions) Bill, not a general law on obscenity.
    The Bill is not the right vehicle to deal with the whole question of whether sex shops should be allowed. However, it is the right vehicle for introducing a scheme by which local authorities, with their concern for their particular areas, with the characteristics of their localities, and so on, are able to introduce this kind of measure.
    Having tried to outline the general position, I think that it would be helpful to the House if I were to make a number of comments about the other amendments. Obviously hon. Members will wish to speak to their own amendments, but it might help our debate on what is a fairly tangled subject if I outline the Government's approach to the amendments to be debated in this grouping.
    I start with amendments (a) to (d) tabled by my hon. Friends the Members for Essex, South-East (Sir B. Braine) and for Peterborough (Dr. Mawhinney). I believe that these amendments would have an unwelcome effect. It is, in my view, essential that the definitions of sex establishments should be as comprehensive as possible and that they should contain no obvious loopholes that can be exploited by persons wishing to evade the controls imposed by the licensing arrangements.
    I understand the disquiet that some hon. Members, such as my hon. Friend the Member for Essex, South-East, feel about granting licences in respect of premises that may trade in offensive material. This disquiet, as I have tried to explain, is based largely on something of a misunderstanding about the effect of granting a licence. It would not confer any right on an individual to trade in any material that contravened the provisions of the general criminal law. That is what paragraph 25 makes clear.
    Mr. W. R. Rees-Davies: I should like to try to help clarify the position. My right hon. Friend says, I believe, that unless the schedule sets out comprehensively—including rather gross Ianguage—what it is that the Government wish to prevent, the result might be shops that one would be unable to prevent. The schedule has to be comprehensively worded to enable local authorities to ensure that sex shops so described are not allowed.
    Mr. Raison: My hon. and learned Friend does my job for me very well. That is the point that I was about to make. If we do not include the various activities that may be perfectly lawful at present within the scope of the provision, those activities will be outside the terms of the controls that we are introducing. The effect will be, unquestionably, to weaken control at a time when there is a strongly expressed public desire for a tightening of control.
    It would be absurd if premises trading in the less offensive material were made subject to the proposed controls, but other premises, trading in the more offensive material, escaped simply because we fought shy of mentioning that material in the relevant definitions. The latter premises would then be able to continue to open freely in sites of their own choosing. One could reach a situation in which a sex shop, debarred under a licensing control imposed by the local authorities from trading in what I might call the sexual activity side of things, could nevertheless indulge, without any restrictions, in trading in those activities which, I think it is generally accepted, would be regarded as more offensive.
    I hope that my hon. Friends will appreciate that while I understand the sentiment that lies behind the amendments. I do not believe that what they propose would be a helpful or practical measure for the House to take on board.
    I now refer to amendment (e), which is designed to leave out what I might call the waiver provision. I do not share the apparent views of my hon. Friends that paragraph 6 affords a loophole sufficiently serious to undermine the effect of the schedule. The definitions in paragraphs 2 and 3 of the schedule cover a wide range of material varying from that which primarily portrays or deals with sexual activity to material of a more extreme character. Premises need only trade to a significant degree in such material to be subject to licensing controls.
    The definitions have to be wide if we are not to allow premises that should be subject to the licensing authority's control to avoid the licensing arrangements entirely. This obviously carries a risk—it is, I think, more than a theoretical risk—that other premises might be held to require a licence that are not remotely comparable with the sort of premises and difficulties with which the schedule is designed to deal. A possible example is a medical bookshop or premises specialising in marriage guidance that sell material relating to sexual relations in marriage. It would be unreasonable in this situation to require such a shop to be Licensed. There may be other examples where local circumstances are such that it would be wrong to insist on a licence. We believe, therefore, that it is sensible that there should be the possibility for local authorities to waive the requirement for a licence.
    I do not believe that there is any reason to fear that the flexibility afforded by the provision would be abused. I cannot imagine that any local authority that had decided
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    to operate a licensing scheme would grant exemptions to premises that are clearly shops of the sort at which the schedule is directed. They do not have to have a licence scheme. If, however, they want a licence scheme it means they are concerned about the problem. I do not consider it remotely likely, therefore, that they would indulge in frivolous use of the waiver provision.
    I now refer to amendment (f), proposed by the right hon. Member for Lewisham, East (Mr. Moyle) and his hon. Friends. Again I think that there is some confusion about the nature of the proposed controls. The licensing authority, in issuing a licence, will be approving not the sale of particular items, but merely the general use of the premises. The grounds for refusal, consistent with a scheme of licensing control, are concerned not directly with the particular items to be sold on the premises, but rather with the suitability of the applicant and the suitability of the premises. These grounds are set out in paragraph 11(1) and (3).
    It would be a contradiction in terms to provide a licensing system for trade in certain articles and then to prohibit the licensing authority from issuing a licence in respect of the premises concerned. On this ground alone, as I think the right hon. Gentleman will agree, the amendment is seriously defective. It could not make sense to introduce a licensing system that covers a certain activity and then to say that under no circumstances is the granting of a licence allowed. That is surely not a proposal that the right hon. Gentleman can put forward.
    Mr. Roland Moyle: Yes, I can.
    Mr. Raison: The right hon. Gentleman says that he can. I shall be interested to see how he does so. To me, there seems to be a considerable logical flaw in his argument.
    I deal now with amendment (g), again proposed by my hon. Friends the Members of Essex, South-East and for Peterborough. The amendment provides that nothing in the schedule imposes any obligation on a licensing authority to grant or renew a licence. If my hon. Friends are seeking to make it clear that a licensing authority is not forced to grant or renew a licence where it considers that there are grounds for refusing an application, I assure them that their amendment is wholly unnecessary. Nothing in the schedule could possibly be read as imposing such an obligation. If, however, the purpose is to suggest that a licensing authority should be able to disregard the procedures and criteria set out in the schedule for considering applications, I do not think this could be reconciled with the provisions of the schedule.
    Mr. Alexander W. Lyon: Is not the trouble that if a local authority and most of the citizens of a local authority do not want any sex shops, and the local authority rules that it will not give licences in any respect to anyone, the decision can be overruled, under the terms of the schedule, by the local Crown court? Is it not the case that the local authority would have no right to say that it was advancing the views of most of the residents of the area? It is surely that matter that needs to be accommodated.
    Mr. Raison: It is possible for a local authority not to grant licences for sex shops in its area, but it has to act in the light of the character of the locality. It would have to argue in court that the locality of the area made it unsuitable for sex shops. In putting forward that argument

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    it would be likely, I should have thought, to have regard to the feelings of the local community. I cannot say how the courts would respond. I should have thought that they would take very much into account the clear evidence that might be produced that those who lived in the community felt that it was damaging to the area to have a sex shop. I believe that that is as far as it is proper to go in a provision of this nature.
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    I come now to amendment (h). I understand the desire of my hon. Friends the Members for Essex, South-East and for Peterborough that full account of the views of local residents should be taken by the licensing authority. However, I am satisfied that that objective is already secured by the schedule. Paragraph 9(12) provides that the licensing authority
    "shall have regard to any observations submitted to them".
    I fear that an obligation on the licensing authority to hear in person every individual who objects to an application would pose a substantial burden on the authority. Indeed, I suspect that in the Soho area the effect might be that some premises could continue in operation for much longer than would otherwise be the case, simply because of the demands placed on the authority by the need to hear objectors in person. It could also be argued that, if objectors were given the right to be heard, one ought also, in equity, to afford the same right to those who wish to speak in support of an application. I am not aware of any precedent in licensing matters for the provision suggested by my hon. Friends. I believe that such arrangements are appropriate only in the kind of full-scale local inquiry that we associate with a proposed motorway or similar development.
    I suggest to my hon. Friends that there is no reason to think that the voice of the local community will not be heard in the absence of a right for each individual objector to appear before the licensing authority. We should avoid imposing on local authorities what might prove an onerous burden, probably to little purpose, and might possibly even frustrate for some time the purposes of the legislation.
    I assume that the purpose of amendment (i), proposed by the right hon. Member for Lewisham, East and his hon. Friends, is to make it more difficult to challenge an authority's decision to refuse an application for a licence by reason of paragraph 11(3)(c). If that is so, the amendment is either unnecessary or a source of confusion. It is unnecessary in that an authority that is acting reasonably will not need the protection of the words in the amendment. Moreover, in so far as it suggests to local authorities that whether they are acting reasonably is for them alone to decide, it would cause confusion. If the amendment were carried it might encourage local authorities to adopt an unreasonable attitude in their operation of paragraph 11(3)(c) and to refuse applications on grounds that could not be sustained on appeal.
    In amendment (j) my hon. Friends the Members for Essex, South-East and for Peterborough seek to introduce substantial objections by local residents as a ground for refusal of a licence. The licensing authority is required by paragraph 9(12) to have regard to the objections that it receives to an application for a licence. The substance of
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    objections could well be relevant to the decision of a licensing authority to refuse an application on the ground, for example, that it
    "would be inappropriate, having regard … to the character of the relevant locality"
    or that it considers that the number of sex establishments in that locality would be excessive.
    In that sense, the licensing authority is clearly obliged to have regard to substantial objections. However, I do not believe that it would be wise or appropriate for licensing decisions to be taken, as I think is probably the intention of the amendment, solely on the ground of the number of objections received. The purpose of providing a scheme whereby objections may be lodged is that those objections may contain matters that are relevant to the criteria on which an application must be judged.
    To do otherwise would turn the licensing scheme into a head-counting exercise, with objectors—and, in equity, supporters—concerned only with the number of signatures that can be secured on petitions. I do not believe that that could be reconciled with the carefully drawn criteria provided in paragraph 11. I repeat, however, that I am sure that the weight of local opinion would play an important part. In principle, therefore, I feel that the amendment, which to my mind is also somewhat ambiguous, should not be accepted.
    Amendment (k), is in the names of the right hon. Member for Lewisham, East and his hon. Friends. The Government have given a good deal of thought to the appropriate penalties for offences created by the schedule. We believe that the most appropriate and effective penalty would be one that reflected the high financial rewards associated with the activities involved. For that reason we have provided an exceptional maximum penalty of £5,000 on summary conviction.
    We believe that the provision of a power of imprisonment would be difficult to reconcile with the general need to reserve such powers for the more serious offences. This is particularly important when new offences are being created. In this connection I remind the right hon. Gentleman and the hon. Member for Halifax (Dr. Summerskill), first, of the remarks of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) in the debate on Her Majesty's prisons on 2 December. Referring to the policy of reducing maximum sentences, the right hon. Member for Sparkbrook said:
    "We shall convince the public of the efficacy of that policy … only if we examine the purposes of imprisonment in a more rational and objective way than they have been examined in the past. We must move away from the idea that sentences must inevitably and always be either a fine or a custodial sentence."—[Official Report, 2 December 1981; Vol. 14, c. 279.]
    Perhaps even more relevant are the words of the hon. Member for Halifax, who supports the amendment today, in relation to the Indecent Displays (Control) Bill on 1 May 1981, when she said:
    "It is now the established official Opposition view that, wherever possible, offenders should not be sent to prison if that can be avoided …
    In introducing new legislation with new penalties, we must study the matter in the context of the serious prison crisis".—[Official Report, 1 May 1981; Vol. 3, c. 1056–57.]
    Dr. Shirley Summerskill: I thought that the Minister might raise this aspect of the Opposition's policy of keeping people out of prison. He himself has said, however, that people in the business of sex establishments are making vast amounts of money. He may believe that

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    the fine provided will frighten or deter them, or that they will find it difficult to pay, but we do not believe that it will have any of those effects. It is a booming industry making a great deal of money, and such a fine will have no effect at all on these people. If the Government were to raise the fine to a sum that would really deter and frighten them off, imprisonment would not need to be considered. I hope that that will be done when the Bill goes to the House of Lords.
    Mr. Raison: I am glad that the hon. Lady seems to be backing away from the proposition that a prison sentence is an appropriate penalty. I think that the House will agree, as the hon. Lady says, that these people are making, or hoping to make, a great deal of money out of this business. If they transgress the law, the place to hit them is in their pockets. I think that that is common sense. The question thus becomes one of the size of the fine. As I have said, the Government are proposing an unusally heavy fine of £5,000, and we believe that it is right to do so. It is worth remindig the House that if sex shop owners persist in unlawful activities they may be prosecuted time and again and suffer a series of fines.
    There is one other element to which we must pay regard. As I understand it, if one moves to still higher fines, it may be argued that it would not be appropriate for these offences to be dealt with in magistrates courts. We believe that that is the best place to deal with them, particularly in the interests of speed. Whether such cases would appropriately be dealt with in that way would be put to the test if we decided upon a heavier fine. We therefore believe that we have reached the correct decision in this respect, and I hope that on reflection the House will agree.
    I have tried to explain why we have brought forward these proposals and to allay the very understandable concern of those who dislike the whole business and wish that we did not have to deal with it in legislation of this kind. I appreciate how deeply and properly my hon. Friends and Opposition Members are concerned about this phenomenon, which is widely disliked, but I hope that on reflection the House will feel that it is right to bring in a licensing scheme of this kind.
    I hope that the House will accept that the words "licensing scheme" do not imply that it is a scheme designed to legalise or permit, but rather one that is designed to control these activities. The use of the word "licence" to imply irresponsibility and permissiveness is clearly not appropriate in this case. This measure will directly reduce the harm and damage caused by the proliferation of sex shops and by the placing of such shops in the wrong type of location.
    I therefore hope that the House will accept that our approach is right. I felt it right to go through the arguments that have been put in the debate. I hope that after giving careful consideration to what I and others have said the House will feel that we are on the right course and will support the proposals.
    Mr. Moyle: I rise to speak first from the Opposition Benches by agreement with my hon. Friends the Members for Halifax (Dr. Summerskill) and South Shields (Dr. Clark), who are leading for the Opposition on the Bill, as this is a general debate on the Government's new clause 1 and new schedule and the proposed amendments, three of which are in my name supported by my hon. Friends the Members for Halifax and South Shields.
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    I wish to make some general comments about new clause 1 and Government amendment No. 70, which is the new schedule. I support the new clause, which empowers local authorities to license sex shops, or to refuse a licence if they feel that that is appropriate. I hope that that power will be used frequently. My support is not without one or two reservations to which I shall come later, but I believe that the new clause and the new schedule are necessary.
    Hitherto, such shops have been confined to city centres, but they are now beginning to spread to the suburbs, and to become far more obvious to ordinary people, and to be capable of causing considerable offence. Not surprisingly, they arouse strong feelings. They outrage the moralists among us. They also arouse fears among those who do not necessarily take such a moral stand because they may attract undesirable types and possibly have an impact on criminal activities and sexual assaults in the area. Finally, they arouse the opposition of the militant feminists among us who fear that they promote a role for women as objects of pleasure rather than as rounded personalities in our society.
    Under the existing law these shops are dealt with rather like a greengrocer's. If premises have been granted planning permission for use as a shop, a sex shop can be opened there without prior notice or anything of that sort. No planning permission is needed. Just as they may be used as a butcher's shop, an ironmonger's or a greengrocer's, so those premises can be used as a se) shop. At present, there is far less control of these premises than, for example, an off licence.
    These provisions do not stop sex shops, but they allow for local authority licensing. Therefore, they make possible a public debate on behalf of the citizens affected before these shops are established. We can then decide whether they are wanted at all, whether there are too many and whether they will be offensive when set up. In addition, because of the opportunity for the licence to be called in and renewed, there is an incentive for the shops to be run with care and discretion.
    I hope that local authorities will ensure maximum publicity for all the applications they receive under the new clause and the accompanying new schedule so that the maximum public debate takes place about these premises before they are established or not. I am glad to note the provisions in paragraph 9(7)(a) and (b), which provide for publicity. I hope that local authorities will not consider themselves bound by the minimum commitment to publicity, but will do their utmost to ensure that applications are well and truly considered by everyone who wants to take part in the debate before an application is granted.
    5.15 pm
    I turn to the amendments. Amendment (k) to Government amendment No. 70 stands in my name and the names of my hon. Friends the Members for South Shields and Halifax. I do not intend to speak at length on this amendment, because the case for it was put beautifully, succinctly and clearly by my hon. Friend the Member for Halifax when she intervened in the Minister's speech. It is not necessary to add to the case that she put forward.
    I am sorry that the Government cannot accept my hon. Friend's argument, but I hope that the points she put

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    forward will be considered. Perhaps the Government will change their mind and take action at a later stage of the Bill.
    The object of amendment (f) to Government amendment No. 70 is to prevent sex shops selling or dealing in articles in any way stimulating or encouraging cruelty or violence. The basis of the definition of "sex shop" in the new schedule is any premises where sex articles or other things are purveyed in one form or another for encouraging or stimulating acts of violence or cruelty. I paraphrase the definition, but that is what local authorities will be given the power to license.
    Sex shops may be denied a licence because they are purveying articles or things designed to promote or stimulate cruelty. It also follows by implication in the legislation that the sale of such implements designed for sexual violence or the infliction of sexual cruelty may be licensed. It says so explicitly in the new schedule. As sex in this context is almost entirely physical, the Bill envisages the sale of, or dealing in, implements directed towards the promotion of physical violence or cruelty among certain sections of the population. Do the Government really know what they are doing? Have we really thought the whole thing through?
    The last time I agreed with the Daily Express was when it wrote its last anti-Common Market editorial. Therefore, my agreement with the Daily Express does not happen every day of my life. Yesterday, it contained an editorial with which I agreed. As my agreement with that newspaper is such an unusual event, I shall indulge myself by quoting a paragraph of that editorial for the edification of the House. It states:
    "The inevitable effect of having sadistic and masochistic equipment for sale by official licence will be to increase the sale, and use, of such equipment which will, equally inevitably, be used to hurt, mutilate and corrupt the young, the foolish, the vulnerable and the weak."
    I am sure that that is absolutely true. We must stop it. Until we have had more time for reflection on these matters I am prepared to allow the sale of articles concerned with force and restraint in sexual activity, because there is an element of ambiguity in the meaning of both words—perhaps not much, but I want to be as tolerant as possible.
    I am not opposing the display of material that may lead to cruelty or violence in a sexual context, because it is difficult to separate the sort of display that is meant to give an artistic message in a properly constructed artistic production from the sexual connotations that we are now discussing.
    In the dictionary that I consulted, "cruelty" means the "infliction of suffering". It also included in the definition the word "merciless". "Violence" was considered to be
    "very great force in action … unlawfully to hurt or harm".
    Those dictionary definitions may not necessarily be adopted by the courts when considering the interpretation of this legislation, but they show the general drift of the English Ianguage and what we, as a House of Commons, will be putting our names to if we allow the new schedule to go through unamended.
    The prime reason for the existence of the House is to protect the citizens of Britain from the infliction of violence and cruelty. For example, if a man gets a kick out of branding prostitutes, he might be able to go to a sex
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    shop and purchase a branding iron to inflict injuries on prostitutes. That is an example of the sort of thing which could easily be allowed under the schedule as it stands.
    There may be other Acts controlling the sale of implements in this area, but if the schedule goes through unamended there will be a clash between the words in those Acts and the licensing provisions under the schedule. One does not know, and the Minister does not know, what view the courts will take of those provisions.
    Mr. Douglas Hogg: I understand why the right hon. Gentleman wants to restrict the ability of shops to sell these articles. In paragraph 5(7) of the schedule, as constituted, there is a power to impose conditions. Perhaps that power is sufficient to meet his requirements.
    Mr. Moyle: I am not content with the imposing of conditions on the sale of implements which deal in violence and cruelty. There ought to be an absolute prohibition on the purveying of such articles through this sort of shop
    The Minister commented upon my illogicality. I am in favour of bringing into the Bill dealing in implements which may inflict sexual cruelty or violence. If not, they will be dealt with on the same basis as potatoes and brussels sprouts. As they have been brought into the Bill by means of the schedule, I am in favour of an absolute prohibition on the licensing of shops which sell those types of implements.
    The draftsman might find it very difficult to combine the idea of the sale of implements capable of inflicting the pain involved in sado-masochistic activities with the actual prevention of cruelty and violence. There may be a considerable drafting problem. If so, the sale of sadomasochistic implements through shops of this sort will have to be stopped until we can find a better way of tackling the problem.
    The permissive society allows us all to be free to condemn activities which we feel to be inappropriate. We try not to use the force of the law to stop people from enjoying their own lives in their own ways. However, there is a limit to that, too. Damage or harm may result to our fellow citizens as a result of people having the freedom to enjoy their own lives in their own way. When we get to the point where the House of Commons is willing to bless the sale of or dealing in articles which can inflict physical violence and cruelty on our fellow citizens, we have not only reached the frontiers of the permissive society; we have stepped over them. We are on very dangerous ground.
    The last amendment in my name and the names of my hon. Friends is a probing amendment. I am putting it forward to draw the Government's attention to the problem. I want to find out whether the power conferred on the authority by the proposed new schedule is an absolute one within the terms of paragraph 11 and its various sub-paragraphs, or whether it is a power which has to be exercised with reasonableness, such as might be challenged in a court of law. Can any of the powers of licensing by the local authority be challenged on the grounds of reasonableness? If so, the licensing authority will have to show that it is behaving reasonably. Experience shows that that test may thwart the whole operation of the legislation that we are discussing.
    For a local authority to decide whether it is acting reasonably in refusing permission, it may need to have

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    recourse to the courts, and that is very expensive. My borough council has had experience of this in trying to administer the Gaming Act 1978. It can refuse a gaming establishment a licence if it thinks that it is reasonable so to do. That Act—the last Gaming Act—was passed before the present Secretary of State for the Environment became involved in local authority finances.
    We are all aware that resort to the courts is expensive. The only way in which case law on reasonableness could be built up would be by taking people to court. That would cost the local authority money. Most local authorities these days do not feel that they have the money to take gaming establishments to court, so they do not go to court, and the operation of the Gaming Act 1978 is greatly frustrated. I should like the Minister to consider whether the operation of the Bill may be frustrated in a similar way unless a controlling provision of the sort that I have suggested in my amendment is written into the new schedule.
    I am not asking the Minister necessarily to accept my amendment; I simply want him to turn his mind to the problem. It may be that, with the best will in the world, even if he accepts our views concerning substantial fines, the measure will become very difficult to operate because of the lack or local government finance.
    I hope the Government will think again about what the Minister said in presenting the case for the new clause and the new schedule. I do not think that we shall want to press the matter to a Division, provided that the Government give us assurances that between now and the later stages of the Bill they will consider these problems with a view to seeing whether they can take suitable action.
    Sir Bernard Braine: I am much obliged to the Minister for giving answers to a speech that I have not yet made to arguments that I have not yet advanced. I must tell him that I am not deterred. I think we are both agreed on one thing. There can be no doubt about the pressing need to stop the proliferation of sex shops. The are now springing up like poisonous fungi all over the country. Judging by the press—and in particular the local press—from north to south and from east to west there has been a strong and growing reaction against their development.
    It is not simply that people's instincts make them revolt against the filth peddled in sex shops, degrading the people who peddle it and the people for whom it is peddled. In the view of the communities most closely affected, such establishments degrade their neighbourhoods.
    Two such establishments have opened in largely residential areas in my constituency. One of them is situated in a narrow, busy high road close to a primary school. Parents, teachers and residents are rightly outraged that there can be no effective control over such establishments and that this sort of thing can happen with impunity. They were shocked to find that the local authority, to which they turned, was powerless. Like other hon. Members, I have been urging my right hon. Friend for some time to introduce legislation to deal with the matter once and for all. I warmly welcomed the Government's undertaking, therefore, to use the opportunity of the Bill to provide effective control.
    5.30 pm
    I was not aware of what was proposed until last Saturday. That left little time for amendments to be put down and for the proper scrutiny of a matter which is supremely important to our constituents. Now we have
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    seen it, the proposal falls far short of what many of us were entitled to expect. We have before us proposals for licensing—let us not run away from the wordߞor permitting sex shops and, in certain circumstances, for waiving even that requirement.
    I could scarcely believe my eyes when I read clauses 2 and 3. A sex shop or a sex cinema is defined as a place where material is sold or moving pictures are shown that are intended to stimulate or encourage not merely sexual activity—if it had stopped at that point we would not have worried too much about it—but acts of force, restraint, violence and cruelty associated with sexual activity. It is a novel idea, is it not, that encouragement of violence and cruelty in sexual activity, hitherto regarded by the vast majority of decent citizens as criminal, should be singled out and permitted in establishments where licences have been obtained?
    Mr. Douglas Hogg: My hon. Friend is not right. The provisions in new clause 1 are without prejudice to the existing criminal law. Nothing in the Bill renders lawful what is presently unlawful.
    Sir Bernard Braine: That is my hon. Friend's fourth intervention in the debate. I have been a Member of Parliament for a long time. It is not likely that I would have read the Bill and omitted to spot that provision. All that my hon. Friend's intervention has done is to lengthen my speech. I shall turn to that matter in due course and show that, for once, my hon. Friend is not correct.
    The right hon. Member for Lewisham, East (Mr. Moyle) is right. We wish to see such activity stopped once and for all. The word "licence", in plain English, means that something is permitted subject to a piece of paper being provided. The Government should have banned altogether the portrayal of violence and cruelty and the sale of material designed to encourage such activity. They have not done so. It is proposed, therefore, that we shall write into our law, for all citizens to heed, that such depravity is permissible in certain circumstances. As one of my constituents said to me yesterday, "The Home Office must have taken leave of its senses."
    Of course, clause 25 provides that, where any such activity is clearly unlawful under the existing law, it remains so. If the activity could lead to violence that ends with someone's death—which is murder—the clause would not be necessary because we know that muder is unlawful. My hon. Friend the Member for Grantham (Mr. Hogg) is right to say that what was unlawful before will remain so. That is a great comfort. However, we must ask whether the sale of such material is unlawful in every case. Unfortunately, because of the ineffectiveness of our obscenity laws, some of this activity is not unlawful. The Home Office and the police know that that is so.
    Hon. Members may recall some cases where juries have failed to convict because of the confusion in the law over which successive Governments have presided and have not had the courage to tackle. I need not remind the House that the solution propounded by the unfortunate Williams committee was decisively rejected by both Houses. It was rejected by this House last autumn—
    Mr. Alexander W. Lyon: It has never been decided.
    Sir Bernard Braine: The ideas have been rejected.
    Mr. Lyon: You mean that you do not like them.
    Mr. Deputy Speaker (Mr. Bernard Weatherill): Order.
    Sir Bernard Braine: I do not mind the intervention. I have great respect for the hon. Gentleman.
    Mr. Deputy Speaker: My worry is that the hon. Gentleman was accusing me of not liking the ideas.
    Mr. Lyon: I apologise for interjecting from a sedentary position. The ineptitude of the remark rather riled me.
    Sir Bernard Braine: I freely forgive the hon. Gentleman on your behalf, Mr. Deputy Speaker.
    I do not wish to be hard, because I can see the Government's difficulty. They wish to respond to the genuine anxiety that was expressed in Committee. They believe that the Bill gives them an opportunity to take at least one step in the direction of bringing a serious problem under control. I do not agree with that. What they have set out to do is not enough. Astonishingly, they even provide an exemption from licensing in clause 6, which in my view provides an open door to corruption. It may be asked whether there is an alternative to giving local authorities a simple power to license. It might be argued that they will be able to refuse a licence or that they need not renew one that has already been issued, and would that not end the sex shop menace?
    The pornographers already established in this highly lucrative trade do not seem to think so. The lid was taken off about a fortnight ago by Mr. Patrick Sergeant, the distinguished city editor of the Daily Mail. He quoted a man described as the highest paid company chairman in Britain who drew £325,000 in salary last year and pension contributions—he is only 32 years old—of £418,000, and whose chain of sex shops earned £2 million last year and is expected to earn £3.5 million this year.
    Dr. Summerskill: Does the hon. Gentleman agree that a fine imposed on such a person would be like water running off a duck's back?
    Sir Bernard Braine: The hon. Lady has made an extremely valuable point. Mr. Sergeant goes further and sets out what this man has openly asserted:
    "Sex will be the growth industry of the 'eighties just as betting shops were in the 'sixties, and casinos in the 'seventies. Councils will be able to license sex shops later this year.… I am sitting on a goldmine. … We do lose stock from police raids but it's not a major problem. We build it into our costs and so the public end up paying more than they should. Our profit margins are high."
    Those people are laughing all the way to the bank. As the hon. Lady and the right hon. Member for Lewisham, East have made plain, the punishments proposed in the Bill are derisory in the face of the vast and increasing profits made out of this filthy trade. Here we have a licence to print money on a scale that exists nowhere else in Britain.
    If we do not press the amendments, but allow the Bill to go forward, subject to certain assurances from the Minister, some tolerance may have to be exercised for some time, but licensing sex shops is bad in principle because it implies social and, indeed, parliamentary approval of a fundamentally corrupt and corrupting enterprise.
    Licensing is bad in principle, too, because pornography relies for its effect on the degradation of women, and for that reason it is specifically designed to undermine society. Because the powers in the Bill allow for sex shops to flourish in areas where local authorities, for one reason or
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    another, will not refuse a licence or are prepared to issue waivers, this vicious trade will be more concentrated. That is a likely effect of the Bill.
    The Bill does not make it possible for a local authority to close down all shops in its area forthwith. It does not make it clear that a local authority can refuse to tolerate the existence of such establishments. For that reason, one can imagine the pornographers going to court and arguing that the refusal of all applications in a local authority's area is unreasonable behaviour because Parliament has enacted a licensing scheme. It will be argued that Parliament has said not that all shops may be closed down; merely that in certain circumstances a licence can be refused. I can envisage clever lawyers advancing that argument in the courts. They would say that if Parliament had intended to close all sex shops in a certain town or city, it could have done so, but it had chosen to do otherwise.
    There is one way out of the problem for my right hon. Friend the Minister of State. Instead of trying to anticipate my arguments, he should have waited, listened to what all hon. Members had to say, given an assurance that the Government had had second thoughts and that the opportunity would be taken in another place to stiffen up the proposals and give local authorities the power to clamp down on this evil trade. If my right hon. Friend agrees to do that, I am prepared not to press the amendments to a Division. My hon. Friend the Member for Peterborough (Dr. Mawhinney) will express his own view on that shortly. My attitude to the amendments, therefore, will turn on what my right hon. Friend has to say before the conclusion of the debate.
    Mr. Alexander W. Lyon: All hon. Members recognise the nuisance presented by sex shops. I recognise the nuisance, because there is a sex shop belonging to Conegate Ltd in the middle of my constituency which is an eye sore to all the residents in the neighbourhood and which has caused great offence. Even greater offence was caused by Conegate's writing to the local newspaper and asking residents whether they would like a few more. That sort of cheek must be stopped, and I hope that the Bill will stop it.
    Most of our problems would have been solved if the recommendations of the Williams committee had been implemented. I do not recollect the House taking a decision about them. Successive Governments have avoided this area, and the Williams committee presented us with a first-class opportunity to legislate over the whole area and to deal with the problem of balance in our society towards matters such as sex shops. Not having done that, the Government have resorted to a post hoc reaction to the agitation on Second Reading by presenting the new schedule. I do not oppose the schedule, as far as it goes. We need some way of controlling sex shops. We cannot control them by interfering with the town planning regulations on change of use, because local authority planners have no criteria for knowing what sort of difficulties will be caused by a sex shop. Different criteria apply when considering whether to have a fish and chip shop or the problems caused by an off-licence.
    The issues arising from sex shops are largely the moral agitations that are whipped up in the area about the products that the shops purvey, and whether the local area wants them. A local authority can make that type of judgment but it cannot apply to sex shops the judgments that it makes on planning applications. Therefore, I am in

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    favour of licensing in the manner suggested in the schedule, but against licensing through the town planning provisions.
    5.45 pm
    As I said in a number of interventions and as other hon. Members have mentioned, we have been here before. At the end of the 1950s there was considerable agitation to do something about the scandal of illegal betting shops. The then Conservative Government produced licensing proposals which they said were intended to deal with the problem by restricting the growth in the number of betting shops.
    Initially, the magistrates—not the local authorities—did their best to restrict the growth by licensing the existing illegal shops but not allowing an increase. There was so much money involved that in every case the betting shop proprietors decided to appeal to the quarter sessions. The quarter sessions—in this case it would he the Crown court—made the final decision. There was no appeal to the High Court against the decision of the quarter sessions. The chairmen of quarter sessions—here it would be the Crown court judge—were divorced from the pressure of public opinion and took a different view about the need for licensing. The general thesis of decisions by quarter sessions chairmen throughout the country was "Parliament has said that it is all right because it has accepted that there can be some betting shops. Therefore, the only issue is whether we think, according to the criteria in the Bill, that it is right to allow this particular one."
    The one criterion that was rejected was that a public demand had to be shown. The fact that an area seemed to have a large number of betting shops was no answer on the demand point, because the new shop might be willing to compete effectively. Therefore, a large number of betting shop applications were allowed.
    Mr. Rees-Davies: The hon. Gentleman is right in part, and I do not dispute that. However, public demand did have to be established. I was involved with several hundred such cases. The essence was to establish by evidence that there was a demand that was not satisfied in the locality. However, that was a matter of illegal gaming which was made legal. The aspects that arise in this Bill are different.
    Mr. Lyon: I was also involved in a number of such cases and I can tell the hon. and learned Gentleman that, although that was his experience at quarter sessions, my experience was that the factor of demand had to be shown—in the sense that two or three people could be called to say that a betting shop was needed—but to equate it, demonstrating that demand had already been saturated by the existing betting offices, was no answer to the application, because the chairman would argue "There may be enough offices to deal with every individual who wants to go, but he may want to go to a different office. There ought to be proper competition."
    Therefore, because there was so much money involved, people kept making applications. The result was that, instead of limiting the growth of betting shops, that legislation swelled the number until there was a betting shop in almost every street in the country. It was only when demand was thoroughly saturated, and some shops were not making money, that the number of betting offices declined.
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    Unless we do something about paragraph 11 that is what will happen. We want to reduce the number of sex shops. The local authority, under public pressure initially, will refuse the licence. The case will then be taken to the Crown court, which is more likely to grant a licence. Once such a pattern is begun, the local authority will not feel able to refuse a licence after a Crown court judge has rejected its argument in relation to an earlier application. That will undermine the edifice.
    We can deal with the problem by restricting the right of appeal against a local authority's decision on how many sex shops it wants in its area. If a local authority decides that it does not want any sex shops at all, that should be a matter for the local authority and not for a Crown court judge. There should be no right of appeal against that part of the criteria. I could make that provision in an appropriate amendment to paragraph 11(3)(c). I did riot table such an amendment because I did not realise that we were to discuss the Bill until it was too late. The hon. Member for Essex, South-East (Sir B. Braine) has tabled such an amendment. We might wish to vote on it to show the nature of our opposition. If we vote on amendment (g) and the House carries it, the provision might not be suitable for the general shape of the schedule, but it could be changed in the Lords. In any event, we should then have expressed our view.
    The issue is fundamental. If we let the opportunity go by we shall leave the same loophole as we left in the Gaming Bill. I hope that the Government have second thoughts. I am sure that there in no real difference of view between us. The Minister's only argument was that a local authority must be able to justify its refusal within the criteria in the Bill. He said that a local authority should not have the right simply to say that it did not want any sex shops in its area. I take the same view as a number of other hon. Members and ask "Why not?" The issue is primarily one for local authority expertise. A local authority reflects the shape of public opinion in an area. If the public do not want any sex shops in an area and make that plain to the local authority, there is no reason why there should he any sex shops in the area.
    We are dealing with civil liberties. Some people would like a sex shop nearby so that they can buy their dirty books. We have had arguments about that in the past. We are talking of a small minority. A local authority might feel strongly that that minority must be overruled because of the will of the majority. We can and should take such decisions from time to time. It is a political decision. It is a decision for a local authority, not for a Crown court judge. No Crown court judge can make such a decision, but I do not see why the local authority should not have the opportunity.
    The schedule should contain a provision to allow a local authority to decide not to have any sex shops in its area. I believe that that is the intention of amendment (g) and perhaps we should approve it.
    Mr. Teddy Taylor: I wish to make a brief speech because the main points have been expressed already. Despite what was said by the hon. Member for York (Mr. Lyon) and my hon. Friend the Member for Essex, South-East (Sir B. Braine), it would be a mistake for the Home Secretary to gain the impression that there is not a great deal of gratitude that something is being done. Many hon. Members on both sides have pressed for something to be done. They have been told

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    consistently by Home Secretaries from both sides of the House that it was impracticable and that nothing could be done. It would be a shame if the Minister thought that there was not in the House and outside great appreciation that something is being done.
    Having had the doubtful pleasure of Messrs. Conegate establishing a sex shop on the seafront at Southend in a particularly pleasant area, I am aware of the public's total frustration. People believe that nothing could be done and that it was useless to go to a councillor or a Member of Parliament because the law made no provision for control of any type.
    The hon. Member for York was a little unfair when he compared sex shops with betting shops. At the time of that legislation, betting shops were unlawful and we moved towards licensing and approval. Nothing controls sex shops and there is nothing to prevent a person from setting up such a shop, so long as the premises have planning permission for the retail trade.
    I have referred to Messrs Conegate. I declare an interest because the gentleman concerned owes me £100. I had the pleasure of appearing on a television programme in which he sought to show that the people of Southend wanted a sex shop. I said that they did not and challenged him to conduct a referendum on the issue. I said that I would give him £100 if he was right so long as he would give me £100 if he was wrong. We have exchanged six letters and I am afraid that he has not responded to the challenge. He rejected any referendum and said that the only test that he would accept was if I resigned my seat and fought it against a sex shop candidate. That shows that the gentleman is a rather devious person who is making a great deal of money. I doubt whether I shall ever see that £100.
    I have three questions to ask the Minister. First, what does the Minister have in mind in terms of a reasonable fee for a local authority to charge for a licence application? Most applications and refusals will result in court action which could be expensive for a local authority. May we have an assurance that he believes it reasonable for the fee to take account of the fact that most refusals will have to go to court and involve the local authority in considerable expense? It would be sad if councils gave in too easily or did not respond simply because of excessive legal costs.
    Secondly, is the Minister certain that paragraph 11(3) (c) of the new schedule would not mean that a local authority would not be able to refuse the first sex shop licence in its area? That section states that a ground for refusal can be
    "that the number of sex establishments in the relevant locality at the time the application is made is equal to or exceeds the number which the authority consider is appropriate for that locality."
    That might create difficulties for a council which wishes to refuse the first licence. It should be taken into account.
    Paragraph I1(3)(a) states that there is a ground for refusing a licence to an individual if
    "the applicant is unsuitable … by reason of having been convicted of an offence or for any other reason."
    Is that deliberately wide to make it easier for a council to reject an application? I have never seen a provision drawn so widely. It gives full right and authority for a council to reject an application by an individual for any reason whatsoever. I wonder how an individual can appeal if a local authority can turn him down for any reason.
    The Government have been restricted by the short title of the Bill. I share the views of those who would like to
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    ban sex shops, but that would be an unusual step to take in such a Bill. A licensing arrangement is about as far as the Bill can be stretched. I welcome the measure as a first specific move. I hope that consideration will be given later to the broader issues.
    I hope that the Minister will answer my three questions. In spite of all the complaints from Mrs. Whitehouse and others, the Minister should accept that in Southend and elsewhere people realise that the Government are making it possible for local authorities to take action. Individuals will be able to make representations which could result in action. I congratulate the Government on doing something and giving the people some power.(g)
    6 pm
    Mr. William Pitt: Sex shops and sex cinemas are sad and coarsening places, especially because of some of the wares they sell and films they show. We should not believe that it is only the militant feminists among women who are offended by the very presence of sex shops. My wife, daughter and secretary are far from militant but they are all nevertheless appalled by the coarsening that society has received from sex shops. That is the risk and why I support the Bill in principle.
    However, I am a little puzzled, as was the hon. Member for Southend, East (Mr. Taylor), why this should have been brought in as an amendment to an existing Bill rather than being a separate Bill. Some situations require a specific Bill to control establishments. The Bill does not really control them because it does not set out to do so, but is permissive.
    I am concerned, as are other hon. Members, particularly about paragraph 11. There was a proliferation of betting shops in the 1950s and 1960s and I draw hon. Members' attention to the proliferation of bingo and amusement parlours over the past 12 to 18 months. For example, a petition of over 2,000 in the Norbury area to prevent such a shop failed to achieve its objective, even after Croydon council raised specific objections to it. The matter went to the Crown court and on that basis was allowed. Unless there is a specific interdiction against this sort of thing and a power for local authorities to refuse sex shops, the same thing will happen. It will not be said that there are already one or two in the high street; it will be done on the same basis as the proliferation of betting shops and bingo parlours.
    Establishments will be taken to the Crown court and it will not matter whether 2,000 or 200,000 local residents do not want a shop in their localities. It will depend on the Crown court's judgment, and, in most cases, I fear that that will be in favour of a sex shop being opened.
    Amendment (f) is excellent and I recommend that the House support it this evening or that the Minister take it on board for inclusion in another place because it certainly tightens the situation.
    Amendment (k) deals with fines. We know that the director of such a company earns a salary of £350,000 a year and an astronomical figure in pension rights. He is only in his early thirties and remarkably fortunate. A fine of £5,000 or £10,000, would be but a drop in the ocean and petty cash to him. We must have a sanction on people operating these establishments illegally and against the public's interests. The sanction of a fine on a man earning that sort of salary is impotent and useless. We must provide a greater sanction. Therefore, I suggest that the

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    House supports amendment (k) or that the Minister gives careful consideration to putting a similar provision into the Bill in another place.
    In principle, my party supports the Bill. It is high time that such legislation was put into operation. We are sorry that that was not done before. My hon. Friend the Member for Liverpool, Edge Hill (Mr. Alton) recently showed me a sex shop which had opened in his constituency very close to a school. In my constituency, another sex shop has opened close to a secondary school. If there had been sufficiently effective legislation to prevent that, those two sex shops would not have materialised.
    We welcome the amendment, although we suggest that it is slightly too late and is not strong enough to stop the proliferation of sex shops which has already occurred in Soho and the centres of other cities and which I fear may, as a result of this legislation, take place elsewhere in Britain.
    Mr. Rees-Davies: I am sad that the former leader of the Liberal Party did not remain with us because, while we heard the hon. Member for Croydon, South, it would have been fascinating to hear the Liberal leader—
    Mr. Pitt: My constituency is Croydon, North-West.
    Mr. Rees-Davies: Croydon, South is inhabited by one of my great personal friends who is not here today and I was thinking of him by mistake. It is a pity that the former Liberal leader is not here because he would have been a great ally of the hon. Member for York (Mr. Lyon). It would have been hilarious to hear his arguments on why there should not be a sex shop in the Orkneys.
    The real question, which I shall deal with later, is that there are localities throughout England, Wales and Scotland which could legitimately and properly say, in the minutes of a council meeting, that they did not want any sex shops. There have been many misunderstandings this afternoon, but I agree with a good part of the argument advanced by the hon. Member for York when he dealt with what is a political decision rather than what is a decision for the courts.
    Nobody in political life expects much gratitude, but it is a bit hard on the Government, who have been pressed for the past 12 months to introduce effective control over the placing, siting and existence of sex shops—not their contents—to be attacked because they have not gone further.
    One must explain why the Government could not conceivably have gone further. Some 10 years ago, I remember going into this matter a great deal with my right hon. and learned Friend the present Attorney-General and we wrote a pamphlet on it. The first stage one deals with is indecent display. Thanks to the admirable efforts of my hon. Friend the Member for Hove (Mr. Sainsbury), that was finally turned into law during last year under the Indecent Displays (Control) Act. As that Bill went through, it became plain that, while we would stop the indecent displays, there was a spawning of sex shops, not only in Soho and Victoria, but, by a firm called Conegate, all over the country. I remember The Birmingham Post raising that with me in March or April last year. That company opened shops in Leeds and 70 throughout the country.
    Consequently, strong representations were made by all hon. Members. I found it a little surprising to have to make a representation in my own area, when a sex shop was
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    being opened in Margate. It might have one sex shop, but we would not want a spawn of them. We certainly would not want them in the more salubrious quarters of Broadstairs and Ramsgate, or in villages and other places.
    Let us follow what happens. After indecent display has been dealt with, the question of sex shops arises. Finally, the Government will finally be forced, in due course, to deal with pornography. Therefore, there are three separate aspects of the legislation. This one deals with the second and not with the contents of the shops.
    I appreciate the feelings of my hon. Friend the Member for Essex, South-East (Sir B. Braine) and others that the Bill ought to, but does not, contain such provisions What happens? The measure we are dealing with would have been best dealt with by the Department of the Environment through the Town Planning Use Classes Order. I suggested that, but it was turned down by my right hon. Friend the Secretary of State for the Environment. It has been suggested that it was turned down because town planning deals with sites, but that is not true. As a town planning counsellor of many years standing, I know that the issue involves not only sites but policy objectives, including the attitude of the local electorate. It would have been possible to say that someone who wanted to run a sex shop had to get planning permission. Again, there would have been an appeal to the Minister.
    The difficulty lies in the definition of "sex shop". The Bill seeks to prevent the proliferation of sex shops but unfortunately that means that a "sex shop" must be defined. The new schedule begins by giving the meaning of "sex cinema". However, we all have different ideas about the meaning of "sex cinema". If we all sat down and wrote out our definitions, there would be 15 or 20 different versions. What is a "sex shop"? A sex shop may contain only magazines. However, many sell the paraphernalia of sex, such as vibrators and other objects, both lewd and otherwise. There is a massive trade in such goods.
    The House may well want to stop such trade, but this is not the occasion. The Bill is not concerned with the contents of such shops. When dealing with hard porn, I hope that the Government will find a way of introducing a measure to deal with that. However, that will prove even more difficult. Any definition of pornography immediately involves matters such as those set out in paragraph 2(2)(ii) of the new schedule and including acts of force, bondage, violence, masochism and sadism. We must immediately consider which of those we wish to stop and where the line is to be drawn.
    Some years ago, when the late Reginald Maudling was Home Secretary, my right hon. and learned Friend the Attorney-General and I saw him about our definitions. The Home Office told us that it was sorry and that we had tried hard, but that our definitions were not good enough. No one has come up with a definition to stop hard porn. One day, I hope that we shall come up with a solution, but this is not the occasion. It is not right to criticise the Government for a brave and noble effort to enact a Bill designed solely to meet public pressure.
    Unfortunately, definitions must be given. I received a letter from the Festival of Light and I support its attitude. Indeed, I support Mary Whitehouse's approach to many aspects of the issue and she knows it well. However, both Mary Whitehouse and the Festival of Light are wrong. They do not understand that we are not giving permission, but enabling a local authority—if it sees fit—to license

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    establishments which, for the purposes of definition, have had to be defined as "sex cinemas" or "sex establishments". That is all that the Bill does.
    The definitions are set out in unattractive verbiage, and conditions have been laid down. Local authorities must understand that it would be impossible to allow sex shops on the condition that they exclude all the paraphernalia. If local authorities did that they could be thrown out of court immediately. They cannot do that. What is the difficulty? I am sure that hon. members do not want small tobacconists that sell Playboy and some of the other magazines to be outlawed or treated as sex shops. Many tobacconists sell a large number of sex magazines. We do not want them to be considered as sex shops. Therefore, we must be clear. The local authority can then make a decision.
    Local authorities must consider the various aspects carefully. For example, they must consider planning. Although it may be suitable to site a sex shop in the centre of a town, it is quite unsuitable for it to be sited in a residential area. In Leeds, Conegate sited a sex shop slap next door to a residential area. I am delighted to say that all the ladies of Leeds picketed the shop. That is the type of picketing that I support, not the other sort.
    6.15 pm
    Mr. John Sever: Why does the hon. and learned Gentleman think that it may be more acceptable to site such premises in the centres of our cities? Surely his argument in respect of other areas is equally, if not more, valid in respect of city centres. Thousands of people may pass the shop in the high street every day.
    Mr. Rees-Davies: People expect to find the broader aspects of life in areas such as Soho and Paddington. I am sure that there is an area in Birmingham where people with that taste expect to be able to find a few naughty books to read. However, such shops should not be foisted upon people, for example, in the Orkneys. I am worried because much of the trade has moved into the countryside. It may be necessary to consider carefully the remarks made by the hon. Member for York (Mr. Lyon). Paragraph 11(3)(c) of the new schedule says:
    "that the number of sex establishments in the relevant locality at the time the application is made is equal to or exceeds the number which the authority consider is appropriate for that locality."
    It follows that there must be a number more than zero—and therefore one—that the authority considers appropriate. I am afraid that that is so.
    It may be said that a local authority should find something appropriate for the locality, but the distribution of district councils varies enormously. The whole of Thanet comes under Thanet district council, and the council covers Margate, Broadstairs, Ramsgate, Birchington and Westgate. A local authority might propose to allow one sex shop in Margate and one in Ramsgate and say that that was sufficient for the locality, but what about an area that does not want a sex shop? Are judicial or political decisions involved? That is always the question when it comes to gaming and sex. The answer is that it is a mix. In many country areas, local authorities should be entitled to say that they do not want any sex shops. It is easy to state that, but it is not easy to make the
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    decision. It will be interesting to hear what the other place thinks. It is very good on this type of thing and on mulling over the problems that may arise.
    I am sorry that my hon. Friend the Member for Essex, South-East is not here. I had hoped that my argument would persuade him. I had the temerity to raise this matter only because of my 12 to 15 years' experience of working in this sphere.
    The analogy of betting shops was nearly relevant. Betting shops were allowed because betting had to be taken off the streets. We had no option. I remenber working on the Bill. A limit had to be set and that was done on the basis of what was reasonable for the locality. I agree with the hon. Member for York that in some instances the Crown courts made the wrong decision. I agree that in certain cases they could easily make a wrong decision under the Bill. It is difficult for a recorder or a judge to judge such matters without considerable local knowledge, but, as the House knows, he does not have to. Evidence is called before him which gives him the knowledge and the local feeling, which he has to gauge.
    On balance—although I am open to persuasion—I believe that the Government should consider whether local authorities should have the right to outlaw sex shops altogether. That might mean that the Government will want to ask local authorities and district councils for their opinions. Perhaps the Minister can say whether local authorities and district councils have said that they are satisfied with the Bill as it stands, or whether they want the opportunity not to have sex shops in their areas.
    I am sorry to have taken up the time of the House but I hope that what I have said clarifies a subject which can be easily confused yet on which there is almost a complete consensus both inside and outside the House.
    Mr. Reg Race: I have news for the hon. and learned Member for Thanet, West (Mr. Rees-Davies). Conegate does not have 70 sex shops. It has 120. I have that on the authority of the retail director of Conegate, who wrote to me on 22 January. That illustrates how rapidly these establishments are mushrooming.
    I support the Government's new clause and the new schedule, because I strongly object, as do my constituents, to the way in which sex shops portray women. I shall dwell for a moment on that aspect, because it was in my constituency that the recent case of the Tottenham rapist occurred. He has now been convicted by the courts and sent to Broadmoor. That chap physically assaulted and raped a dozen women in Tottenham, Wood Green and Hornsey. My constituents believe that that sort of behaviour is encouraged by the establishment of sex shops, which generate such attitudes towards women.
    Sex shops portray women as simply available for sex, as mindless bodies with no views of their own and no position in life other than as sex objects to be used for the pleasure of men. I reject that completely. I am against the establishment of sex shops in areas where the local community does not want them.
    I take issue with hon. Members who have referred to the sort of areas in which it might not be appropriate to site sex shops. It is not only in the more salubrious areas—the Highgates and the Muswell Hills of my own borough of Haringey—but in areas such as Tottenham that local residents do not want these shops. They want the local authority to have a direct measure of control over what happens in their community.

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    I strongly support, as, I suspect, do many others, the point made by my hon. Friend the Member for York (Mr. Lyon). He said that local authorities must have the opportunity to say "No" to all sex shops in their areas. I hope that the Minister will consider that point carefully and seek to amend the schedule to make it a political decision so that local people will feel that those whom they elect to look after their community have a direct say in controlling what happens there.
    When dealing with this matter, as well as considering the point of view of women we must consider civil liberties and the arguments about censorship. I have no doubt that the balance of the argument comes down strongly on the side of those who wish to control these establishments. In this case the civil liberties argument is not strong.
    I shall give an example of the way in which Conegate Ltd. has been operating. It shows the sort of people with whom we are dealing. The firm now has 120 shops in the country and a head office in Wardour Street in Soho. It has other shops in Lewisham, in the constituency of my right hon. Friend the Member for Lewisham, East (Mr. Moyle), in Camden Road in Camden, Tottenham and elsewhere.
    In the shop in Tottenham, a magazine entitled "Rapier" is sold. It is hard to believe that that shop would have the cheek to sell a magazine entitled "Rapier" in an area where there have just been many physical attacks on women by the Tottenham rapist and a number of other people. My constituents are extremely worried. They want the right to walk the streets in the area without fear of the threat of physical assault. I know people who have been attacked twice in one evening. I do not want to see the encouragement of that activity by the sale of such magazines in shops.
    Conegate Ltd. provides opportunities for prostitutes to operate. The shop in Lewisham was recently raided by the police and was the subject of a court case. When two women who had been accused of daubing the shop with paint were acquitted by the magistrates court it was revealed in the national newspapers that Conegate had been operating a list of sexual contacts in the shop, the heading of which was
    "Phone them and … them".
    Mr. Deputy Speaker: Order.
    Mr. Race: When I passed the firm's shop in Camden today I noticed a sign outside stating that a contact list was available inside. Therefore, it is not a straightforward retail establishment, but one that is seeking to purvey the sale of a commodity.
    Those people also lie about the way in which the shops operate. I received a letter from Conegate dated 22 January, signed by Mr. B. J. Richards, the retail director. I do not know whether he is the man who is receiving £300,000 a year and who has been referred in the debate, but he said that the firm tried to cause the least possible offence to the local community. He said that the shop front was plain and that it would not cause offence to local people, although it was located near a girls' secondary school. That is untrue. The front of the shop in Tottenham, as at the head office in Wardour Street, is a black window with a portrayal of a scantily clad woman, which one looks at through a keyhole. On the outside of the shop there is also a description of the material that is sold inside. That could hardly be regarded as a plain front causing no offence to local people. Moreover, that shop in Tottenham is just by a bus stop.
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    I can show how cheeky the firm is by quoting a passage from Mr. Richards' letter:
    "We have been informed by neighbouring traders that the net effect of their sales"
    —that is, the sex shop sales—
    "has been positive as a result of our shops drawing into an area people who would not otherwise have visited their shops".
    That shows the extent to which the firm will go to defend its commercial interests. It lies about the shops and the frontages, and it talks in a way that is completely misleading.
    6.30 pm
    I want to say a word about the attitude of the Haringey local authority to the development that has taken place in Tottenham. On 12 January the planning and development committee of the London borough of Haringey considered objections to the siting of the Conegate shop in Tottenham High Road. The planning officer reported to the planning and development committee that the local authority had no power to prevent the shop from being opened because the owners of the shop did not have to apply for planning permission. Thus, the local authority had no control. That is what the new schedule and clause seek to alter. The planning committee decided by resolution that it did not wish to have any sex shops in Haringey. It was a unanimous decision of all the councillors who were present, both Labour and Conservative. The local authority should have the power to prevent sex shops from opening in that borough.
    These shops are a gross insult to women, and they are big business. They make a lot of money. Their owners will stop at nothing to prevent interference by the Government or local authorities. Indeed, in the letter that I quoted from Conegate, the retail director says that he does not believe that Parliament would seek to control the existence of sex shops.
    Another spokesman for the company, Mr. David Reid, was quoted in the local newspaper, the Tottenham and Wood Green Weekly Herald, as saying:
    "Women have exploited their sexuality from time immemorial. Every time they wear make-up they are exploiting their sex, and they exploit men by allowing them to have sex in exchange for a new coat or something. The average man is conned by women, and I do not believe our material degrades women or exploits them sexually, as protesters would have us believe".
    What a remarkable quote that is from an allegedly responsible spokesman for a major company, and how outrageous it is that we have to put up with these shops in our locality.
    I strongly support what the Government are seeking to do. This action was urged on them by Labour Members in Committee. I hope that the House this evening will pass the new schedule and clause. I hope, too, that the Minister will give a concrete assurance that the proposals will be amended in another place so that local authorities have the power to ensure that no sex shops are present in any area. In my view, it is the democratic right of elected local councillors to take that type of decision. If the matter goes to the courts, there is the prospect of a proliferation of these shops throughout the country, which no one wants.
    Dr. Brian Mawhinney: I, too. welcome the new clause and commend the Government on tabling it in response to considerable pressure not only from Members of Parliament but from constituents. I had an Adjournment debate on the matter earlier this Session,

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    and it is a pleasure to see the change that has taken place during the past weeks. I congratulate the Government on their initiative.
    There has been debate about whether this is a control or a licence measure. I agree with my right hon. Friend the Minister that it is a control measure. If there were no sex shops and we were passing this measure, it would be a licence, because it would encourage people to set up something that is not already present. However, the plague is already with us and it is getting bigger. The hon. Member for Wood Green (Mr. Race) was right when he said that Conegate now has 120 shops, and it shows no signs of stopping. If we pass this legislation tonight we shall be controlling and restricting, rather than giving a permissive licence. It is important to say that and support the Government's view on the matter.
    The measure is permissive in one respect, in that it permits local authorities to decide for themselves whether to become licensing authorities. That, too, is right. I do not like sex shops and associated activities of that nature, but we should not indulge in censorship. To force local authorities to take certain actions would be a measure of censorship. Tonight we are seeking to restore the balance between the rights of people who have and the rights of those who have not and who do not wish to be subjected to the proximity of a sex shop.
    Nevertheless, having said that, and having stood alongside my right hon. Friend the Minister, I must add that there has been public disquiet during the past few days about some of the provisions of the schedule. I want to draw my right hon. Friend's attention to one or two of the matters which form the basis of the amendment which my hon. Friend the Member for Essex, South-East (Sir B. Braine) and I have tabled, on which my hon. Friend has already spoken so eloquently.
    We are concerned about the reference in the schedule to
    "acts of force, restraint, violence or cruelty".
    My right hon. Friend did not say, but I think hon. Members understand, that he has been put in this dilemma because of the inadequacy of the 1959 obscenity law. The difficulty is that we have no assurance, because of the interpretation of that law, that these sado-masochistic acts, which we so deplore, would be found illegal under that legislation if prosecutions took place. We find ourselves saying that we do not like these things, we wish that they were illegal under other legislation, but that frankly we are not sure, so we have to put them in here. By so doing, we give the impression, if not the actuality, that, as a House, we are sanctioning these things. My right hon. Friend rightly said that we are not sanctioning them. He should accept that the disquiet that I am expressing is not an idiosyncratic disquiet but one that has been expressed widely during the past few days. If the Bill has been misunderstood, it has been misunderstood by many people.
    There is a genuine problem. We tabled the amendment not because we want to make the control any less tight—we want the control to be as tight as possible—but because we want to give the impression that we are not in some way condoning these activities. My right hon. Friend understood our intention. I suggest that it would help the
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    House if he undertook to have another look at the wording with a view not to loosening it, but to resolving some of the ambiguities.
    First, it is not clear to me what is the difference between sexual activity, which is under paragraph 2(1)(a)(i), and acts of force, and so on, associated with sexual activity, under paragraph 2(1)(a)(ii). If an act is associated with sexual activity, is it not sexual activity? In other words, is it necessary to have two definitions?
    Secondly, it would be helpful if my right hon. Friend would look at a way to try to indicate that it is only those acts of force, restraint, violence and cruelty which may be legal under other legislation that would be the basis for the granting of a licence.
    Thirdly, it would be helpful if my right hon. Friend were to put paragraph 25 at the beginning. It has been slipped in at the end. Of course, it provides legal cover, but it does nothing to dispel the misunderstanding. If my right hon. Friend were willing to consider, even in the other place, giving more prominence to the fact that there is nothing in the Bill that would render legal anything which was otherwise illegal, that would go some way to help to dispel any misunderstanding.
    I turn now to the other amendment that we tabled, which has occasioned so much debate and met with complete agreement, as my right hon. Friend will have noticed, on both sides of the House. I refer to amendment (g), in line 97, at end insert—
    "Provided that nothing in this Schedule contained shall impose upon the appropriate authority a duty to grant or renew any licence."
    The hon. Member for York (Mr. Lyon) has already adequately dealt with this point, but I should like to add one piece of information which has not been mentioned for my right hon. Friend's consideration. We come back to this disreputable business under the title of Conegate. A senior executive of that firm is now openly boasting that his firm will undermine the whole intent of the Bill by taking action in the High Court against any authority which says it will not have any sex shops in its locality. It will use the argument that my hon. Friend the Member for Essex, South-East has already advanced—that if Parliament had wanted it to be impossible for there to be any sex shops, it would have said so, and that, as it has not said so, we must presume that there will be some. That course of action is already being openly advocated by senior executives of that firm, which already controls 120 of these shops in this country.
    My right hon. Friend does not need to consider for very long before realising that if 15 or 20 local authorities in this country were taken to the High Court simultaneously, the effect on other local authorities would be pressure to introduce a number of sex shops, whether or not they wanted them, in order to avoid this type of prolonged and expensive legal manoeuvring. In that case the whole purpose of the Bill would be undermined. It would be undermined legitimately and legally, but this would show the loophole which many of us believe exists in the schedule.
    I commend our amendment to my right hon. Friend. It may be that the wording is not right, but if he were to indicate that he is willing to consider it with a view to making suggestions in another place that in itself would be satisfactory.
    I put it to him that he has not explained why he should be reluctant to accept an interpretation of "locality" which

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    embraces the whole of a local authority's area and why he should be willing to accept an interpretation of "locality" as only part of the area. "Locality" ought surely to be acceptable in large measure as well as in small measure. If so, I think that it would undermine the point that my right hon. Friend was seeking to make earlier.
    Turning to our amendment (h), I understand what my right hon. Friend said about allowing objectors to appear personally. It could be argued that their local councillors can appear on their behalf. It cannot, however, be argued, I think, that local councillors could appear on behalf of the chief officer of police. Therefore, if my right hon. Friend is not willing to accept the amendment in toto, perhaps before the Bill arrives at another place he will consider the possibility of at least allowing the chief officer of police to appear before the local authority to give evidence. That would certainly not be a time-consuming matter.
    6.45 pm
    Finally, on amendment (j), my right hon. Friend has listed three reasons why a local authority may refuse to grant or renew a licence, and we have suggested a fourth—
    "substantial objections by residents in the relevant locality."
    The wording in the schedule is:
    "having regard—

    (i) to the character of the relevant locality; or

    (ii) to the use to which any premises in the vicinity are put; or

    (iii) to the layout, character or condition of the premises".

    It does not deal with the change to the character of the locality which might be occasioned by the introduction of a sex shop. 1t is only the people in the locality who are able to talk about the change of character.
    Lest my right hon. Friend thinks I am talking in generalities, let me give one example. He knows, because we have discussed it, the great unhappiness there is in Peterborough about a sex shop which has been opened by the famous Conegate group. The shop is beside a school, as seems to be typical; beside a church, as seems to be typical; and in a residential area, as seems to be typical. Consequently, house values in that area have dropped. It might be possible to argue that the character of a locality was such that it was acceptable for a sex shop to be opened, but the change of character is equally important, and only the local residents can testify to that. Therefore, I commend our amendment to my right hon. Friend in the hope that he will give it further consideration.
    We welcome this measure. The Government are to be commended on it. We support the Bill. Any suggestions that we have made for change are entirely in the spirit in which the Government have moved the new clause and in an attempt to take it further and to close the loopholes that are perceived. We in no way intend to be critical of the measure, which is to be welcomed.
    Dr. SummerskillIn Committee we reached fairly general agreement—
    Mr. R. C. Mitchell: I take it, Mr. Deputy Speaker, that your calling the Front Bench speaker does not mean that you are ending the debate, and that there will be opportunities for other hon. Members to speak.
    Mr. Deputy Speaker (Mr. Ernest Armstrong): Yes, the hon. Member is quite right; I cannot close the debate.
    Dr. Summerskill: In Committee we reached fairly general agreement that there was a case for making it
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    possible for local authorities to license sex establishments, and the Minister agreed to look at the matter. His proposals have taken us all somewhat by surprise, partly because of their length and complexity and partly because they were available for us to see only a short time before the beginning of this debate. Clearly, far more consideration should be given by the Minster to these proposals when they go to the other place.
    The criticisms of the principle of licensing sex establishments are similar to the reservations and misgivings which were attached to the Indecent Displays (Control) Bill. It was very difficult to predict exactly what the effect of that legislation would be, and I believe that no one can accurately predict what the effect of this legislation will be. It is suggested that these licences could give sex establishments the stamp of respectability, that the licence, being a mark of local authority approval, could lead to their proliferation, as has been prophesied by certain sex establishment owners. The fact that the industry is booming and prosperous could make it possible for every high street to have a licensed sex establishment along with the betting shop and the public house.
    Alternatively, it is suggested that the provision could send sex establishments underground and make matters worse. We must wait and see how the legislation operates. I believe that every hon. Member hopes that it will make it possible for local authorities to control, by having a powerful mechanism to do so, the location and number of such establishments in a particular area.
    One matter has united speakers on both sides in the debate. A strong feeling has been expressed that the Bill is muddled and vague on what we all wish to see, which is that local authorities should have the power, which must be clearly expressed in the Bill, to say that they do riot want any sex establishments in their areas. That includes authorities in whose areas no establishments now exist. They must be able to maintain that position. It is not clear that under the Bill they have the power to do so. The Minister may believe that they do, but it is not clear to hon. Members who have taken part in the debate. The matter must be clarified when the Bill goes to another place.
    I strongly support amendment (f). Restricting sex establishments with licensing is one thing, but we propose something else, which is that no licence should be available for the purpose of "encouraging violence or cruelty". The Bill makes possible the sale of articles stimulating or encouraging acts of violence or cruelty by the licensing of that very activity. We must exclude the licensing of such premises, as the amendment provides.
    We do not want to ban all sex establishments, but the House can and should refuse to condone the licensing of establishments which sell articles encouraging acts of violence or cruelty. We are not making their sale unlawful, but that does not mean that we must legitimise their sale and allow the licensing of premises selling them. If the House does not pass the amendment it will be condoning that activity in the pursuit of violence and cruelty.
    Parliament should take this opportunity to state clearly that we find unacceptable the encouragement within an Act of any kind of violence or cruelty. In our legislation we should establish standards of behaviour, and I do not believe that this part of the Bill does that.
    The fact that in the Bill the violence or cruelty are associated with sexual activity is no reason or excuse for licensing the premises. Nor is the fact that the articles are being sold lawfully any excuse. The acts of violence and

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    cruelty referred to in the Bill have been condemned by several women's organisations, but they have also rightly been condemned by men. The degradation of women degrades men, too. Violence and cruelty should be condemned by both sexes, wherever they occur and for whatever reason. They have no place in the Bill. These activities should on no account be seen to be condoned by the House.
    Mr. Raison: The hon. Lady must answer the following crucial question. If the activities to which she objects, as many people do, are nevertheless legal, if they are not a breach of the law, which is the case, how can it benefit society to say that we shall have a scheme for controlling the other sexual matters that the Lady is prepared to see in the Bill but that we are not prepared to have a scheme for controlling the matters to which she takes objection?
    The consequence of the hon. Lady's point of view would be that sex shops could sell without any limitation the items to which she objects most strongly. The point of a licensing scheme is that, although I entirely accept that it does not ban those items, it introduces a means of controlling them. That must surely be a gain.
    Dr. Summerskill: An activity or pursuit can be legal and lawful, but that does not mean that we are under an obligation to condone it and allow it to be licensed by a local authority. The two matters are separate. The Minister is unable to appreciate the obvious point. I found his brief reason for not accepting amendment (f), in the name of my right hon. Friend the Member for Lewisham, East (Mr. Moyle), inadequate and unconvincing. I hope that the right hon. Gentleman will now respond to my right hon. Friend's eloquent speech, which was reasonable and persuasive. The Minister must reconsider the matter before the Bill goes to another place.
    Mr. Raison: I am aware that other hon. Members wish to speak, but I think it would be helpful if I intervened now, after the speech of the hon. Member for Halifax (Dr. Summerskill). The debate will be interrupted at 7 o'clock and I do not pretend that it will be easy in the few minutes before then to answer all the many important points that have been made.
    I think that I can fairly claim that there is general support for our provision, but hon. Members on both sides of the House would like to go further. They want in particular to try to find ways to use the provision as a way
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    to ban altogether activities which they understandably dislike. That is perhaps the most important theme of those who are not completely happy about the Bill.
    The provision cannot be a vehicle for reforming the general law of obscenity. The point was well made by my hon. Friend the Member for Southend, East (Mr. Taylor), who has strong views about the matter but who recognised in his kind words that we are not concerned with the complete reform of the law of obscenity. We are using a Local Government (Miscellaneous Provisions) Bill to set up a scheme by which local authorities can license—by which I mean control—activities which are offensive to many people. That is a clear gain, and it is what we must be about. We cannot go much beyond that.
    I find it difficult to know how to argue further with the hon. Member for Halifax about the point which she has just made. I cannot understand the logic of her position. I suppose that she is saying that she would rather make a moral gesture, saying "We shall have nothing to do with these things in legislation", at the price of allowing them to operate as they are operating now, without any check. We are introducing a means by which local authorities can control activities which are distasteful to their constituents and to many of ours.
    I see that the hon. Lady is pointing to her right hon. Friend the Member for Lewisham, East (Mr. Moyle), thereby claiming to share illogicality with him.
    It will take a little time to try to answer the other points that have been made in the debate. The hon. Lady spoke about the proposed penalty in the Bill. It is an abnormally high fine, but that is not the end of the story. It has been argued that those who run sex shops are very rich and that to them £5,000 is a flea bite. As I tried to say earlier, the fine will be repeated if they continue to commit offences.
    I have also been asked what happens if those running sex shops go on operating in spite of having been fined. Another remedy which is available would be to obtain an injunction to prevent them from carrying on. If an injunction was obtained to prevent them carrying on their activities after they had lost the case then they would be in contempt of court and would be liable to imprisonment.
    It is superficial to think that the fine of £5,000, which is high, is necessarily the end of the matter when people are patently and flagrantly determined to persist in their operations.
    It being Seven o'clock, and there being private business set down by The CHAIRMAN OF WAYS AND MEANS under Standing Order No. 7 (Time for taking Private Business), further Proceedings stood postponed.

    Lloyd's Bill (By Order)
    Order for consideration, as amended, read
    7 pm
    Mr. Deputy Speaker (Mr. Ernest Armstrong): Before I call the hon. Member for Harrow, Central (Mr. Grant) to move the motion, I must inform the House that Mr. Speaker has not selected the amendment. Also, he has asked me to remind hon. Members of the advice that he gave to them earlier this year about voting on the Bill if they have a direct pecuniary interest in it. He said:
    "On the question of a pecuniary interest, I am of the opinion that if any right hon. or hon. Member has the slighest doubt about the matter he should not vote. If he votes, he takes the risk that the House itself could disallow the vote afterwards.
    Mr. Speaker also said:
    "However, it is the right of every hon. Member, whether or not he is a member of Lloyd's, to cast his vote if a closure motion is proposed and is accepted by the Chair. No financial interest can be involved in that procedure. That would be a matter of public business"—[Official Report], 24 March 1981; Vol. 1, c. 812–59.]
    Mr. Kenneth Lewis: On a point of order, Mr. Deputy Speaker. The esteemed institution that is Lloyd's, when it wakes up tomorrow morning, will be rather surprised to find that discussion on its Bill is sandwiched between a debate that started on sex shops and is not yet concluded but will carry on at 10 o'clock.
    Could you give any guidance, Mr. Deputy Speaker? As we have to stop at 10 o'clock to make way for the sex shop debate again, can you tell us whether we are likely to have another period of debate for this important Private Bill, or perhaps another two occasions, as we have a number of amendments to be discussed and there is little time in three hours? How many more periods are we likely to have on the Bill? It is important that we know that.
    Mr. Deputy Speaker: It is not a matter on which I can advise the House at this stage. It depends on the progress we make.
    7.2 pm
    Mr. Anthony Grant: May I perhaps raise the tone of debate from the level of sex shops? I beg to move, That the Bill, as amended, be now considered.
    It is with sadness that I find myself standing today in the place of the late Sir Graham Page, who was the original sponsor of the Bill. He was held in high esteem in all parts of the House for his industry and his meticulous care, and he was held in affection for his good humour and honesty of purpose. He will be greatly missed as a colleague and a friend.
    I know that the House will wish to proceed as rapidly as possible to move on to amendments and it is both unnecessary and out of order for me to repeat the debate of March last year when the Second Reading was passed by a majority of 164.
    However, I think that it would help the House in its consideration if I described the subsequent progress of the Bill. Following the Second Reading being opposed by petitioners, the Bill was considered over five days by a Committee consisting of two hon. Members from each side of the House. Three basic issues were involved. In the first the petitioner sought a single election for the proposed council of Lloyd's, but evidence was not offered on the subject and the Committee rejected the proposed amendment. Therefore, I need not dwell on it.
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    The second issue was raised by the petitioners who contended that Lloyd's proposals on the divestment issue did not go far enough. The Lloyd's proposals were that the whole subject of the measure of separation between brokers and managing underwriting agents should be left to the future council to decide. The petitioners contended that divestment should be made mandatory by Parliament. That was also the view of some hon. Members. The Committee expressed the opinion that the Bill should be amended to provide for complete divestment between brokers and underwriters.
    Therefore, Lloyd's referred this to a specially convened meeting of its members. By a large majority, some 13,000 to 1,000, it was agreed to amend so that there would be divestment by brokers of their interest in managing agents and vice versa. This was reported to the parliamentary Committee, which was chaired by the hon. Member for Oldham, West (Mr. Meacher) on 20 July, and the Committee accepted the Lloyd's amendment.
    On 14 December 1981 Lloyd's returned to the Committee with the proposed amendments on divestment, which the Committee approved, and which are now clauses 10 to 12. One firm of Lloyd's brokers—Alexander Howden—petitioned against the new proposals and for six days the Committee heard arguments for and against before finally deciding in favour of the provisions put forward by Lloyd's.
    I add here, because it is relevant, that on the last day the leading counsel for Alexander Howden said:
    "With the exception of the additional provisions on divestment the petitioners wholeheartedly share the general desire that the Bill ought to proceed. They recognise there is a serious need for it, and that it should make a very healthy and valuable contribution to the future health of Lloyd's."
    That is the view I hold, too, and I find it a little difficult to reconcile those words with the statement of objection put out by Alexander Howden today.
    This matter of divestment has been argued over for 11 days in Committee. I believe that the public expect an institution such as Lloyd's to be scrupulous over potential conflicts of interest and that is the purpose of the clauses.
    I turn to the third basic issue, the difficult question of restraint upon suit, or immunity as it is rather less accurately called. On this question there was much debate on Second Reading. Sir Graham Page gave an undertaking to the House—
    Mr. Roger Moate: On a point of order, Mr. Deputy Speaker. Understandably, my hon. Friend is making a fair introduction. However, he is referring to a number of matters which are the subject of new clauses or amendments, to which we shall be coming later. May I take it that any reference that he is now making w ill not preclude the debate or his dealing with these matters in similar terms when we come to the later stages?
    Mr. Deputy Speaker: We are considering whether the Bill be considered. Discussion of any item in the Bilt is in order.
    Mr. Grant: I am merely seeking to explain the position.
    The undertaking given by Sir Graham Page was to the effect that the restraint upon suit would be removed from the Bill and dealt with by a byelaw. However, during the course of the debate, it became clear that the House wished the matter to be dealt with by primary legislation. Lloyd's,

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    being in something of a quandary, put both alternative courses to the Committee which suggested that we should have primary legislation.
    Like Sir Graham Page, I am not a member of Lloyd's. I have no interest to declare. I came to this problem with a completely open mind—some would say a blank mind. I am instinctively suspicious of immunities. I understood the anxieties expressed on Second Reading. I shared some of them myself. I have also taken note of views subsequently expressed. It is natural that Parliament should look carefully into issues of this kind. We are concerned and responsible for the public at large.
    I should like to clarify one matter over which there has been misunderstanding. The public, that is to say, policyholders, are not affected by this provision. They can sue underwriters in the courts as they have always been able to do and as they will continue to be able to do. Their position will be strengthened by the powers given in the Bill to the council to maintain discipline and proper standards of conduct among brokers and underwriters for the protection of the public. If, however, the council is to exercise its powers speedily and effectively to prevent scandals, it must not be inhibited by the threat of lengthy litigation.
    At first glance, one inquires, as I did, why the position should be different from the Law Society, the General Medical Council or similar bodies. The answer is that they do not trade in the same way. Lloyd's trades throughout the world to the great benefit to our invisible earnings. Unlike other bodies, it is involved in what might be called the risk business. The widely publicised paralysis resulting from protracted litigation is avidly seized upon by competitors overseas and damages the reputation of Lloyd's.
    Mr. Clinton Davis: Is not another risk that Lloyd's is much more exposed to blackmailing actions simply because such actions would almost inevitably invite headlines and might initiate from organisations abroad which are attached to Lloyd's? Is this not an infinitely greater danger than the one to which the hon. Gentleman has rightly referred?
    Mr. Grant: I agree. I am grateful to the hon. Gentleman for drawing attention to the matter. Overseas competition in this market is ruthless. I am glad that the hon. Gentleman has alerted the House to the problem. I hear laughter from one of my hon. Friends. I do not think that anyone will disagree that Lloyd's is engaged in an international business that is highly competitive. Clause 14 was approved by the Committee following two days of argument.
    Mr. Moate: I apologise to my hon. Friend. Hon. Members find themselves in some predicament because we shall come to this specific debate later. My hon. Friend should advance stronger arguments than the fact that Lloyd's is a trading organisation. Anyone coming fresh to the debate would say that this was prima facie an argument for not giving it any specific immunity, but the very reverse.
    Mr. Grant: I shall advance many other arguments in favour of the clause. There is, however, a distinction that I seek to make. Bodies such as the Law Society, the Stock
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    Exchange and the General Medical Council do not have the immunity or restraint on trade. They do not indulge in risk-taking business throughout the world. Lloyd's is unique in this respect. Clause 14 was approved by the Committee after two days of argument. Its effect is that a limited circle of people, that is to say—
    Mr. Richard Shepherd: In what way does the committee of Lloyd's take risks overseas? Will the hon. Gentleman amplify that aspect of his remarks?
    Mr. Grant: We are talking about the society of Lloyd's, that is Lloyd's as a whole, which will have to bear a claim for damages. This is a point with which I shall deal.
    Mr. Shepherd rose—
    Mr. Grant: I should like to continue. I hope my hon. Friend will allow me to continue. The issue may then become clear.
    Sir Nicholas Bonsor: People overseas dealing with Lloyd's according to my understanding, would not be affected by the immunity clause. It only affects those who are members of the society.
    Mr. Grant: I can assure my hon. Friend that any litigation in Lloyd's is widely publicised. It is used overseas as a criticism of Lloyd's and as a reason for foreign competitors taking away the business. That is the plain fact. It is an experience that has been known over a number of years. —[An hon. Member: "Why not the Stock Exchange?") Because the Stock Exchange does not do that sort of trade. It is a different body.
    The effect of the clause is that a limited circle of people—the community of Lloyd's—are restrained from recovering damages from the society the members of Lloyd's—provided that the society acts within the confines of the Act and does not act in bad faith. I shall be moving an amendment to exempt from restraint damages arising as a result of a clerical or similar error. Lloyd's business is, after all, risk taking. It would change the whole character of unlimited personal liability if a member through litigation could pass on his losses to members as a whole.
    It is wrong to suppose that Lloyd's is being placed above the law. The review of the courts and the remedies of injunctions, declarations and the prerogative writs will still bite on Lloyd's. It is right that they should do so to ensure that the society is properly run within the law. I would welcome any advice that the Minister can offer on the question of judicial review and to what extent it will be available to people in these circumstances.
    It would be wrong to suggest—I know that my hon. Friends feels seriously about this point—that an individual member of Lloyd's will never suffer as a result of an act by the council. I believe that this is a remote contingency if the council is armed with the new powers of the Bill and excercises them responsibly. This remote possibility has to be balanced against the positive benefits that the clause will bring to the society and community of Lloyd's as a whole and to the public generally. On balance therefore, and after starting from a position of complete neutrality, I come to the firm conclusion that Lloyd's, the Fisher working party, which investigated the matter in great

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    depth, and the parliamentary Committee, consisting of Members of both sides of the House, are right on the matter.
    Mr. Tim Eggar: It is my understanding that the Fisher working party specifically did not go so far as the immunities outlined in the Bill but merely stated that the immunities should go so far as those outlined in the Companies Act.
    Mr. Grant: I shall check exactly what the Fisher report stated. It is clear that the provisions of the Companies Act are not adequate for the purposes that are necessary if the council is to do its work properly.
    Lloyd's is at all time ready to discuss that problem and the Bill has to pass through another place. What would be tragic—
    Mr. Richard Shepherd: Does my hon. Friend not agree that the only recommendation by Fisher for immunity for the society proceeds on the premise that Lloyd's might be inhibited in the task of self-regulation by fear of legal proceedings? Is he aware that this is the only reference made to the matter in the Fisher report? The report does not encompass the proposals contained in the Bill.
    Mr. Grant: The proposals before the House have been carefully considered by Lloyd's. Lloyd's put them before the parliamentary Committee.
    Mr. Shepherd: They are not Fisher proposals.
    Mr. Grant: That may be so. Lloyd's has been advised by learned counsel. The proposals have been wrangled over for a long time. They are far more limited than is sometimes suggested. I am satisfied that they are necessary if Lloyd's is to be able to pursue the task that it is given by the Bill properly and effectively in the interests of Lloyd's as a whole and the public.
    What would be a tragedy is that if all the work that has gone into the Bill were to be set at naught. A constitution of more than 100 years ago when there were fewer than 1,000 members of Lloyd's is wholly inappropriate when there are now 19,000. 1 must warn the House, in all seriousness, that if this measure does not reach the statute book there is virtually no chance of any other such Bill being passed in the lifetime of this Parliament. Lloyd's will continue to be hamstrung—to both its own and the nation's detriment.
    Mr. Moate: I genuinely apologise to my hon. Friend for intervening again, but it seems to me that he is coming to a peroration. During the forthcoming debate I suspect that a number of hon. Members will wish to ask specific questions not on the later new clause but on matters in the statement issued by the promoters. Will my hon. Friend seek the permission of the House, if he is successful in catching your eye, Mr. Deputy Speaker, to respond to those points later? That would save us interrupting now.
    Mr. Grant: I think that my hon. Friend the Member for Dorset, North (Mr. Baker), if he is fortunate enough to catch your eye, Mr. Deputy Speaker, will do his best to respond to any questions which may be asked.
    Mr. Richard Shepherd rose—
    Mr. Grant: My hon. Friend can make his speech in due course. In conclusion—
    Mr. Shepherd: My hon. Friend has reached his peroration.
    Mr. Grant: My hon. Friend has not yet heard my peroration. However, I give way.
    Mr. Shepherd: I am grateful to my hon. Friend for giving way as usual. Is he absolutely consvinced that the community of Lloyd's is assured that this is the right Bill? In responding to that point, will he comment on the resignation letter of Mr. Bob Kiln in Lloyd's List in which extremely serious reservations are expressed about the nature of the Bill, bearing in mind that Mr. Kiln was a member of the Committee of Lloyd's during almost the whole time that the Bill was going through Parliament?
    Mr. Grant: Mr. Kiln must speak for himself, but my advice is that he represents very much a minority point of view. That has been made clear in the votes and in all the information given to me by Lloyd's. I put it no higher than that, although, like all minority points of view, it has received disproportionate publicity, but that is the world in which we live.
    Lloyd's is a great institution of which we should properly be proud. It is seeking to put its house in order and then to get on more effectively with the business of writing international insurance and governing its affairs in a manner more fitting to the 1980s and beyond. The House should help Lloyd's in that worthy and honourable task.
    7.23 pm
    Mr. Archie Hamilton: We have come a long way since we first discussed the Bill. It is a pity that of the three main issues raised by my colleagues at the outset—fraud, divestment and immunity—only one, fraud, had been tackled by the Committee of Lloyd's in the spirit of compromise. Divestment was wrung out of Lloyd's by the Opposed Bill Committee, which I must congratulate on the part that it has played, because a situation in which brokers can run syndicates is clearly in complete conflict with commercial interests and should never have been allowed to go ahead. Unlike my hon. Friend the Member for Harrow, Central (Mr. Grant), 1 do not propose to be dragged into the issues of divestment and immunity, as they can be discussed at length when we consider the amendments.
    It is right now to look at the broad scope of the Bill and some of the other issues that have arisen. Lloyd's has argued that the Bill was approved by an overwhelming majority of the Wharncliffe meeting at the Albert Hall. I understand that the voting was 13,219 for and 57 against. That result was taken by Lloyd's as meaning that the whole Bill had been carefully read by all the members of Lloyd's and thus came to the conclusion that every item in the Bill was entirely satisfactory. It is not unknown for Members of Parliament not to read Bills carefully. Indeed, the majority of Bills that go through the House are not read carefully by all hon. Members. I do not wish to insult my hon. Friend the Member for Harrow, Central, but it is just conceivable—
    Sir Nicholas Bonsor: Is my hon. Friend aware that last year there were more than 65 pages of new legislation for every day that the House sat?
    Mr. Hamilton: I can well believe that. However, I shall not continue on that point. Let us face it. Hon. Members are paid to read Bills, but I venture to suggest that we often do not get round to that task It is a requirement that a member of Lloyd's should put up his capital, but not that he should read Bills, so it is

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    conceivable that the Bill was not read very accurately by the members of Lloyd's. It might therefore have been better if Lloyd's had had people other than the Committee of Lloyd's to advise it on what exactly the Bill contained. The voting might then have been somewhat different.
    Members of Lloyd's were assured that the Bill would give far greater powers of regulation to the committee, and who would disagree with that? In anyone's Ianguage, it must be a good thing for such a great institution as Lloyd's to have greater powers of self-regulation. I think that most hon. Members, certainly on the Conservative side, agree that self-regulation is the answer and that the last thing we want is Governments and Parliament interfering in what happens in these institutions.
    I do not believe that the members of Lloyd's looked at the small print. Tragically, it was only later that the External Names Association emerged and people with a somewhat contrary view to that of the Committee of Lloyd's appeared on the scene suggesting that members should hold on a bit and asking whether they really knew what they were voting for and whether they had looked at the detail of the Bill which was so important.
    That demonstrates how important it is that Members should be kept informed of what is happening. I believe that many Members of Parliament have benefited tremendously from the comments of outside bodies that lobby Parliament. They examine the detail of much of the legislation that goes through the House and are in a position to point out to us exactly what its consequences will be.
    This brings me to amendments Nos. 15 and 16, in the name of my hon. Friend the Member for Faversham (Mr. Moate), which have not been selected. They seek to add to schedule 1 as addresses or, to quote the words of the amendments, the "usual places of abode" so that not only the names but the addresses of members of Lloyd's would be on the register. Paragraph 1 reads:
    "The Council shall keep and maintain a Register to be revised as at the first day of July in each year (or such other day or days as the Council may by byelaw provide) which shall be divided into two parts and shall show in Part I thereof the names"—
    and here the words
    "and usual places of abode"
    would be added. Paragraph 1 continues:
    "of all those members of the Society who were classified as working members of the Society as at that date and in Part II thereof the names"—
    here the words
    "and usual places of abode"
    would again be added. The paragraph then continues:
    "of all those members of the Society who were classified as external members of the Society as at that date."
    There is another aspect to the business of printing people's addresses. I am not a member of Lloyd's and have no financial interest whatever in the organisation.
    Mr. Moate: No money.
    Mr. Hamilton: As my hon. Friend points out, I have no money either, which may be one reason why I am not a member of Lloyd's. I admit to having received the generous contribution of two very lavish lunches through the hospitality of the Committee of Lloyd's, but that is as far as my interest goes. It has been suggested to me, however, that if the addresses of members of Lloyd's appear on the register and the register is readily available, this could lead to abuse.
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    Two arguments arise in relation to the inclusion of addresses. Obviously, members of Lloyd's do not want their names to go on to mailing lists, as a result of which they receive a mass of undesirable advertising material through the post offering things that they do not want. At the same time, one must accept that if the External Names Association or any other organisation of that sort is to work effectively, it must have the names and addresses of the members, otherwise it will not be possible to contact them.
    Mr. Richard Shepherd: What about the listing of addresses? Clearly, membership of Lloyd's indicates a certain level of wealth. To publish a list of such names and addresses is an open invitation in this day and age when, unfortunately, we suffer from things such as terrorism. Terrorists and others could thereby identify these people and hold them to ransom. Perhaps that is not such a desirable objective.
    Mr. Richard Needham: On a point of order, Mr. Deputy Speaker. I am sorry to interrupt my hon. Friend, but is it in order to discuss amendments that have not been called?
    Mr. Deputy Speaker: It is in order to discuss anything contained in the Bill. This is a general discussion on whether the Bill should be considered.
    Mr. Hamilton: Thank you, Mr. Deputy Speaker, for your advice. I was referring to my amendments, which have not been selected, because I realised that it was unlikely that I would have another opportunity to discuss these important issues.
    Mr. Needham: Further to that point of order, Mr. Deputy Speaker. As these amendments are not in the Bill, how can it be in order for them to be discussed?
    Mr. Deputy Speaker: I am listening carefully to what the hon. Gentleman is saying. The question is whether it is related to what is in the Bill. Obviously, any amendment is so related.
    Mr. Moate: Further to that point of order, Mr. Deputy Speaker. If we are being asked to cosnsider whether the Bill should be considered, surely such matters are relevant if hon. Members consider that they should be in the Bill.
    Mr. Deputy Speaker: Anything related to the provisions in the Bill is in order, because this is a general discussion.
    Mr. Hamilton: Thank you, Mr. Deputy Speaker. I remind my hon. Friend the Member for Chippenham (Mr. Needham) that I was referring to paragraph 1 of schedule 1. It is pertinent to consider whether people's addresses are included in the schedule. It is an important point.
    I agree with my hon. Friend the Member for AldridgeBrownhills (Mr. Shepherd) that a number of Lloyd's members are people of significant wealth. Therefore, there could be great problems if the names on the register became available, particularly in this day and age when kidnapping, and so on, is so popular.
    If possible, responsible recognised organisations operating within the Lloyd's society should have access to these names and addresses, otherwise it will not be possible for the External Names Association to be the sort of organisation that I should like. It should be able to make available information about what is happening in Lloyd's

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    and should ensure that external names are well informed about what is happening generally in the Lloyd's community.
    Mr. Moate: The listing of the addresses is a real problem and poses a genuine dilemma. Am I not right in thinking that there have been instances—I think particularly of the Performing Right Society—where a member who felt distinctly under-privileged had great difficulty in securing the names and addresses of members whom he wished to canvass for legitimate reasons? I think I am correct in saying that one person went to court and after great difficulty secured the names and addresses. If I am right, there seem to be precedents for such information being made available, without its necessarily being presented to every aspiring burglar. Is there any strong argument why the names and addresses of Lloyd's external members should not also be available?
    Mr. Hamilton: I take my hon. Friend's point, but we would need some kind of regulation to ensure that access to the register was sought by a bona fide organisation working within the Lloyd's community.
    The question of information disturbed me on Second Reading. On the one hand, we have the working names—people on the inside track who have a good idea of what is going on—and on the other we have the exernal names. Very often those people are not in day-to-day contact or even year-to-year contact with what is going on in Lloyd's. It may be argued that they should keep in contact, but they are often the last to hear about problems when they arise. They probably do not pick up the gossip in the market place about someone going bust or some syndicate becoming extremely unreliable. They may not even be aware of the fact that their syndicate performance is declining compared with others.
    It is therefore important that this access to information is given to members of Lloyd's, be they working names or external names. That was one of the excellent concessions wrung out by the Opposed Bill Committee. I again congratulate that Committee on this important step forward.
    The Fisher report recommended that information should be made available. Paragraph 9.15 of the report said:
    "We recommend that the Council should keep under constant review the requirements for disclosure to prospective Names, and should make the necessary Bye-laws and keep them up to date. We recommend in particular:—

    (a) That the present instructions and recommendations (amended in the light of this report) should be made mandatory by Bye-law.

    (b) That the Council should prepare an informative brochure on the lines of the "Brochure for Applicants for Underwriting Membership", which Agents can give to people who inquire about Membership, i.e. at a much earlier stage than at present. (We see no reason why the contents of this brochure should be regarded as confidential).

    (c) That the same information should be supplied to all prospective Names, wherever they may reside.

    (d) That all Agents should be required to furnish to the Membership Department details of the terms and conditions which they offer, and that the Membership Department should compile a register which anyone who satisfes the Membership Department that he is seriously contemplating an application for Membership of a change of Agent could consult. (If our recommendations about standardization are accepted the register would have to contain only the provisions which are left to the discretion of the Agent. )"

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    It is remarkable that the Fisher report felt it necessary to go to those lengths. One would have thought that most of that information would be available to someone wanting to join Lloyd's. That is an indication of the secrecy with which the whole place has operated.

    The report went on to say

    "(e) That if our recommendations in Chapter 23 (Audit) are accepted, Agents should be required to supply in addition to the seven-year figures in the present form, the Report and Audited Accounts for the last seven years and for the open years.

    (f) That Agents should disclose to prospective Names their other business interests. A mere statement of transactions with associates (which is at present required) is not enough; there should be a statement of other companies in the group, particularly if the group contains an insurance broker or an insurance company."

    Paragraph 23.22 of the Fisher report continued:
    "We recommend that the Council should:— (a) either through the Audit Committee or a new Accounting Committee and, in any event, with the close involvement of outside expert advisers, lay down rules (in an Accounting and Audit Manual which could replace part of the information currently set out in the Underwriting Agents' Manual) as to the minimum information to be disclosed in Syndicate Accounts and the accounting standards and principals which shall be applied. These would need to be specifically designed to meet the circumstances of Lloyds and, although they would draw on the experience derived by the accountancy profession from application of the Second Schedule to the Companies Act 1967 and the various accounting and auditing standards which have been issued for the Accounts of companies, they would recognise the special features of the Lloyd's system—for example, the three year account period, the lapse of time between accepting a risk and the processing of the policy and premium through the L.P.S.O., the volume of reinsurance and the central importance of the Reinsurance to Close.
    The Manual would also contain a list of matters to which the auditors' attention should be specifically drawn and the form of audit certificate which should be required from the Syndicate auditors. While we see no difficulties in establishing the level of disclosure to be required in respect of such items as underwriting policy, the use of Binding Authorities, debtors, investments and expenses, including payments to Agents, we recognise that many auditors think that it is increasingly difficult to confirm that, in the auditors' opinion, the accounts give a 'true and fair view' because of the central importance of the adequacy of the Reinsurance to Close and the difficulty that an auditor has in confirming what is essentially an underwriting judgment. It is outside our brief to pursue this subject but we lay great importance on the need for the Council to take positive action to ensure that Syndicate Accounts are brought up to the standards required elsewhere for the accounts of agents and others who are handling, investing or dealing in other people's money."
    That refers to the great problem of precise accounting in Lloyd's, bearing in mind that one never knows whether all the outstanding claims have been closed off.
    The report continued:
    "(b) require Managing Agents and Underwriters"—
    Mr. Deputy Speaker: Order. The quotation is inordinately long. The hon. Gentleman should be making a speech, not just reading quotations.
    Mr. Hamilton: I very much accept your point, Mr. Deputy Speaker. It is, however, quite new for Lloyd's to accept the requirement to give this information. At the Opposed Bill Committee, Lloyd's actually undertook to implement all those proposals. It is important that we get the proposals on the record because they were not included in the Bill.
    Mr. Deputy Speaker: The proposals are on the record. The hon. Gentleman is quoting evidence from the Committee, as I understand it.
    Mr. Hamilton: The proposals are included in the record of the Opposed Bill Committee as paragraphs, but not as anything else. They were not read out at the Opposed Bill Committee because to do so would have taken too long. If that is sufficiently on the record of the House, the last thing that I want to do is to bore my hon. Friends.
    Would it be in order, Mr. Deputy Speaker, to draw your attention to what "Erskine May" says on page 995? It says:
    "Debate on the question for consideration of a private bill,… has been confined by rulings from the chair within narrower limits than the debate on second reading."
    Mr. Deputy Speaker: I am grateful for the hon. Gentleman's quotation.
    Mr. Hamilton: On the Opposed Bill Committee the lawyers acting for the Lloyd's Committee said:
    "It seems to us, and indeed to the Petitioners, that those provisions for making available information in such detail and to such an extent are closely linked to the divorce issue because the divorce issue is basically concerned with the importance of enabling Names and prospective Names to have the fullest information necessary for reaching decisions about their activities as Members of Lloyd's. The Petitioners and we feel that it would be an effective way to attain many of the objectives which might have been attained by a total divorce without any of the disadvantages which are apparent to us and we believe also to the Petitioners."
    Therefore, we can see that at the Opposed Bill Committee stage it was agreed that that would happen.
    There was an undertaking that
    "The Committee of Lloyd's will take all (reasonable) (proper) steps to ensure that the recommendations in paragraphs 9.15" which I have read out—
    "and 23.22"—
    it was at that point that I was brutally cut off in my prime—
    "of the Fisher report as to the availability of information are implemented by the Council, whether through the making of byelaws or otherwise, as soon as possible and in any event within"—
    and we should like to see the words changed to
    "within two years of Royal Assent"
    So we would see the requirement—
    Sir Anthony Royle: On a point of order, Mr. Deputy Speaker. Is it in order for an hon. Member to read a quotation for 14½ minutes? Should not
    hon. Members keep quotations to the usual short length?
    Mr. Deputy Speaker: The hon. Member for Epsom and Ewell (Mr. Hamilton) has not been out of order, although the House might deprecate the reading of such long extracts. I have asked the hon. Gentleman to bear in mind that it is already on the record and that his quotations have been inordinately long.
    Mr. Hamilton: I apologise to hon. Members, but it is so rarely that when I speak in the House I have such an enormous and appreciative audience. When one speaks before an audience of three people, whether one bores them or not is of somewhat less pressing importance.
    I am now coming to the end of my remarks, Mr. Deputy Speaker, and I should like to say how much I am looking forward—if I have the opportunity to catch your eye—to speak on the amendments. I hope that in time we shall have more compromises from the Committee of Lloyd's, so that we shall be able to give the Bill our wholehearted support and ensure that it gets on to the statute book.
    7.47 pm
    Mr. Michael Meacher: As the hon. Member for Harrow, Central (Mr. Grant) has made clear,
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    the Bill has already received what can only be described as exhaustive scrutiny by the Committee of which I was Chairman, involving no fewer than 40 hours of skilled and penetrating cross-examination by leading counsel, to whom I should like to pay a warm tribute for their precision of analysis and clarity of exposition. I hope that the results of that searching examination, as determined by the Committee, will be approved tonight by the House as a whole.
    The Bill, as presented to the Committee, contained two contentious issues. The major one concerned immunity or restraint on suit. The lesser one, although not unimportant, concerned the adequacy of representation of the interests of non-working members in the affairs of Lloyd's.
    There was also, in our view, one major omission—the provision for divestment between brokers and underwriters which, like the other two issues, was the subject of petition against the Bill.
    The evidence presented to the Committee on the issue of divestment was both clear and forthright. The Cromer report in 1969 was unequivocal. It stated:
    "The broker is the agent of the insured and in any conflict with any underwriter should put first the interest of the insured … we find it difficult to accept that, in exercising judgment of what business to accept and what to refuse, an underwriter who is an employee of a broker-owned agency can at all times be wholly impartial."
    The Committee, in paragraph 252, concluded:
    "There is a conflict of interest which cannot be ignored."
    The Fisher report of May 1980 was even more explicit.
    After discussing both potential and actual abuse, it concluded in paragraph 12.18:
    "the evidence of abuse is confirmed by the experience of the Lloyd's members of the Working Party who are sure that the conflict of interest involved is not only potential but actual."
    In the light of that, the report, in the next paragraph,stated:
    "the majority of us have reached the conclusion that divestment should be enforced and the formation of such links prohibited for the future."
    In support of that position, Mr. Posgate, the chairman of the subsidiary Lloyd's underwriting agency owned by the Alexander Howden Group, one of the largest British brokers, drew attention to several abuses which in his experience had occurred because of the broker ownership and control of underwriting syndicates. Those included large discounts for brokerages of up to 40 per cent. to 60 per cent., brokers placing business with their controlled syndicates on terms other than the best market terms, erratic ratings, the taking of a profit commission by the broker on the underwriting result, the misallocation of expenses between the names in the syndicate and the broking company and the payment of large commissions for the introduction of names.
    Faced with that evidence, Lloyd's, as promoter of the Bill, said that in 12 to 18 months it could draft sufficient regulations and byelaws, to quote the words of the chairman,
    "to take care of the situation".
    However, it did not believe that the problem had been analysed sufficiently in depth. The Committee did not find that at all convincing, not least because there had already been independent analyses in depth of the problem by two weighty committees, both of which recommended divestment.
    Also, it seemed to us that the Lloyd's undertaking, with whatever good faith it had been delivered—I have no doubt about that—would be almost certainly overturned.

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    If the broking fraternity controlled 10 or 11 of the 16 votes of working members on the council, and if a majority of that section as well as of the non-working members section was required under the special regulation procedure, the resolution in favour of divestment would almost certainly not be carried. Mainly for those reasons, the Committee decided that divestment within a period of five years should be enforced as part of the Bill and not left to be dealt with by the byelaws and regulations of the Lloyd's Council.
    On the second main contentious issue of the Bill—the restraint on suit—the Committee accepted the argument of the petitioners that the original drafting of the Bill on that point had gone extremely wide. Therefore, Lloyd's agreed to circumscribe more tightly the scope of the amenity sought and provided an alternative new clause. The effect of that has riot been as fully understood as it should be. It now limits the restraint on suit in several important ways. It confines it to members of the Lloyd's community, not to policyholders. It limits the benefit of restrictions to the Society of Lloyd's so that specific brokers and underwriters are not in any way protected. It applies only to actions for damages, so that even members of the Lloyd's community can apply for the remedy of judicial review. There is no restriction where there is liability for death or personal injury or where bad faith is involved, although I appreciate the problem of proving that. Above all, restraint on suit applies only in respect of the five activities listed in subsection (3) of the new clause.
    I hope that hon. Members who are objective about the matter will accept that that significantly limits the legal immunity of Lloyd's compared with what was originally proposed. Alarmist talk in some quarters of giving Lloyd's unprecedented powers to become a law unto itself are widely exaggerated. It is true that, despite the limitation, it was still put to us that the appropriate means to protect the Corporation of Lloyd's against claims—it would not be protected by section 448 of the Companies Act 1948—should be not by a more comprehensive indemnity but by trying to cover any liability towards members and others within the Lloyd's community through an errors and omissions insurance policy.
    We considered that proposal carefully in Committee. We noted I hat the cost would probably exceed £100 million—that was the information given to us which was not disputed—which would mean going outside the Lloyd's market and involving institutions abroad in questions of supervision and regulation of the Lloyd's market. It is fair to say that it could make the Lloyd's Council vulnerable to litigation in other countries not operating or permitted in the United Kingdom. However, our main consideration was that it could weaken the desired objective of a supervisory body capable of firm, rapid and fully effective intervention in the market, which experience during recent years has shown to be necessary.
    Those considerations persuaded the Committee that it had secured from Lloyd's a tightening of the restraint on suit. The restraint was not specified in terms and not left to be specified later by Lloyd's Council, which procedurally it would be difficult, if not impossible, for Parliament to alter. The new clause was a reasonable balance—I put it no higher than that—between ensuring the capability for effective and active supervision and prescribing the powers of the council so as not to go wider than is strictly necessary for the purpose.
    Mr. Archie Hamilton: When the hon. Gentleman was considering the immunity clause, did he think about the Sasse case? If so, to what conclusions did he come? As I read the clause as it now stands, it will make it impossible for the Sasse syndicate to sue in future. Sasse is one of the few cases of anyone having sued Lloyd's. It was paid off and there was almost an admission of negligence by the Lloyd's Committee. Does the hon. Gentleman feel that that should not happen in future and that it should not have happened in the past?
    Mr. Meacher: I agree that it should not have happened in the past. Both the Sasse and the Savonita affairs, and some other unfortunate incidents, were considered in detail. Our view was that if Lloyd's Council had had the power of effective intervention much earlier, the problem that led to a prima facie case of the right to sue the council for negligence would not have arisen. However, if the council had taken action immediately—which we would have expected it to take with the new powers and with limited immunity—the matter would not have arisen in that way.
    Mr. Eggar: I am listening carefully to the hon. Gentleman, because he is putting forward some pertinent arguments. Is he saying that the only reason why the Committee agreed to such limited immunity was because that was the only way in which it felt that the Lloyd's Committee could regulate its market effectively? If that is the Committee's view, is that not a severe criticism of the capability of Lloyd's Committee and the Lloyd's community for self-regulation?
    Mr. Meacher: The matter was discussed in paragraphs 606 and 607 of the Fisher report. Paragraph 606 refers to the incorporation of the provisions of section 448 of the Companies Act 1948. Paragraph 607 states:
    "That section, while providing protection for individuals, will not protect the Corporation of Lloyd's itself against claims. In the light of the outcome of the legal proceedings and legal advice received, it will be necessary for the Committee of Lloyd's to decide whether to seek to obtain appropriate protection for the Corporation against legal claims."
    The report goes on to suggest three possible courses of action. It is reasonable that Lloyd's should seek protection. The only real issue was which of the three possible routes should be adopted.
    The first was an errors and omissions policy, which was favoured by the petitioners. The second was to require the 19,000 members to agree not to sue the Corporation of Lloyd's or to agree to indemnify the corporation against civil liability. Both sides agreed that it was almost impossible to obtain such consent from 19,000 members and therefore that course was not practicable. The third—I quote from the Fisher committee—was to seek
    "the inclusion in an amended Lloyd's Act of a section giving more comprehensive indemnity (possibly along the following lines)".
    The committee then sets out a draft provision. Therefore, the choice was between the first possibility and the third. We considered the first, but accepted that it was reasonable—for both the reasons that I have given—that Lloyd's should go for the third possibility. We were concerned not to leave immunity wide open for construction by the Council of Lloyd's after the Bill had gone through the House. We were determined to have it written into the Bill in a way that could be amended on Report or, if necessary by the Opposed Bill Committee.
    Mr. Eggar: I genuinely seek clarification because this point worries me a great deal. Did the committee really come to the conclusion that, without either an errors and omissions policy or the type of limited immunity given in the Bill, the community of Lloyd's, the Corporation of Lloyd's or the Committee of Lloyd"s could not function as they do at present?
    Mr. Meacher: That was the view put to us by the promoters. It is fair to say that it was accepted by the Committee. It would expose the Corporation of Lloyd's to liability in a manner which would severely restrict the effectiveness of its regulatory and supervisory powers. My own view—I believe that it was also the view of the Committee—is that it was right to seek some protection. The only question concerned the form of that protection. Even the petitioners against the Bill were not claiming that it was not necessary. They said that an alternative route should be used.
    Sir Nicholas Bonsor: Did the Committee consider the damage that can be done to a working member of Lloyd's by negligent and harmful comments in the form of slander or libel? If so, why did it conclude that the council should have protection for such libel? Was that considered and, if so, why was no separate clause introduced, so that libel was not exempted and so that they could not get away with that type of behaviour?
    Mr. Meacher: The question before the Committee was how to ensure that there would be effective supervision of the market to a degree that has not existed before. Therefore, increased powers for early, rapid and effective intervention in the market were written into the Bill. They are not challenged. The only question is how they can be made operative so that the council will not feel that its wings have been unduly clipped and so that it will not be restrained from operating quickly to use those powers. That was the issue. A reasonable balance has been drawn.
    Sir Nicholas Bonsor: The hon. Gentleman has not answered my question. I asked whether the question of libel and slander and the damage that they can do was specifically considered by the Committee. If so, on what grounds was that included in the general indemnity?
    Mr. Meacher: If the hon. Gentleman is suggesting, as he seems to be, that libellous or slanderous remarks might be made by members of the council which could be damaging to members of Lloyd's, and against which members would not have recourse in the courts, the answer is that that matter was not specifically raised in Committee. It would affect future elections to the council, but I concede that the hon. Gentleman may think that that is a rather distant date and that there needs to be a more immediate recourse. However, the matter was not raised.
    Mr. Clinton Davis: I congratulate my hon. Friend the Member for Oldham, West (Mr. Meacher) and his colleagues on the Committee for a most painstaking, diligent and skilful piece of work and on the way they conducted this difficult matter.
    On the matter raised by the hon. Member for Nantwich (Sir N. Bonsor) and others, is there not always a duty on the committee to act within the realms of natural justice? If there is any breach of that duty or any lack of good faith in its operations, the prerogative writs apply and there is a remedy available in the courts.
    Mr. Meacher: I am always grateful to be assisted by my hon. Friend. He is a lawyer, and I am sure that he is absolutely correct. I am not a lawyer, and I stand to learn from his wisdom. It may be that he is correct, but I cannot confirm it.
    Mr. Nicholas Baker: Will the hon. Gentleman confirm that the libel would have to be issued by the society rather than by the individual member? Therefore, the likelihood is remote. Will the hon. Gentleman also confirm that the reason the Committee preferred clause 3 rather than the errors and omissions insurance was that if there were a claim under an insurance policy the conduct of the business must be handed over to the insurers? Therefore, the whole self-regulation of Lloyd's would be defeated.
    Mr. Meacher: Part of the case against the first route was that it would involve organisations outside Lloyd's—in particular, overseas institutions—having unwelcome access to the affairs of Lloyd's. We certainly wish Lloyd's to be operated in an open—not a secretive—and properly effective manner. The Committee accepted that it would not be in the interests of the country or of the Lloyd's community in general if overseas institutions, with which there is immense competition, had such access.
    The third issue is the rights of non-working members. Lloyd's made a small move by agreeing to increase the number of seats on the council for non-working members, but the Committee did not feel it unreasonable—I put it no stronger—that working and non-working members should continue to be elected in separate sections when only the working members could know working members standing for election. Otherwise names in tens of thousands might seek advice from their managing agents with, perhaps, erratic results. It was on that general basis that last summer Lloyd's withdrew its Bill to obtain the approval of its membership for inserting the divestment provision in the Bill. Having obtained such approval by an overwhelming majority, Lloyd's resubmitted the Bill including the divestment provision. On that specific point, it was petitioned against again by the brokers Alexander Howdens. The Committee sat for a further six days while additional evidence on divestment was exhaustively analysed and reanalysed.
    On the second occasion, the central proposal of the petitioners was that a requirement should be imposed on Lloyd's Council to implement the measures outlined in detail by the Fisher Committee in paragraph 12.30(a) to (f) to deal with potential abuse, with the understanding—and this is the key point—that if they were not implemented in the required five-year period it would be for Parliament and the Secretary of State for Trade to implement them mandatorily.
    The Committee took Fisher's view. It was our basic ground for rejecting the petitioners' view. Fisher stated:
    "The majority of us believe that no proposal short of complete divorce is sufficiently watertight to reassure the public and the Names, and give active Underwriters the greater independence and standing which the health of the market requires."
    I emphasise that we considered the proposal extremely carefully. We did not treat it cursorily. Our view was that in the last resort it was impracticable because there is not and cannot be, given the way in which we run Parliament, a guarantee that the Government of the day would take

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    such action at the end of the five-year period. For that reason we believed that it was right to retain our original decision on divestment.
    Mr. Michael Marshall: I joined the Committee for the stage which the hon. Gentleman is now discussing. Will he confirm that our view was that we should have liked to examine the self-regulation aspect, but that the problem at the parliamentary end prevented us from reaching a decision in favour of the petitioners? Perhaps a lesson can be drawn from that which we can examine in other circles.
    Mr. Meacher: That is a fair comment. I pay tribute to the hon. Member for Arundel (Mr. Marshall) who joined the Committee for the second stage of our deliberations. I pay tribute also to my hon. Friend the Member for Hackney, Central (Mr. Davis) and to the hon. Member for Epping Forest (Sir J. Biggs-Davison) for their extremely valuable support in the detailed questioning to which on many occasions they subjected counsel and witnesses. I hope that the results merit their labours.
    The Bill has been subjected to 11 days of exhaustive examination by skilled counsel and the Committee. I believe that it has been amended in a manner which preserves its original necessary and proper purpose. It inserts provisions on divestment and the limitation of immunity which are long overdue and widely acknowledged to be needed. On that basis, I hope that the House will approve the Bill.
    8.13 pm
    Sir Charles Fletcher-Cooke: I congratulate the hon. Member for Oldham, West (Mr. Meacher) on the care with which he conducted the Committee. I was not there, but I have heard about his conduct not only from members of the Committee but from in and around the Temple and elsewhere. People are full of admiration for the way in which he acted as Chairman in a difficult matter.
    I shall confine my remarks to clause 14, which deals with immunity. I shall be brief. Hon. Members should realise that, in spite of the whittling down of the original form of the clause, it exempts the society from actions for negligence, however gross that negligence. That is a strong measure. It exempts the society at the suit of not only existing members of Lloyd's and other people on the fringes of Lloyd's but persons who might want to become members arid people who have tried to become members and failed. The matter is not merely internal for Lloyd's. The present form is better than the original form, which seemed to exempt at the suit of anybody and which seemed to exempt many other people as well. It is a strong immunity. I do not believe that it has been justified on the grounds mentioned.
    The first ground is that the provision is necessary for the effective supervision of the market. That is an internal matter. I do not see why, if the Stock Exchange authority, which is in the commercial business, does not require it for the effective regulation of the market in stocks and shares, it should be necessary for insurance markets. The constitutions of the bodies are entirely different, but there is a parallel to be drawn.
    The case which I wish to query is that expressed by my hon. Friend the Member for Harrow, Central (Mr. Grant), who said that the real reason why the immunity was
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    necessary was that the society should be protected against blackmailing actions, particularly by overseas competitors. One might argue that the Law Society, or even the council of the Stock Exchange, were not so liable, but every great international trading organisation in the world is liable to blackmailing actions from overseas competitors. Any one of them, at any time, might have a writ bunged in against it containing material which was damaging once published but which was never supported by evidence. That is one of the risks that those who trade in the international or even the national market have to take.
    Mr. Clinton Davis: A separate issue is involved. The most important commodity of Lloyd's is its reputation for integrity. A blackmailing action could be brought, time could be taken to deliberate it and enormous damage could be done to that reputation. The damage would be far more extensive than it would be in any other field that one can contemplate.
    Sir Charles Fletcher-Cooke: Our manufacturing industries still have a remarkable reputation for quality. There are not as many as there used to be, but there are still many. It is upon their reputation for quality that they depend for their markets. Nobody suggests that if an attack on the quality of its goods were made, perhaps destroying an overnight reputation for quality, that would mean that it could have the remarkable immunity against the negligent statements or actions made by itself, its shareholders or anybody else, however gross.
    There might be a case for filtering claims against Lloyd's by the same sort of mechanism that obstructs vexatious litigants. Even without that, this argument tries to prove too much and, in conclusion, I shall say what I mean.
    If the wicked foreigner postulated by those who defend clause 14 wishes to bring a blackmailing action, he will not be deterred by clause 14 as it is currently drafted. All he has to do is allege bad faith—he has to put It in the writ—and that is a far more damaging allegation than merely alleging gross negligence. He can do that even with the Bill as it is now drafted. Even if he does not want to go as far as that, he can find a non-member at whose suit gross negligence or other breach of statutory duty or tort can be alleged. That argument, the argument of the blackmailing foreigner, therefore proves too much. In my view, of course, it proves nothing, and nor does the claim that there should be an immunity of this size for the proper regulation and supervision of the market. That is a very fine phrase but I should have thought, as my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton) suggested, that it was wrong to protect a regulatory body or society against claims for negligence when it had been negligent. The Sasse case may be an example of that.
    Why should a body that has been negligent be protected from its own negligence? That has not yet been explained. Other bodies in the same position do not get such protection.
    8.20 pm
    Mr. Clinton Davis: One always listens to the hon. and learned Member for Darwen (Sir C. Fletcher-Cooke) with care and on this occasion he expresses, as a distinguished lawyer, very real concern about immunities. When this matter was before the House

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    on Second Reading, the approach envisaged was effectively to shelve the issue and to deal with it by way of subordinate legislation. That was wholly inappropriate and unacceptable to the House.
    There is a case for dealing with the matter along the lines suggested by the hon. and learned Gentleman, although he took a somewhat academic view of the matter. There are real practical considerations which obtain here. They can easily damage that precious commodity—the integrity of Lloyd's—in the way that he, in what he said would be a short speech, glossed over.
    The hon. and learned Member for Darwen is right in saying that if an unscrupulous person, wishing to disadvantage Lloyd's, alleges that there has been a breach of good faith, he can move to obtain a grant of a writ for judicial review. However, that is a much more limited remedy and, because the burden of proof that would rest on him would be profound and heavy, it would be difficult to establish that in most cases.
    Sir Charles Fletcher-Cooke: It is not only a writ for judicial review; he can start an action for damages because there is an exception to clause 14(3) where the normal immunity is removed from an action for damages and where
    "the act or omission complained of was done or omitted to be done in bad faith."
    That applies to an action for damages as much as to a review.
    Mr. Davis: The hon. and learned Gentleman is, of course, right but it is a much more limited scope of the action than if he were able to issue proceedings if the immunity did not exist. Given the balance of the argument, a reasonable but not by any means perfect compromise has been achieved. That is largely due to my hon. Friend the Member for Oldham, West (Mr. Meacher) and other Committee members.
    Any lawyer will know that a legal action can be used for undesirable purposes. The undesirable purpose that we have in mind is the ability to try to extort compromises through adverse and often unjustified publicity. If limited immunity were not available, the damage would be infinitely greater than that caused by the type of action referred to. The Committee underlined something that Fisher was anxious to do. I refer to the wish to do one's best to ensure that Lloyd's disciplinary procedures are brought up to date so that Lloyd's can act expeditiously to preserve its reputation,. That was seen as a matter of prime importance. There was no doubt that the old and antiquated procedures were unduly cumbersome and complex. These changes—and those set out in clause 7—are overdue and welcome.
    I do not question the justifiable anxiety expressed by many hon. Members about immunity. The burden of proof falls heavily on Lloyd's to assert that, in such circumstances, immunity is necessary. I have a limited amount of experience of the problems of Lloyd's both as a Minister at the Department of Trade dealing with company affairs for more than five years and as an Opposition spokesman in this area for more than two and a half years. Given the practical considerations, I believe that Lloyd's has made out its case, Initially, I was very much opposed to immunity. However, given the commercial justifications put forward, I felt impelled to
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    the view that a persuasive case had been put forward. That case is much more compelling now that the immunites have been rightly and considerably scaled down. Therefore, I hope that the House will take the advice of my hon. Friend the Member for Oldham, West and act on the proposals that the Committee advanced after its most difficult and time-consuming deliberations.
    On Second Reading I argued that divestment could not be left to the spun-out deliberations of the council. I felt that it was wrong simply to make byelaws. However, the Committee has carried out an independent survey and has reached almost precisely the same conclusion. I welcome that. The possibility of a conflict of interest could be damaging to Lloyd's reputation for integrity, which is essential to its future well-being. The issue is basic, because it touches on a conflict of interest. The move has been embraced by the Committee and the Bill's sponsors and should be supported by the House.
    I hope that tonight the Minister will resist the temptation merely to talk, as he did on the last occasion, about the great advantages of Lloyd's to this country. Those advantages are self-evident and it is unnecessary for us to restate them.
    I hope that the Minister is persuaded to divorce himself from the views that he expressed previously when he welcomed the proposition that secondary legislation would suffice for dealing with immunity. I hope that the Minister and his Department go along with the new thinking explained by the hon. Member for Harrow, Central (Mr. Grant).
    I hope that the Government give these new proposals their support. If I am to be critical—I hope that the Minister will not take the criticism amiss—I do not think that the Minister helped the case last time by swiftly running into the position of saying "Yes, we support Lloyd's conclusions that there should be subordinate legislation. No one need fear it. It is perfectly all right." He did not give Lloyd's the comfort that he intended to give. Indeed, he helped to create a climate of great scepticism about those proposals. I hope, therefore, that he, too, has had second thoughts along the lines adumbrated by 'his hon. Friend the Member for Harrow Central.
    Viscount Cranborne: On a point of order, Mr. Deputy Speaker. We have heard a great deal about the important subject of immunities and a certain amount about divestment. I understand that Mr. Speaker has selected a group of amendments dealing with both these matters. Could you please confirm that in due course we shall, be given an opportunity to discuss these matters more fully?
    Mr. Deputy Speaker: At the moment we are considering the Bill, as amended. When we have concluded that, we shall come to the new clauses and the amendments.
    8.32 pm
    The Under-Secretary of State for Trade (Mr. Reginald Eyre): It might help the House if I now give the Government's views on the Bill and respond to the questions put by the hon. Member for Hackney, Central (Mr. Davis), although I hope that he will forgive me if I do not accept all his directions on the contents and nature of my speech.

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    It is now almost a year since we considered the Bill on Second Reading. The intervening period has been eventful, and it has certainly not been wasted. However, I must first note one very sad event already mentioned by my hon. Friend the Member for Harrow, Central (Mr. Grant)—the death of Sir Graham Page, who so ably presented the case for the Bill at our earlier discussion. I am sure that the whole House will recall the clear and cogent manner in which Sir Graham explained the motivation and purpose of the Bill and his complete mastery of the complex issues and technicalities involved. It is a great misfortune for the House and for the promoters of the Bill that Sir Graham was not able to assist us in our further deliberations. We are, however, fortunate indeed that my hon. Friend the Member for Harrow, Central has stepped into the breach and so quickly familiarised himself not only with the Bill as originally presented but with the important subsequent developments.
    I also pay tribute to the members of the Committee on Opposed Bills, who have done so much to clarify the issues and to establish the facts upon which the House can reach its decisions. I congratulate the hon. Member for Oldham, West (Mr. Meacher) on his chairmanship of that Committee and on his thoughtful speech to the House today, and on the admirable way in which he replied to questions put to him in interventions. Those who have studied the proceedings of the Committee can only express their admiration for the patient, thorough, and scrupulously fair manner in which the Committee has carried out its functions. The House is in its debt, and we must attach great weight to the considered conclusions it reached after hearing all the evidence and the arguments presented.
    It is also appropriate that I should commend the promoters—the Committee of Lloyd's—for the responsibility and determination with which they acted, not, I emphasise, in the pursuance of a narrow private interest but in recognition of the interest of the community at large in the health of Lloyd's as an important national institution and a contributor to the national economy.
    Let us recall that on its own initiative the committee established an independent working party under the distinguished chairmanship of Sir Henry Fisher in February 1979. In May 1980 the working party produced a report containing proposals for a thorough-going revision of the constitution of Lloyd's and many of its procedures. At that stage it would have been easy for Lloyd's to say that it would need time to reflect on the issues and to prepare its own proposals in detail. It is greatly to the credit of Lloyd's that it did not take the easy way out. On the contrary, it showed great determination to maintain the momentum for reform provided by the Fisher report. With efficiency and industry it prepared and presented a Bill to Parliament within a year. That is a record of which it can be proud.
    The efforts of Lloyd's did not stop with the presentation of the Bill. As one would expect, some aspects of the Bill have met with controversy. With patience and skill the promoters have argued their case where they believe it to be right. Most commendably, they have kept an open mind to constructive criticism and have shown great willingness to respond to well-founded criticism made in the House, despite the efforts needed to secure the agreement of members to any major amendments to the Bill. As a result, the Bill now before us is in several important respects an improvement on the Bill we considered last year.
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    In our debate on Second Reading I outlined the general attitude of the Government to the Bill. Lloyd's is a unique institution. It is also a successful institution. Lloyd's is noted not only for its unrivalled experience in such traditional areas as marine insurance but for its continuing ability to innovate and give the lead to the world insurance industry in such diverse areas as the insurance of oil rigs and communication satellites.
    It is a measure of Lloyd's success overall that, despite fierce international competition and a downturn in the market, its latest published results show a record profit of £174 million. Lloyd's contribution to our annual invisible overseas earnings is well known. It runs into hundreds of millions of pounds.
    There is a danger of allowing highly publicised incidents to obscure the continuing success of the Lloyd's market. However, those incidents and the apparent difficulty of dealing with them under Lloyd's existing constitution were bound to raise anxiety that Lloyd's record and reputation were at risk. Those considerations led to the setting up of the Fisher working party and to the Bill. It is of the utmost importance to recognise that the Bill represents the considered and collective opinion of Lloyd's—its members—on the best way to deal with the problems concerned.
    In reaching that opinion, Lloyd's has also given due weight to the public interest as represented, first, through the independent membership of the Fisher working party and, more recently, by the impartial scrutiny of the House and its Committee. There must be a strong presumption that the judgment of the promoters overwhelmingly endorsed by the membership of Lloyd's and embodied m the Bill provides the best practical solution to the problems that Lloyd's recognises.
    Mr. Needham: What does the Minister think might happen if, for some unfortunate reason, the Bill did not get through its proceedings in the House? Does he think that this important Bill would have the proper chances of coming back in another Session?
    Mr. Eyre: My hon. Friend raises a serious question. I admit that I have serious anxieties on that point. My hon. Friend is asking me what the Government will do if the Bill fails. If it fails, Lloyd's will consider the options, but valuable time will have been lost. On certain issues some progress may be possible in the light of further consideration, but the ground has already been fully explored. There can be no certainty that a second attempt would be more successful than the first, particularly where financial interests lie behind the opposition. If Lloyd' s found it impossible to resolve the issue without the assistance of the Government—
    Mr. Jonathan Aitken: (Thanet, East): On a point of order, Mr. Deputy Speaker. My hon. Friend the Minister has inadvertently made an unfortunate reference to the fact that—
    Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. That matter has nothing to do with the Chair.
    Mr. Aitken: If I may say so, Mr. Deputy Speaker, it is a point of order if—inadvertently, I am sure—the Minister or any other hon. Member impugns the honour of hon. Members. The Minister made a clear suggestion that people's financial interests were leading them to oppose this Bill.
    Mr. Eyre: I thank my hon. Friend for intervening. If I have given the impression that I am in any way impugning the honour of any hon. Member, I withdraw whatever words gave that impression. That was certainly not my intention.
    Mr. Moate: Further to that point of order, Mr. Deputy Speaker. I thought that my hon. Friend was not impugning the integrity of hon. Members but suggesting that there was something improper in Private Bill legislation in commercial. interests opposing this measure, whereas it is commercial interests—
    Mr. Deputy Speaker: Order. It does not appear that that is a matter for debate.
    Mr. Eyre: I want to emphasise a matter which would be important if the Bill were to fail. If Lloyd's found it impossible to resolve the issue without Government assistance, we should naturally have to consider whether we, the Government, could help. However, in view of the pressure of parliamentary time on the Government's own business, there could be no guarantee of success, particularly if it were a matter of finding parliamentary time for what I believe would be a Hybrid Bill.
    Mr. Richard Shepherd: The other side of that argument is, surely, that there would be no guarantee of failure.
    Mr. Eyre: I am inviting my hon. Friend the Member for Thanet, East (Mr. Aitken) to pay serious attention to the pressure of time on parliamentary business. Those demands would make it extremely difficult for the Government to respond and find such time.
    Mr. Clinton Davis: Surely the real risk is that overseas interests might construe this as a vote of no confidence in Lloyd's itself.
    Mr. Eyre: I agree with the hon. Member for Hackney, Central. There are important implications for the international nature of the Lloyd's business. I am sure that all right hon. and hon. Gentlemen are aware of the importance of what I am saying. I ask them to bear in mind the importance of the matter that we are dealing with and the importance of coming to a decision on this Bill.
    Mr. Moate: My hon. Friend, as the Minister at the Dispatch Box, has been asked about the prospects for a similar Bill if this Bill were to fail. I see no reason why it should fail. However, when we are discussing private legislation, my hon. Friend has no status other than his distinguished status as a Member of the House to venture an opinion about the prospects of success or failure of further private legislation introduced next year. No one has seriously suggested that that would be the subject of Government legislation.
    Mr. Eyre: I am emphasising the delay that would result from failure and the difficulty about the preparation of another Private Bill. In any event, there would be difficulty in producing a better Bill and difficulties concerned with its progress. Looking ahead, it would involve delay and difficulty for the Government, particularly with regard to parliamentary time. I hope that right hon. and hon. Members will take serious account of all those difficulties. It is therefore important that we should consider this Bill properly and that our deliberations thereon are properly conducted.
    Mr. Kenneth Lewis: My hon. Friend said something that gave me the impression, and it may have been an impression that other hon. Members got, that, if the Government could find the time, since this was a very important Bill, they would be able to influence the authorities of the House to find more time for the Bill. Can I take it from what he said that the Government will use their influence to find more time, as they think that it is an important Bill, for this Bill, not for another?
    Mr. Eyre: First, may I say to my hon. Friend the Member for Rutland and Stamford (Mr. Lewis) that I was making clear the very considerable difficulty the Government would have in finding parliamentary time should this Bill fail, that therefore hon. Members may not look to the Government to solve that problem. My hon. Friend is really talking about the time available for Private Bills. Hon. Members will know that there is considerable pressure on the time available to deal with Private Bills. It certainly does not lie within the power of a member of the Government to influence the allocation of time for such Bills, although no doubt my hon. Friend's remarks will be noted in the proper place.
    Mr. Moate: My hon. Friend is making a very important point. He is emphasising that he is anxious that this Bill should not fail. Would he agree that that is a message that should be taken on board not only by those who might be seen today as delaying proceedings but also by the promoters, who in their turn should consider the proceedings of the House to ensure that it does not fail?
    Mr. Eyre: I think it would be desirable for me to continue with the main purpose of my speech, which I am sure my hon. Friend wishes me to do. I have said that we come to the best practical solution to the problems which Lloyd's itself recognises to exist. It is of course the duty of the House to ensure that objections to the Bill are properly considered and that legitimate private interests are not adversely affected without good reason. The Committee of the House has considered such objections in full and at length. Certain amendments have been made to the Bill in consequence. On the important issue of divestment, a general meeting of Lloyd's has endorsed the change which the Committee required.
    The basic principle of the Bill is the preservation of effective self-regulation within the Lloyd's market. I made it clear on Second Reading that the Government support this objective. The choice is between self-regulation and regulation, directly or indirectly, by the Government themselves. We believe that, as long as the institution of Lloyd's shows the will and the ability to regulate its own affairs, it is greatly preferable that it should do do. There are several reasons for this.
    First, it will be evident to all those who have studied the Fisher report and the evidence given before our own Committee that the institutions and procedures of Lloyd's are characterised both by great complexity and by a remarkable informality and flexibility. Lloyd's is a close-knit working community in which the transaction of business involves a maximum of personal trust and understanding and a minimum of paperwork and detailed regulation. It would be no light task for any outside agency to acquire the understanding, information and intuitive judgment about Lloyd's affairs that can be exercised by an effective supervisory system within Lloyd's itself.

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    Secondly, it is clear that, where abuses do occur, they are elusive of definition, difficult to prove, and as likely to infringe the spirit as they are the letter of the regulations. In those circumstances, internal disciplinary procedures are more likely to be effective, without destroying the essential flexibility, than Government supervision backed up by the normal apparatus of law.
    Finally, it is important that Lloyd's should have the ability to adapt rapidly to changing circumstances and to make new rules to deal with new problems as they arise. The Bill gives the institutions of Lloyd's the power to make byelaws for these purposes. I am sure that this is more effective than attempting to lay down regulations from the outside, even with the aid of secondary legislation.
    Mr. Richard Shepherd: Will my hon. Friend comment on the resignation of Mr. Kiln from the Committee of Lloyd's and the reasons that he set out in Lloyd's List? In view of the shift of opinion in the Committee of Lloyd's that that may represent, will my hon. Friend tell us the Government's reasons why they do not find Mr. Kiln's arguments convincing?
    Mr. Eyre: 1 am trying to explain in positive terms the Government's view of the Bill. I should not dream of commenting on internal matters relating to the conduct of members of the Committee of Lloyd's.
    In passing, I would add that regulation is not merely a matter of statute and byelaws. It is also a matter of enforcement. I believe that Lloyd's should have the powers in the Bill and that they should be used. Lloyd's has proposed for itself—and we are endorsing—an extensive programme of byelaw making. By implication, we are also endorsing the need for the effective enforcement of the powers in the Bill and those to be incorporated in byelaws. I have emphasised the advantages that we see in self-regulation. But those advantages are lost if the regulation is not carried into effect properly, fairly and energetically. The promoters of the Bill have shown that they have these qualities, but it is right that it should be made explicit that the House, if it grants the powers, expects them to be used for the maintenance of the highest standards of integrity and professional competence.
    I turn now to some of the more detailed and controversial aspects of the Bill. I consider first the issue of divestment. It is, I think, agreed by all concerned that there should be a separation of the control of brokers and managing agents of syndicates to avoid conflicts of interest. The only argument is about how this should be done.
    Certain parties have argued that it is sufficient to separate the management of brokers and managing agencies without separating ownership. This is very much a minority 'view. The Fisher report, the Committee of Lloyd's, the membership of Lloyd's and the Committee of the House have all concluded that separation of ownership is the right way to achieve the objective.
    Fisher thought that the necessary provisions would be complex and would have to be left to be spelt out in bye-laws. The original version of the Bill reflected this view. The Committee of the House, however, concluded that such a fundamental matter should be covered in the body of the Bill. The promoters have accepted this view and, with the overwhelming support of their members, obtained
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    in a further general meeting, have proposed an additional clause. I believe that this significantly strengthens and improves the Bill.
    As to the principle of divestment, I do not think that the objections are sufficiently weighty to override the considered view of most of those who have studied the issue. There is to be a five-year transitional period to allow divestment to take place. It has not seriously been argued that suitable buyers will be lacking for what are known to be valuable assets. Some, on the other hand, have argued that divestment will divide the market into factions and inhibit the growth of business. I do not find this very convincing. Lloyd's prospered before the underwriting agencies were owned by brokers and independent agencies prosper to this day. Lloyd's is a flexible and adaptable organisation, and I do not suppose that the membership would have endorsed the change if the prospect were generally as alarming as has been suggested.
    Mr. Moate: My hon. Friend said earlier that we should trust the judgment of the promoters. When the Bill was first promoted in the House it did not contain compulsory, divestment. Had the promoters not throughly examined the matter then?
    Mr. Eyre: My hon. Friend is perhaps not giving due credit to the fact that the argument was advanced and that due account was taken of its strength. I believe that the position that has been adopted is a proper one.
    Sir Nicholas Bonsor rose—
    Mr. Eyre: I think that it will be better if I complete my speech.
    A further point of detail that has been raised concerns the rules for the election of the new Lloyd's council. That seems to be very much a matter for those within Lloyd's to decide. I understand that the proposals on this point have been approved by more than 99 per cent. of the Lloyd's membership voting on the issue.
    Sir Nicholas Bonsor rose—
    Mr. Eyre: I have given way many times. I shall be interested to hear the coherent speech in which my hon. Friend will develop his own arguments.
    Finally, I turn to the question of the so-called immunities for Lloyd's and its officers. I made it clear on Second Reading that I accepted the view of the Fisher report that a regulatory authority must be free of harassing litigation. In the particular circumstances of Lloyd's there are strong grounds for the view that Lloyd's and its officers should be given some measure of legal protection in the bona fide exercise of their functions. It is inherent in the nature of Lloyd's business that its members will, on occasion, suffer financial losses. Where this happens there will be a natural temptation to try to recover the losses by litigation, and Lloyd's, as a regulatory body with responsibility for ensuring good conduct in the market, will be a natural target for such litigation to obtain compensation from Lloyd's central resources.
    It is a fundamental principle of Lloyd's operations that members have individual and limited liability for the risks that they accept. If they were encouraged to think that litigation against the regulatory authority would give them a chance of access to the central funds of Lloyd's as a society, that fundamental principle would be undermined and the character of Lloyd's would be radically changed.

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    I emphasise that the business of Lloyd's undertakers—I am sorry underwriters—is risk bearing. This was emphasised by the hon. Member for Hackney, Central. My hon. and learned Friend the Member for Darwen (Sir C. Fletcher-Cooke) — and I would always take careful account of his views—tried to say that the business of Lloyd's was directly comparable with that of the Stock Exchange. I do not think that is so because of the former's world-wide risk taking, which is not the same as that conducted by agents who deal in stocks and shares on behalf of their clients. The undertaking of these risks is a function which distinguishes Lloyd's from the Stock Exchange.
    It is not unreasonable to want to prevent those risks from being laid off, through court actions, against the society itself. It is important that the properly constituted regulatory authority should be free to exercise its functions according to its own judgment. If we do not grant a degree of immunity, we shall be imposing a duty on the authority without the capacity to carry it our effectively. We shall not be giving self-regulation a fair chance to prove its effectiveness in the complexities of modern insurance business if every decision can become the subject of action for damages.
    Mr. Aitken: Is my hon. Friend aware that his Freudian slip about undertakers is a reference to the fact that in this speech he is in the process of burying the Bill's chances? By his not giving way an inch on the immunitities issue, so clearly illuminated by my hon. and learned Friend the Member for Darwen (Sir C. Fletcher-Cooke), it is clear that there is such opposition from Conservative and other Benches that the chance of the Bill getting a fair passage are being reduced to zero. As it has already been said that the Committee of Lloyd's will give further consideration to the Bill if it is delayed or impeded at this stage, would it not be wiser to go back to the drawing board with the Council of Lloyd's to see whether further consideration can be given to this important point?
    Mr. Eyre: I know that my hon. Friend has strong views on this matter and I respect them. However, I differ strongly and when I made that unfortunate slip I was trying to show the profound difference of judgment which I have with regard to the nature of the business. That is a very important element. My remarks about the progress of the Bill and the time available are of great seriousness. It would be a great responsibility on the part of any hon. Member to seek to talk out the Bill or to prevent its making progress because of the enormous consequences affecting the great institution of Lloyd's if the Bill does not receive proper attention and the question is not brought to proper resolution.
    It is also right to recognise that the scope of immunity is strictly limited. It protects Lloyd's only against actions from those within the community itself. Moreover, as a result of consideration in the Committee, the categories of persons affected by the immunity have been restricted to the members and the more senior executives of firms within the market. The rights of the majority of the employees within Lloyd's are now unaffected.
    A further most important limitation of the immunity is that in its revised form it protects Lloyd's only against suit for damages. It by no means rules out the process of judicial review of Lloyd's discharge of its regulatory
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    duties. Where it is thought, for instance, that the authorities have exceeded their powers, failed to carry out their duties, or exercised them in an unfair or unreasonable manner, it would be open to aggrieved parties to seek judicial review by the High Court. A successful action could lead to an injunction or a declaration of the correct interpretation of the law.
    Together with the hon. Member for Hackney, Central, I believe that this is a most important safeguard. The authorities at Lloyd's will be accountable in court for the fairness and reasonableness of what they do or omit to do. Subject to this safeguard, I believe that the Bill strikes the right balance. Regulatory decisions may well cause financial losses to members of the Lloyd's community from time to time. It is probably right that they should. But, so long as those decisions are taken within the framework of an effective regulatory system by or under the authority of the duly elected authorities and are subject to the rules of natural justice, I do not believe that there can be much ground for complaint from those who decide to work or invest in this community where the principle of utmost good faith is paramount.
    Sir Nicholas Bonsor rose—
    Mr. Eyre: If my hon. Friend will forgive me, I should like to complete my speech.
    This is, of course, not Government legislation. It is a Private Bill. Nevertheless, I invite hon. Members on both sides of the House to give it their support in its present form. The fundamental reason is that it is a necessary piece of legislation for the proper running in our generation of the Lloyd's market. Nor is it a Bill that should be further postponed. The need for it is urgent. This has been demonstrated in the report of the Fisher working party.
    The Committee of Lloyd's promoted the Bill with admirable promptitude and the membership backed it with an overwhelming majority. If we do not now back this confident and robust proposal for a system of self-regulation and self-supervision, we may undermine that confidence and weaken the vigour. Further consideration would not yield a better Bill. The risk is that it would yield no Bill. I do not believe that the House should take the responsibility of causing that or the confusion and uncertainty for the whole institution that would follow.
    9.4pm
    Mr. John Fraser: I shall be brief as I believe that there are only two issues and the sooner we get on to the detailed consideration of the amendments the better. The short point is that the present system of Lloyd's self-government is unwieldly and impractical. It must be modernised, because Lloyd's is vulnerable. In a sense, its integrity is its vulnerability. It can be got at and almost blackmailed because of its integrity and reputation, but it does not have the modern machinery to enforce integrity upon its members. That is the weakness shown up by the Sasse case and it demonstrates the overwhelming need to get the Bill through now.
    There can be no question of leaving this to another occasion. The alternative of having no Bill is not only unacceptable to me and to Lloyd's, but it should be unacceptable to the country and to the House. The Bill has the overwhelming support of the Lloyd's community and it would be a parliamentary perversion—I do not think that that is too strong a description—to hold it up any further when an overwhelming case has been made out for it.

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    The first issue of the two issues is divestment. When the Bill was promoted, it was never in doubt that there ought to be divestment. Only the manner in which it should take place was at issue. The Committee carefully considered the matter and, quite rightly in my view, came to the conclusion that this matter was so fundamental that it should be the subject of primary legislation. The Bill has been altered accordingly. I have no dispute with that conclusion. I am sure that it is right.
    The second issue is immunity. When I was first consulted by Lloyd's on these matters, I reacted against any kind of general immunities, as I am sure that the rest of the House would. However, I believe that it has now been pared down in such a way as to be tightly drawn and that only the necessary immunities are included.
    There are two issues. First, Lloyd's should not be inhibited in the investigation, in good faith, of an allegation of neglect. That is right. There must be an immunity against, say, actions for negligence, libel or slander to enable proper investigations to take place.
    Secondly, Lloyd's should not be made liable for a failure to exercise its powers of supervision. That would not only open the door to another Sasse case, but make the position worse. If one imposes duties and powers to investigate but leaves out the immunity from suit for failure to exercise those powers, the chances of further actions of the Sasse variety are exacerbated rather than diminished.
    Mr. Archie Hamilton: Is the hon. Gentleman suggesting that it was wrong for Sasse to be paid although Lloyd's was proved negligent?
    Mr. Fraser: I do not wish to go into the details of the Sasse case. As I said at the outset, what is being put in pawn is the reputation of Lloyd's. If one gives the powers without some degree of immunity, even forgetting about the Sasse case, one is exposing Lloyd's to an action for failure to exercise a statutory duty, which would be an escape route for somebody who had unwisely written insurance business.
    That seems to be the obvious form of protection which the Council of Lloyd's must have if Lloyd's is to be given the other powers to control the activities of its members.
    Viscount Cranborne: I have been following the hon. Gentleman with great care as this is a very important argument. Is he arguing that the integrity of Lloyd's, which we all agree is one of its greatest assets, can be impugned only in a court of law? Would not newspaper reports and rumour have an equal, if not greater, effect? After all, allegations against the integrity of Lloyd's would then be uttered in an uncontrolled environment, which a court is not.
    Mr. Fraser: Of course rumour can be dangerous to the reputation of Lloyd's, but one of the most damaging things that we can do is to be dilatory about this legislation. No one can suggest that the Bill has not had adequate consideration either by the membership of Lloyd's or by the House.
    I hope that in a few moments we shall be discussing the subject of immunity. As Members of Parliament, we, too, possess an immunity. We should not abuse that immunity by delaying the Bill any longer.
    9.9 pm
    Mr. Nicholas Lyell: I should first declare an interest as a member of Lloyd's. I am grateful for the opportunity to intervene briefly to support the Bill. We must do everything we can to get an effective measure on the statute book this Session. I wish to make a few remarks about immunity, which has concerned many of my hon. Friends and other hon. Members. Indeed, it has concerned me a lot.
    I initially became involved with the Lloyd's Bill because of the things that I saw during my professional life as a lawyer. They showed that effective self-regulation by Lloyd's was made grossly difficult by the present situation and the antiquated nature of the Lloyd's Acts. That led to my strong desire that those Acts should be brought- up to date, just as the Bill seeks to do.
    The object of the Bill is to provide effective self-regulation of Lloyd's. I doubt whether any hon. Member would think it desirable that the self-regulation of Lloyd's should be handed over to the Department of Trade. It would be much less effective—that is not to criticise the Department—because it would not have the intimate knowledge of what goes on which, by the nature of Lloyd's, goes to the committee.
    If we effectively regulate a closed community in which people are trading in circumstances involving large sums of money, to a considerable extent the regulation decisions are likely to affect the financial interests of individuals, syndicates, brokers and members. On the other hand, if one is exposed to claims for damages in the way in which the public at large are exposed, except in certain privileged positions that are to some extent synonymous, one's opportunity of acting swiftly, firmly and fairly is likely to be greatly inhibited.
    What about brokers and underwriters at Lloyd's who might find themselves prevented from trading by regulation of the committee or who might find themselves suspended, or in other ways restricted, from trading at Lloyd's in the way that they would like? In my view, the limited immunity possessed by the Committee of Lloyd's is absolutely right. The committee must act fast on what might often be regarded as rumour. The litigation involving Lloyd's that I have been privileged to see from the inside shows that in a small minority of cases there are practices in the market that every hon. Member would wish to see promptly stamped out.
    Those practices could be proven in a court of law, but they are not easy to prove. Indeed, one case, although it never came to trial, involved tens of thousands of documents and resulted in justice. That exposed some of the things that I am anxious that the committee should be able to regulate.
    If the committee attempted to regulate those things in the present situation, or if it was likely to be sued for damages by the substantial institutions involved, it would either be greatly inhibited in the swiftness of its actions or find itself involved in litigation over damages that could continue for months or years. In addition, an enormous amount of committee time and effort would be required.
    Mr. Richard Shepherd: What distinction is there between the Committee of Lloyd's and that of the Stock Exchange, which might have to suspend members swiftly on information from within the market but which does not possess the immunity which the Committee of Lloyd's is now seeking?
    Mr. Lyell: I have to admit that I am not as familiar with the dealings of the Stock Exchange as I am with the dealings of Lloyd's. There are serious distinctions, some of which hon. Members have mentioned. One difference is that the committee of the Stock Exchange is concerned with dealings on the Stock Exchange by people in this country. Some of the practices that I have seen have emanated from overseas. They stretch from the underwriter to the broker, to those who give business to the broker and to people involved in the insurance world stretching over thousands of miles and many different jurisdictions.
    Sir Nicholas Bonsor: It is wrong to suggest that the Stock Exchange does not operate over thousands of miles and in wide areas overseas. Most of the leading stockholders in Britain have offices all over the world. They are regulated by the English Stock Exchange Council, and that operates without the immunities that my hon. Friend is now advocating.
    Mr. Lyell: My hon. Friend may well be right. The fact that the Stock Exchange seems to operate successfully at the moment without these immunities is not necessarily an argument that such immunities would not be desirable for the Stock Exchange, or beneficial for Lloyd's. [Interruption.] It does not follow as a matter of logic.
    May I explain to my hon. Friends why I am convinced that this kind of immunity is necessary? The detailed investigation which will be necessary to establish a decision at law, and which the committee would be involved in if challenged in litigation, would take up an enormous amount of time and would be inhibiting. That has to be balanced against the rights and protections necessary for those who are operating in the market.
    I am talking now about the big boys. I shall mention the underwriting names and members of the Sasse syndicate in a moment. The ability of the big boys to trade and their reputations might be greatly affected. The temptation to inhibit the committee by means of litigation would be enormous. It would be damaging because it would be so drawn out.
    I am grateful for the improvements that have been introduced by the Committee of Lloyd's. The committee has taken enormous trouble over consultation. I started as a critic. I think I was rather a nuisance. The committee might still think that I am. As a result of the change, however, one of the big boys who feels himself unjustly treated—perhaps because he lacked a proper hearing or because of swift action on a rumour which could not be substantiated—can now go to the court for an injuction or a declaration. That can be done quickly. Lloyd's can be challenged in a matter of days. In those circumstances, if injustice can be shown to have been done, there is a swift remedy. That is absolutely right. It is the kind of protection which they need and it represents a fair balance.
    Mr. Richard Shepherd: My hon. and learned Friend's knowledge of these matters is well known within the House, as is his interest in and concern for this matter. It is important, however, that he should show why an immunity that is not available to the council of the Stock Exchange, in relation to very substantial firms which have the ability to pursue their interests in the courts if necessary should be available to the Committee of Lloyd's. I still do not follow his reasoning in saying that it should be
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    available to Lloyd's and not available to the Stock Exchange. The argument that perhaps it should be available to the Stock Exchange is also slightly perverse.
    Mr. Lyell: My hon. Friend can read my speech to see whether it lacks logic or leaves something out. We are all anxious for effective self-regulation. I believe that the sums involved are so large, and so complex are the matters upon which the Committee will have to exercise its discretion, and so likely is it that there will be litigation, from people working in the market in Britain or overseas, that I genuinely believe that they will be inhibited if they are not given some protection. [Interruption.] Unfortunately, I have not examined the Stock Exchange's position and I am not able to comment on whether it is a wholly effective body. I do not know whether it feels slightly inhibited by the Bill. I am looking at the position of Lloyd's from what I know of it. I am exercising my judgment as to whether this is a fair and sensible balance in framing the legislation, and I think that it is.
    Sir Nicholas Bonsor: I should be grateful if my hon. and learned Friend could explain to the House who are the overseas giants who will be suing Lloyd's. My understanding of clause 14 is that it protects Lloyd's only against the people within the Lloyd's community. There are, of course, 5,000 members of Lloyd's living overseas and I do not believe that they are the people to whom my hon. and learned Friend is referring. Anyone outside the Lloyd's community can still sue, so the clause will not be relevant. How does that tie up with what my hon. and learned Friend has been telling the House so far?
    Mr. Lyell: My hon. Friend will know—it has become particularly clear in recent years—that large insurance interests overseas are playing a bigger and bigger part in the Lloyd's community through their connections with the Lloyd's community. My hon. Friend will know, from his knowledge of the insurance market, how the tentacles spread out. Although the action may be brought by a member of the Lloyd's community in Britain, the influence which bears upon him and the financial interests affected are spread far beyond Britain.
    Mr. Richard Needham: With regard to the stock market, will my hon. and learned Friend agree that one of the major differences is the degree of competition? One cannot reasonably compare the competition that exists between stockbrokers with what goes on at Lloyd's.
    Mr. Lyell: I am very grateful to my hon. Friend, because I think he has a point. There are members of the Stock Exchange present in the House who will correct me if I am wrong, but I was not aware that our Stock Exchange competed with, say, the stock exchange in Tokyo, in Australia, in New York, or in any other part of the world, in the same way or for the same business as that for which the insurance markets are competing internationally. My hon. Friend has made a genuine distinction, but other hon. Members with more knowledge than I have may agree or disagree with it later.
    Mr. Moate: Is not my hon. and learned Friend being very one-sided in his case? He accepted that one of the larger underwriting syndicates would or could suffer severe damage if action were taken against it—if it were suspended or restricted in any way. He referred to it as an incentive to take legal action or to seek judgment. Is it not

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    indefensible, to use his own words, that the committee should, without any restriction upon it, be able to take such action to damage major interests on the basis of rumour, to use his own words again? That rumour could be based on prejudice or personality disputes or be affected by the make-up of the committee. Is my hon. and learned Friend saying that unrestrained action of that kind, with an element of immunity, should be able to be taken against people. merely based upon rumour?
    Mr. Lyell: I am afraid that my hon. Friend was not listening with his usual care to what I said on the matter. I explained, when I was mentioning some of the litigation in which I have been involved, that many of the things which need to be regulated come into the market initially as a matter of rumour. I went on to explain that they could be proven in a court of law. I have seen the processes, involving tens of thousands of documents, through which that proof is marshalled. If the Committee of Lloyd's is to be obliged to marshal tens of thousands of documents and get itself involved in repeated litigation of this kind, its powers of regulation may be seriously inhibited.
    The point is not that the committee will act on rumour or prejudice but that the information may come initially as a matter of rumour. I get the impression, from my discussions with those with whom I have had the opportunity to speak in Lloyd's, that they would like to see a firm committee establishing firm control, and having the effective tools with which to do it. A balanced system of immunity is one of those tools.
    Viscount Cranborne: I have been following my hon. and learned Friend's argument with great care. Will he speculate whether the Committee of Lloyd's might have been negligent or might become negligent? If it becomes negligent, as my hon. and learned Friend the Member for Darwen (Sir C. Fletcher-Cooke) said earlier, how can the victims of that negligence obtain redress if immunity is granted?
    Mr. Lyell: I am glad that I gave way to my hon. Friend, because that leads me to the second part of my speech, which is to consider those people who might be in the same position as the Sasse syndicate. That is what my hon. Friend has in mind.
    All hon. Members will be anxious to ensure that victims are not wholly deprived of redress. However, one must consider against whom that redress should be. In the Sasse case—I do not claim to know everything about it—it is a moot point whether there was negligence in the Committee of Lloyds. It is fair to say that people settle legal actions for reasons other than the fact that they believe that they will lose them. Whether the Committee of Lloyds was negligent or not, all the members of the Sasse syndicate would have had profound causes of action against their managing agents, underwriters and others intimately involved. The reason why they did not sue them was that they were not worth the money by the time that they had taken the unwise decisions.
    As I understand the position—I shall be corrected if I am wrong—in the new era that will follow the enforcement of the Bill, managing agents and underwriters will be expected to be insured in a much more effective way than they have been up to now, and in a much more effective way than the Sasse syndicate. Secondly, the prime target will be the incompetent, negligent or stupid underwriter, with whom the names are in contractual link.
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    He must pay up. People will have their redress and will be looking for their redress to the right source. I hone that that answers my hon. Friend's point.
    Mr. Meacher: Does the hon. and learned Gentleman agree that, in answer to the points raised by his hon. Friends about the danger of the council taking damaging action against members on the basis of rumour, under the Bill that is much less likely to occur because of the increased power that will be put into the hands of the council to require disclosure of all relevant documents and to cross-examine all relevant parties? In the light of that, they will be taking action on the basis of knowledge and not rumour.
    Mr. Lyell: I agree with the hon. Gentleman. I became interested in the Bill because I was anxious that the committee should have adequate powers to deal with fraud and to stretch those powers beyond those with whom it is intimately related so that it can force documents out of people who would not be obliged to provide them by law and to look for explanations in the same way that the hon. Gentleman has pointed out. I was grateful to the Committee of Lloyd's for considering in enormous detail the points that I raised, of which all my hon. Friends approve.
    Mr. Archie Hamilton: To return to the Sasse case, does my hon. and learned Friend admit that, whether or not negligence was proved, the basis of that negligence was that the Conunittee of Lloyd's had information about what was gong on in America which it failed to hand on to the managing agents of the Sasse syndicate? If we have an equivalent problem in the future, it may well be that the management agents of the syndicate are doing everything right and have behaved immaculately and there will be a repeat of the position whereby the Committee of Lloyd's failed to hand on information that was relevant to the managing of that syndicate. Is my hon. and learned Friend happy that, in those circumstances, the Committee of Lloyd's should be immune from being sued for negligence?
    Mr. Lyell: I am not informed to the last degree about the Sasse case, but I understand that if there was an element of what my hon. Friend suggests it was lot the major cause of the problems that led to the downfall of the syndicate. It was probably a tiny drop compared to some of the buffoonery and incompetence with which some of the affairs of the syndicate were handled. Perhaps I should modify my Ianguage and refer to unwise underwriting practices involved in the management of the affairs of that unhappy syndicate.
    Rumours or information may reach the Committee of Lloyd's and if it were its duty to pass such information to everybody, some of those trading with Lloyd's might be protected from loss, but heaven help us if that is to become an obligation of the committee. Its function is to regulate the market fairly, equitably, swiftly and efficiently and not to seek to protect everybody against everything that is going on. There is a risk involved in trading at Lloyd's and hon. Members will agree that the people involved should look primarily to those who are managing their business.
    It may be helpful if I draw one or two parallels with the outside world. It has hardly been mentioned in the debate, but I know that, against the background of the public discussion of the position of trade unions, the question of

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    immunities has worried many hon. Members on both sides of the House. However, there are enormous distinctions between the immunities granted to trade unions and those that I hope will be granted to the Committee of Lloyd's as a regulatory body.
    To put it crudely, the immunities granted to trade unions allow them, for reasons of public policy which some think are time-expired, deliberately to cause damage to those with whom they are in dispute and often to the public. The immunities for Lloyd's ar e to be allowed to assist it in regulating the conduct of the market to protect its members and those who do business with it, including policyholders. That is a fundamental distinction.
    I respect the views of my hon. and learned Friend the Member for Darwen (Sir C. Fletcher-Cooke), but I do not believe that a system of filtering claims would greatly assist Lloyd's. Indeed, it would be a frightful millstone around its neck. If, in order to bring a claim against Lloyd's, a person had to show a prima facie case, all that he would have to do would be to establish facts that disclosed a cause of action and raised triable issues at law. Everyone would say "Oh my goodness, he has a triable case against the committee." That would be embarassing for the committee and it is not the sort of protection which I hope my friends would offer me.
    It is important that the committee has decided that there is to be no immunity for what is rather undescriptively called clerical or administrative error. The Committee of Lloyd's will have the duties of requiring people not to write too much business and of seeing that they make proper returns. If those returns are not properly scrutinised or show that people are writing business that they should not be writing, and names or others suffer losses, there will be no immunity. That is a sensible decision.The committee seeks immunity in circumstances where it has to exercise discretion.
    We are dealing with a quasi-judicial function and in such circumstances we often grant immunities. There is complete immunity for those in the courts and, for sound reasons, immunity for counsel practising in the courts, although it is possible for them to do damage to people in the course of their work. It is sensible public policy. It would be possible for Lloyd's to exclude the right to sue by contract. Those who have read the Fisher report will recognise that. Doing that for 19,000 people would lead to loopholes. It would be practical for the vast majority of those 19,000 people, but it is more sensible to provide the right through Parliament than to force Lloyd's back to contract.
    We give immunity to public officials under National Health Service Acts, public health Acts, food and drugs Acts and highways Acts in a number of public functions which, to a greater or lesser degree, are comparable with the position of the Committee of Lloyd's as a regulatory body. We should think long and hard after all the debate before we sink the Bill on the immunities issue.
    9.35 pm
    Mr. David Ginsburg: I follow the hon. and learned Member for Hemel Hempstead (Mr. Lyell) in broadly commending the Bill to the House. I hope that it will make reasonably speedy progress. Although it is before us under the Private Bill procedure, it is important to remember that it is not, in spite of what one has heard,
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    entirely sectional legislation. There is a very strong element of public interest to be borne in mind, as the Minister said. The Minister is responsible for overseeing the insurance industry. He has extensive powers. The public would find it strange if the legislation were to falter now.
    I join hon. Members in congratulating the Committee chaired by the hon. Member for Oldham, West (Mr. Meacher). The Committee contained a wide spectrum of political opinion. Its judgment is to be commended in terms of quantity—as can be seen by the documents on my Bench—as well as quality. That such a Committee can agree as it has is a powerful reason for accepting its recommendations and the House should take that into account.
    I am in no doubt about the divestment issue. The Committee was right to have that written into the Bill. The formula is right. I listened with care to the hon. Member for Oldham, West on the immunity issue. Superficially one might be attracted, as perhaps he was, to an insurance policy to cover all errors and omissions, but that is a simplistic solution, as I think the hon. Gentleman recognises. It does not take us away from litigation. There would still be litigation unless there were a "no fault" provision, and that would be outrageous.
    I had to agree with the hon. and learned Member for Hemel Hempstead on the immunities issue that the analogy with the Stock Exchange was spurious. It is right that there should be a level of immunity for many disciplinary bodies, but not, of course, as the hon. Member for Hackney, Central (Mr. Davis) said, total immunity. If one joins a club—and in an sense we are talking about a club—one must accept certain self-denying ordinances.
    The Bill is good. It might be only 99 per cent. perfect, and it might have some flaws, but the duty of the House is to weigh the few flaws that might be left in the Bill against what would be a greater fault—not having the Bill at all. Although few of my constituents are members of Lloyd's, my and other hon. Members' constituents have insurance policies, and the overwhelming public interest is to ensure that this important' element in the British insurance structure is properly regulated under a system that is compatible with the age in which we live. If the House were to delay the Bill unduly, there would be no Bill of this sort, which would be dangerous both in Britain and outside.
    Mr. Bob Cryer: The hon. Gentleman suggests that the immunities involved in the Bill are necessary to allow Lloyd's to work. Can he tell the House what he will be doing on Monday when the trade union movement will advance the argument that it requires immunities to allow it to work? If he is consistent, will he vote for or against the Employment Bill?
    Mr. Ginsburg: The hon. Gentleman has been in the House long enough to know that he and I would be out of order if we discussed that matter.
    Mr. Moate: The hon. Member for Dewsbury (Mr. Ginsburg) said that it would be wrong if the Bill faltered or was delayed. Why does he assume that the normal process of negotiation and seeking amendments on Report should not apply in this case? Other hon. Members seem to suggest, as he did, that the Bill would be killed if no

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    agreement were reached on certain matters. Is that not the normal procedure with Public Bills and, very much so, with private legislation?
    Mr. Ginsburg: I am not the sponsor of the Bill or a Minister. The Minister explained the Government's point of view and the Bill has already taken up much time. It is not for the Government, but, presumably, the Chair, to say how much time will be made available. However, it is pretty clear that if the Bill were to be extensively debated night after night there would be insufficient time and it would fall. I should regard such a failure as thoroughly undesirable.
    9.43 pm
    Mr. Nicholas Baker: I am grateful for the opportunity of supporting the Bill and the argument for it put forward by my hon. Friend the Member for Harrow, Central (Mr. Grant). This is an important measure. The net overseas earnings of Lloyd's during 1980 were no less than £560 million as against the net overseas earnings of the United Kingdom banking institutions of £314 million. We are, therefore, talking about a subsantial matter.
    All hon. Members who have spoken this evening agree about the urgency of bringing Lloyd's into the 1980s. It is no longer a gentleman's club with a membership of 450; it is now nearly 20,000 strong.
    I support the point made by the hon. Member for Dewsury (Mr. Ginsburg) that consideration of the Bill has been long and that thanks are due to the hon. Member for Oldham, West (Mr. Meacher) and the members of the Committee, to whom I pay tribute. I shall comment briefly on some of the points made in the debate. Many of my hon. Friends made full and eloquent speeches. Others, by means of interventions, also made many good points.
    My hon. Friend the Member for Epsom and Ewell (Mr. Hamilton) said that on three issues—fraud, divestment and immunity—Lloyd's was subject to considerable criticism. I believe that, that was right. However, he failed to recognise or acknowledge the way in which on every one of those issues Lloyd's, and the Bill, reflects a considerable shift, bearing in mind the comments made.
    We fail to appreciate that we are talking about establishing a system of self-regulation. To do that, we have laid down in considerable detail rules and regulations, some of which Lloyd's will adopt. The nature of any self-regulatory system is that it saves public expenditure and bureaucracy, and my hon. Friend the Under-Secretary has made that clear. However, disciplinary powers must be vested in the body running the system, and there must be rights of appeal as a result of the exercise of those disciplinary powers. That does not exist in the present Lloyd's community, but it is embodied in the Bill. Those regulatory powers must be exercised promptly and efficiently. My hon. and learned Friend the Member for Hemel Hempstead (Mr. Lyell) dealt extremely well with many of the points on immunity.
    Many of our institutions have self-regulatory systems, and it is essential that those powers should be exercised promptly. The council or committee is in a quite different position from that of professional bodies, such as my trade union, the Law Society. The members of the council or committee are more like judges, albeit in a self-regulatory system. Lloyd's is very different from some of the institutions cited. It deals with substantial risks. It is not a professional body; it is a body of traders, and the risks are quite different.
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    Lloyd's is also different because it has sleeping partners in a way that most professions do not. One of the Bill's essential functions is to protect sleeping partners who are the external members. That is only right. An unusual aspect of Lloyd's is that the potential liability of members is unlimited. That is the basis on which people become members of Lloyd's.
    My hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd), who made a considerable speech in a number of small slices, seemed to ignore the provisions in paragraphs 6.05 and 6.07 of the Fisher report dealing with the potential need for some form of immunity. Indeed, the hon. Member for Oldham, West made that point. I am informed that Mr. Kiln—whose resignation from the committee has been mentioned—had threatened to resign on an earlier occasion if the immunity under debate was not included in the Bill.
    I share the concern about the immunities that has been best expressed by my hon. and learned Friend the Member for Darwen (Sir C. Fletcher-Cooke). However, my hon. and learned Friend the Member for Hemel Hempstead has answered the points that he made. In what he said, however, he evinced less than complete familiarity about the circumstances in which the Sasse case was settled. Lloyd's was not proved to have been guilty or negligent. It believed that it had a full answer to the allegations that were made. However, the Sasse members extracted a settlement of the affair on practical grounds. Those grounds were that, if a settlement had not been reached by Lloyd's, its certificate from the Department of Trade—which allows it to continue in business and to trade—would have been threatened by the action by the Sasse members. That was one of the motivating interests that brought about that settlement. There is no secret about that.
    The result achieved in the Sasse affair was wrong. It may have brought some relief to the members concerned. No doubt, they will regard it as fair. However, the wrong people paid. Instead of the agents—the professional people involved—paying as they should, under the normal provisions of professional negligence that are in no way affected by the provisions of clause 14, it was the members of Lloyd's who, by a contribution, in the end paid the settlement to the Sasse members. Therefore, the Sasse case illustrates the danger to Lloyd's and the threat to the capacity of the council and the committee of being effective and proper self-regulatory bodies.
    Mr. Moate: Will my hon. Friend give way?
    Mr. Baker: I apologise to my hon. Friend. He has made many points. There are many points that I should like to get through if I am to try to answer some of the questions that have been posed.
    The hon. Member for Hackney, Central (Mr. Davis) made a point that may not cut any ice in the debate this evening—the importance of protecting Lloyd's reputation. He referred to the incredible and immeasurable damage that can be done to that reputation by small or minor allegations, disturbances or arguments. The protection of Lloyd's reputation is central to the confidence that people have in that institution.
    Viscount Cranborne rose—
    Mr. Baker: I apologise to my hon. Friend. I must continue. I cannot give way, even to my neighbour in the splendid county of Dorset. I assure him that that is only temporary.
    The answer to my hon. Friend the Member for Nantwich (Sir N. Bonsor), who is disturbed about immunity, is that, in the light of the comments made by my hon. and learned Friend the Member for Hemel Hempstead, we should consider who should serve on the council and on the committee of Lloyd's given the financial risks that are apparent if that limited degree of immunity were not available.
    Sir Nicholas Bonsor rose—
    Mr. Baker: I am sorry, but I shall not give way. My hon. Friend has had plenty of opportunities to make his points.
    The potential risks for members serving on the Committee of Lloyd's compared with members serving on the Committee of the Law Society are immeasurably greater. We are talking about a trading exchange dealing with risk. It is not a professional body.
    I have adumbrated the need for the limited immunity. The principal reason for that immunity, which has concerned every hon. Member, is that, if it were not allowed to the Committee of Lloyd's, there would be a gap through which a member, who wished to put liability on the members of Lloyd's would at least have some encouragement to drive a coach and horses. That would make the Committee of Lloyd's difficult to work and would discourage anyone serving on it.
    This is the last practical opportunity to get the Bill through Parliament. My hon. Friend the Under-Secretary of State said nothing that would contradict that conclusion. The present rules are unsatisfactory. Nationalisation under a totally statutory system would be worse. The Bill has been the subject of widespread consultation, and prolonged consideration by the House and our Committee. I commend it to the House.
    9.54 pm
    Sir Nicholas Bonsor: I first declare an interest in the subject of the debate. I am an external member of Lloyd's, and I am also, in particular, a member of the syndicate headed by Mr. Posgate and Mr. Kiln. In case there should be any misunderstanding, let me make it clear that the views that I express tonight—and which I shall express, I hope, when the amendment standing in my name on immunity is called—are my own, and are put forward in a serious attempt to get the Bill into a form which is generally acceptable—which, I am sad to say, at the moment it is not.
    I want to return to two or three of the matters that my hon. Friend the Under-Secretary of State for Trade raised earlier and on which he did not feel able to give way to me at the time. Despite the fact that the scent may now be a little cold, I shall pursue those matters.
    My hon. Friend said, first, that there are plenty of potential buyers for the businesses that will have to be sold off under the divestment clause. However, he did not mention the fact that many of those buyers will be foreigners. I cannot believe that it is the 'Government's policy to encourage good profit-making British industry to be sold off to foreigners.
    Secondly, my hon. Friend mentioned the overwhelming support that had been given by the membership of
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    Lloyd's to the representation in the proposed council. I cannot understand where my right hon. Friend got that idea. The external association of the members of Lloyd's who are not working in the community is adamant that it is not happy with the make-up of the council. As hon. Members are no doubt aware, the proposal for the council is that there shall be 16 working names, eight external names, and three co-opted members. That is not a satisfactory breakdown of the representation in that council. Unfortunately, I have only four minutes left, so I shall not have a full opportunity to explain why.
    Under the proposals, the chairman and deputy chairman of Lloyd's will be chosen by the council. I understand that they will be chosen on a straight vote—one vote for one man—and therefore there can be no question of the representatives of the outside names having anything other than an extremely marginal interest in who will be the chairman and deputy chairman of the Lloyd's community. That is not a proper representation, when one takes into account the enormous imbalance whereby there are 15,000 external names and 4,000 working names. I do not believe that the election of the chairman and the deputy chairman should be so exclusivey a matter for the working names.
    Furthermore, it was suggested—I think by the hon. Member for Oldham, West (Mr. Meacher) —that only the working names knew working names. No one who is a member of Lloyd's could possibly follow that argument. Working names in Lloyd's are known by a wide number of external names, and the relationship between them, in many cases, is quite close. To suggest that external names are not well qualified to vote for the working names to represent Lloyd's as members of their council is not right.
    In saying that, may I add my congratulations to the hon. Gentleman on the excellent work that the Committee did upstairs and for the way in which most—but, unfortunately, not all—of the Bill's shortcomings were dealt with in that Committee. It is unfortunate that the immunities clause, despite the undertaking given by the late Sir Graham Page in the House that it would be put into a schedule, is now back in the main body of the Bill as a result of what occurred in Committee. The fact that it is back in the main body of the Bill is a matter of concern to many of us. The immunities that it is sought to give to the council and the Committee of Lloyd's are not acceptable to many of the external names and to many of the people involved in the community.
    There is one—
    Mr. Anthony Grant rose in his place and claimed to move, That the Question be now put.
    Question, That the Question be now put, put and agreed to.
    Question put and agreed to.
    Bill, as amended, considered accordingly.
    Mr. Moate: On a point of order, Mr. Deputy Speaker. Can we assume that the Bill has now fallen, since no further date has been named for further consideration?
    Mr. Deputy Speaker (Mr. Bryant Godman Irvine): No. The position is that the hon. Member should now move new clause 1.
    Mr. Moate: Thank you, Mr. Deputy Speaker. I shall have great pleasure in moving new clause 1 at this stage. Unfortunately, others managed to talk out the Bill earlier

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    and I was not able to make my earlier speech on other germane matters. Could I just make one very important—
    Mr. Deputy Speaker: Order. It is now 10 o'clock. Bill to be further considered what day?
    The Second Deputy Chairman of Ways and Means (Mr. Ernest Armstrong): Tuesday 9 February, Sir.
    Mr. Richard Shepherd: Six months hence.
    Mr. Anthony Grant: Tuesday 9 February.
    Mr. Deputy Speaker: Tuesday 9 February. We now come to the motion on the business of the House.
    Mr. David Hunt: I beg to move—
    Mr. Tristan Garel-Jones: On a point of order, Mr. Deputy Speaker. I should like to know where we stand at the moment and I think it might be of assistance to all hon. members if you were to clarify to the House exactly where we stand. Are we discussing the Lloyd's Bill? Have we moved on from the Lloyd's Bill? Are we discussing amendments to the Lloyd's Bill? Or have we indeed moved on to the Local Government (Miscellaneous Provisions) Bill?
    Mr. Deputy Speaker: None of those is the answer. The Lloyd's Bill has been dealt with so far as it can be. We are now doing the 10 o'clock motion.
    Mr. Peter Mills: On a point of order, Mr. Deputy Speaker. I very much regret that I have not been in the House for this debate, and I am still confused as to what is happening at the moment. It would be helpful if it could be clarified from the Chair.
    Mr. Deputy Speaker: I am putting the 10 o'clock motion, which is standing on the Order Paper in the name of the Prime Minister.
    Mr. Moate: First, may I make it clear that I was going to speak on new clause 1 of the Lloyd's Bill, not about sex shops? Could I also ask for your clarification, Mr. Deputy Speaker, as to what happened with regard to further consideration of this Bill, because when you asked when this business was to be taken further the only voice that was raised was that of my hon. Friend the Member for Aldridge—Brownhills (Mr. Shepherd), who said "Six months hence".
    Mr. Deputy Speaker: Order. The voice which reached my ears said "Tuesday 9 February" and it was the voice of the hon. Member in charge of the Bill. We are now dealing with the 10 o'clock motion.
    Mr. Kenneth Lewis: On a point of order, Mr. Deputy Speaker. Could I just make the point, because I think it is important to have this on the record, that during the course of the debate on the Lloyd's Bill I raised with the Chair what would happen and what date there would be for the Bill if the business was not concluded tonight. The Deputy Speaker informed me that this would be considered in due course, and therefore a date has to be made available. I simply want to make that point to make sure that we do not lose the progress on the Bill.
    Mr. Deputy Speaker: The hon. Member in charge of the Bill named the day, and we are now dealing with the 10 o'clock motion.
    Mr. Richard Shepherd: On a point of order, Mr. Deputy Speaker. It is with very great regret that I put this point of order, but when you asked on what day there was a hiatus and I called out in the first instance "Six months hence".
    Mr. Deputy Speaker: Order. Only one person is in a position to name the day and that is the hon. Member in charge of the Bill. It was what the Second Deputy Chairman of Ways and Means said that I repeated to the House.
    Mr. Moate: This is a genuine inquiry about private business procedure, Mr. Deputy Speaker. You did then say that it was up to the hon. Member in charge of the Bill to name the date. Can we assume that in fact it is the Deputy Chairman of Ways and Means who allocates that time? Does it follow that the date mentioned is indeed the date for further consideration or do we still have to wait and see when time is allotted?
    Mr. Deputy Speaker: If the hon. Gentleman looks at the business on the Order Paper for 2.30 pm on the date named he will have the answer to his question.

    BUSINESS OF THE HOUSE
    Ordered,
    That, at this day's sitting, the Local Government (Miscellaneous Provisions) Bill may be proceeded with, though opposed, until any hour.—[Mr. David Hunt.]

    Local Government (Miscellaneous Provisions) Bill
    Question again proposed, That the clause be read a Second time.
    10.4 pm
    Mr. Raison: Before the House turned its attention to other matters I was answering the important debate that had been taking place since the early afternoon on the question of sex shops. I was commenting on the views of the hon. Member for Halifax on fines and a number of other matters. I had made the point that not only did we regard the fine of £5,000 as heavy, but that it could be repeated if the offence were repeated. What I did not say was that there was also power to revoke an operator's licence. That means that if someone persists in operating a sex shop in a way that is unlawful he can lose his licence and he cannot reapply for another 12 months. In the last resort, if he still persisted, an injunction could be taken out against him and he could be required to desist from the activity on pain of imprisonment.
    Hon. Members have argued that the operators of sex shops may well be wealthy people out to make a great deal of money, and on the -evidence quoted they may sometimes have done so. Nevertheless, if the House thinks about, the matter it will see that it would not be possible for a sex shop operator, however wealthy, to persist in defying the law.
    The right hon. Member for Lewisham, East (Mr. Moyle) argues that we should have a licensing system but says that certain activities covered by the scheme should not be permitted. That cannot make sense. This is not simply a technical problem that the draftsmen can sort out. One cannot introduce a scheme for licensing activities and then say that they cannot after all be permitted.
    I believe that the House as a whole recognises that, whatever the feelings of hon. Members about sex shops, the Bill is not the vehicle by which we can apply a blanket ban on them. That point was made by a number of my hon. Friends, including my hon. Friends the Members for Peterborough (Dr. Mawhinney) and for Southend, East who both accepted the limitations on what we can do in this provision. We must consider in common sense terms what we can do under the scheme. I believe that we have it broadly right.
    The right hon. Gentleman also raised a specific point about reasonableness. All the powers granted to local authorities under the schedule must be excercised reasonably. The same is true of all licensing powers, both under the Bill and elsewhere. It is clear that in applying the ground provided by paragraph 11(3)(c) for refusing an application for a licence a council must act reasonably. It must exercise its discretion under the paragraph on the merits of each case. The courts are the right place to test the reasonableness of an authority's decision.
    My hon. Friend the Member for Essex, South-East (Sir B. Braine) made his points forcefully, as he always does, but spoke with a good deal of compassion, as he also always does on moral questions. We in the House respect him for that. It is important that his views should be made known. We know that they are advanced with deep sincerity. We would always be reluctant not to go along with him completely. However, he perhaps envisages that we can place a greater load on the Bill that it will bear.
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    I hope that, having listened to what I have said about punishment, he will feel that the Bill's provisions are not derisory in their effect. Ultimately, they will hurt severely.
    Nor can I accept my hon. Friend's argument that the waiver provision is an open door to corruption. It is of specific use and, if a local authority did not want to have a scheme of control, it would not. There are no grounds to believe that this would be abused. If the local authority was permissive, it would not enter the business of licensing. The reasons for the waiver provision make good sense.
    The hon. Member for York (Mr. Lyon) raised a number of points. I do not go along with his picture of judges overturning local authorities which knew their own area, although I understand why he advanced that point of view and what he had to say about the past. I listened to the arguments of the hon. Gentleman on the likelihood of the present appeal provisions resulting in an unlooked for increase in the number of sex shops. I appreciate the grounds for this concern, although he does overlook a number of safeguards in the Crown courts, where a judge is helped by magistrates two of whom must be local and who would at least know the local area.
    The hon. Gentleman argued that the decisions of local authorities on numbers and suitability of premises are inherently of a nature that ought not to be subject to fresh review on appeal on the merits of the case. I shall consider the matter in the light of these arguments before the Bill is considered in another place. These arguments do not have the same force in relation to decisions by local authorities on the personal suitability of an applicant, on which it could not be argued that there should not be a right of appeal. We will, however, consider the hon. Gentleman's argument on the other matters, and I hope that he will be content with that.
    Several hon. Members spoke of the need for authorities to have what might be called a power of total ban and the desirability of a local authority being able to say that it will not have any sex shops in its area, for whatever reason. The answer must be that the licensing scheme is deliberately directed at the suitability of applicants and premises. The fundamental question about whether these activities should be allowed is a matter for general statutes on obscenity. The general law may or may not be unsatisfactory, but to try to tackle it by what is inevitably a back-door means is not the right way to go about it.
    Mr. Bob Cryer: One item that has concerned hon. Members on both sides of the House is the definition of sex cinemas and sex shops, which involves
    "acts of force, restraint, violence or cruelty which are associated with sexual activity."
    I understand the Minister's point of view that everything must be included in the definition so that that sort of sadomasochistic activity could not operate unlicensed but if a local authority decided, under the terms of a licence, that under paragraphs 2(1)(i) and 2(1)(ii) of the schedule
    "acts of force, restraint, violence and cruelty which are associated with sexual activity"
    should not be involved in the sex shops to which they give licences, would that meet the point? Could the Minister clarify whether a local authority could do that?
    10.15 pm
    Mr. Raison: The answer is "No". I do not think that it is possible to use that conditional provision, if I may so express it, for that particular purpose. While there can be

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    provisos to deal with the balance between a shop selling magazines on the one hand and sex-related articles on the other, together with other conditions that could be imposed, I do not think that it would be possible to go down that path. I had intended to deal with this matter in replying to the remarks of my hon. Friend the Member for Peterborough, who asked whether it would be possible to examine again the wording of paragraph 2(1)(ii). Hon. Members on both sides of the House have expressed concern. They do not like passing a law that refers to things of this kind. I have already stated that I believe these words are necessary. According to the advice I have been given, they are needed for technical reasons.
    We must not pass law that is obscure. These words fill in the picture. They give detail that I have been advised is necessary if the provision is to work effectively. If those words were dropped, we would be giving carte blanche to those who indulge in what are widely regarded as the most offensive of all the activities while retaining licensing control over activities that are marginally less offensive. That is the problem.
    The Government understand the anxiety that has been expressed. I cannot give any commitment. I cannot say that the wording will be changed in another place. I give the assurance, however that the Government will think about the matter carefully. If there is any way of redrafting the Bill to avoid these words, we shall be happy to consider it. I am not sure that a way will be found. I am, however, prepared to see whether there is a possibility of that happening.
    Dr. Mawhinney: I thank my right hon. Friend for that assurance, which removes one of the concerns that have been expressed. I am sure that I speak for the whole House when I say that hon. Members are grateful to my right hon. Friend.
    Mr. Raison: I am grateful to my hon. Friend. I wish to refer to the remarks of my hon. Friend the Member for Southend, East, which again were helpful. My hon. Friend understood the dilemmas that face the House in legislating.
    Mr. Terence Higgins: I should like to return to the stage that had been reached before the interventions. Does my right hon. Friend agree that it would be reasonable for a local authority, in deciding whether to license any such shops, to take account of the situation in surrounding areas?
    Mr. Raison: Yes, although I am not sure what my right hon. Friend means by "surrounding areas". Does he mean other districts?
    Mr. Higgins: Yes.
    Mr. Raison: I confess that I have not thought about that. I had assumed, instinctively, that the Bill was dealing with the locality under the jurisdiction of the local authority. I shall inquire into the matter. If my rather tentative answer proves wrong, I shall write to my right hon. Friend.
    Sir Bernard Braine: Would not that point be covered if the Minister were ready to accept amendment (g), on which my hon. Friend the Member for Peterborough (Dr. Mawhinney) and myself are seeking an assurance? We are listening carefully for it. I hope that my right hon. Friend will be able to say something about it.
    Mr. Raison: I do not think that I can give my, hon. Friend that assurance. It would not be right—I have already given the reasons—for the House to pass amendment (g). We are, however, trying to approach this matter in a sensitive manner. We have listened carefully to the debate. If, on consideration, we feel that there are ways of meeting some of the remaining anxieties of hon. Members, we shall try to do so.
    My hon. Friend the Member for Southend, East asked, what is a reasonable fee? This would be a matter for each local authority to decide. The authority would aim to cover its costs. It would revise its fees from time to time in the light of experience. The short answer to what the Government have in mind is that the fee should cover the cost of the licensing operation and its enforcement That is normal practice in licensing fees. That is what we intend by "reasonable".
    My hon. and learned Friend the Member for Thanet., West (Mr. Rees-Davies) also made an interesting and significant speech. He asked whether paragraph 11(3)(c) enables a local authority to say that nil is the appropriate figure for the number of sex shops in a locality. As I said earlier, but it bears repetition, nil could be the figure., provided that the local authority selected it and adopted such a policy in relation to particular applications in particular localities which it had properly considered. In other words, it is not the Government's view that the local. authority could simply decide that there will be no sex shops. It has to meet the conditions of the Bill, which means that it must have regard to matters such as the nature of the locality and the suitability of the person who seeks to run a sex shop. That is a somewhat qualified answer, but it is the position as I understand it.
    My hon. Friend also asked what
    "unsuitable … for any other reason"
    means in paragraph 11(3)(a). It is not a unique provision. It already appears in paragraph 3(6) of schedule 3. The licensing authority must direct its mind to whether the reason—whatever it may be—is such as to render the applicant unsuitable to hold a licence. A decision of this kind must not be capricious. It must be related to the running of a sex shop. A judgment must be made on whether the applicant is a fit person.
    Mr. Michael English: I hope that the right hon. Gentleman will forgive me for not being here earlier, but I was in Committee. Nottinghamshire county council and others are promoting Private Bills to retain their powers to license, among other things, sauna baths and massage parlours, where sex can occur—unlike cinemas and shops, where sex never happens.
    Mr. Cryer: My hon. Friend should not be too sure about that.
    Mr. English: I hope that the right hon. Gentleman wall go back to his Department and inquire why the Home Office does not wish that power, which Nottinghamshire county council has had for a long time, to be revived under the provisions to revive Private Acts. It seems odd that the Home Office should wish to encourage non-legitimate sauna baths and massage parlours in areas which do not yet have them, in spite of the fact that the hon. Gentleman is introducing this provision.
    Mr. Raison: The hon. Gentleman has invited me to go back to my Department and inquire about our view of these matters in Nottinghamshire. I am happy to say that, while

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    I do not intend to go back to my Department after the debate tonight to pursue the matter, I shall be happy to make inquiries and to write to him in the near future.
    I think that I have covered some of the points raised by my hon. Friend the Member for Peterborough, who put his case in an understanding way which attracted the sympathy of the House. I am grateful to him and to my hon. Friend the Member for Essex, South-East for the way in which they have understood the purpose of the Bill and also its limitations. As I have said, we shall consider very carefully what my hon. Friend has said. I think that he accepts that there should be a licensing scheme but is anxious about some aspects of it. One aspect is the impression that is created—a matter on which I touched a moment ago. As I said, my Department will be happy to look at the wording of paragraph 2(1)(ii), which has caused particular anxiety.
    We also propose to respond sympathetically to my hon. Friend's suggestion about paragraph 25, which provides that nothing in the Bill legalises anything that was unlawful before. For the avoidance of doubt, and so that people are quite clear on this important point, if putting that paragraph at the beginning rather than the end of the schedule will help to get the message across, we shall be happy to do so. I hope that my hon. Friend will find that helpful.
    While local authorities must look at the so-called locality in terms of their own areas, as I understand it a change in a locality's character resulting from a sex shop could be a relevant factor. I hope that that also provides my hon. Friend with some reassurance.
    I do not think that a strategy of mass appeals by sex shop owners refused a licence is likely to be successful.
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    That fear has been postulated and we have heard what might be called threats. I doubt whether it will come to pass. Of course, those owners will not succeed so long as the local authorities have done their job properly and obeyed the requirements placed on them.
    We have had a full debate on something' that has attracted much public interest and concern. I hope that the House will feel that the Government have adopted the right position. Earlier, I tried to say why I do not think it right to endorse the amendments moved by my hon. Friends and other hon. Members. On the other hand, we do not want to approach this in a rigid manner. We are all concerned to get the right answer. I therefore hope that the House will support our new clause and schedule.
    Mr. Cryer: The Minister has given a number of helpful assurances. If he finds that the paragraph on violence or cruelty cannot be defined in a more acceptable way, will he look at paragraph 12 and try to ensure that if a local authority decides that articles and implements associated with violence should not be sold it will have the power to say so when granting the licence? That is an important element that I believe meets the approval of both sides of the House.
    In an area where women were terrorised by the so-called Yorkshire Ripper for a considerable time, the connotation of violence is important, and local authorities will want the power to exclude the encouragement of violence that might be implicit in the legislation.
    Mr. Raison: Once again, I do not wish to be unhelpful. I cannot give any undertaking, but, in line with the assurances that I have already given, we shall think carefully about these things. Even so, I have outlined a number of practical and fundamental difficulties, and I shall have to leave the matter there.
    Mr. Douglas Hogg: This is the second time in 12 months or so that the Government have either introduced or endorsed a measure designed to control pornography. Last year, a Private Member's Bill received Government support. The House should welcome these proposals and express the gratitude of our constituents to the Government for the initiative they have taken.
    I entirely agree with the tactics and strategy behind the new clause. It is entirely right to give the local authorities the power to exercise this control. Furthermore, it is right that the powers conferred by the new clause should be of a permissive rather than a mandatory character.
    Closely related to this is the position of those engaged in these activities. Most hon. Members would say that those who manage these enterprises or engage in the production of their wares are doing something essentially distasteful and are guilty of a high measure of moral turpitude. We should not be unduly sensitive either to their commercial interests or to the representations that they might choose co make in this place or elsewhere.
    I think that the attitude taken by the Front Bench in rejecting the suggestion that the control should be by way of the planning permission law is entirely right. I do not think that it would be helpful to use planning control as a means of regulating sex shops. There are variety of reasons but two stand out.
    10.30 pm
    First, the grant of planning permission involves considerations of a planning kind and does not embrace the wider considerations contemplated by the new clause.
    The second and much more important point is that planning permission is particular to the site and not to the operator of the site, whereas a licence under the new clause is a licence to the operator.
    If we use planning control as a means of regulating sex shops, we shal I find it extremely difficult either to revoke a licence or to refuse to grant it on the grounds that the operator's conduct or demeanour is unattractive for one reason or another. Therefore, the decision of the Front Bench not to use planning control as a means of regulating sex shops is, I think, entirely correct.
    There has been criticism of the new clause to the effect that the penalties and sanctions are insufficient. Those criticisms were voiced by the hon. Member for Halifax (Dr. Summerskill) and by a Liberal Member, the hon. Member for Croydon, North-West (Mr. Pitt), who is not now in his place.
    The criticisms were unfounded for three reasons. The first and perhaps the most important is that the hon. Members who made the criticisms overlooked the fact that the local authority could secure an injunction to restrain unauthorised or non-conforming use. Therefore, there are already powers to prevent non-conforming use.
    Secondly, the maximum penalty of £5,000 relates to a specific offence. Taking, for example, a week, every day on which the offence is committed represents a separate offence. In respect of a non-conforming use for a week there is a maximum fine of £35,000 for the nonconforming branch.
    Lastly, and perhaps most significantly, where a branch, part of a wider chain, is not conforming to the law in various respects, that fact would itself be a reason for
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    another local authority to revoke a licence in respect of another branch owned and operated by that chain, so the sanction is considerable.
    The other major criticism of the Bill was made by my hon. Friend the Member for Essex, South-East (Sir B. Braine). I am sorry that he is not here now because I have to say that his speech in criticism of the Bill was among the least generous of the speeches, at great length, that I have ever heard him make. I usually listen to his speeches with respect, but his speech this evening was ungenerous.
    My hon. Friend said, in effect, that the Bill was to be denounced because it conferred some form of legitimacy or respectability upon activities which this House regards as disagreeable. First, I regard that criticism as utterly unfounded. It ignored the fact that the new clause makes it perfectly plain on its face that it does not make lawful what is already unlawful. Secondly, and much more to the point, he has to face the fact that for the most part these activities are already unregulated. The only way in which we can control them now is by the new clause before the House. The effect of the new clause will be to reduce the number of sex shops. Furthermore, it will impose restrictions on the operation of others. To pretend that it is not control that we should praise is to make a nonsense of fact and to turn a truth into obscenity. I am sorry that my hon. Friend tried to do it.
    I wish to answer an important criticism made by the hon. Member for York (Mr. Lyon). He said that the appellate procedure contemplated by the new clause enables justices and Crown courts to substitute their own judgment for that of local authorities. He is right, because that will happen. That raises two questions that the House must consider now or later. First, should we try to impose a fetter on the right of local authorities to make a policy decision not to have sex shops? I take the view that there should be no such fetter. I am sorry that my right hon. Friend the Minister of State takes a different view.
    Mr. Raison: I take a different view, as we do in the Bill. However, I made it clear that I am prepared to reconsider the matter.
    Mr. Hogg: I am grateful. If the House or my right hon. Friend is to agree with the proposition that there should be no fetter on the power of local authorities to make such policy decisions, where lies the appellate procedure? In those circumstances, one could not have an appeal to justices or to the Crown court. If the local authority has an unfettered right to make a policy decision, one cannot have a position where anyone can substitute his judgment for that of the local authority. The only appeal available would be to the High Court to determine one of two matters—first, whether the enterprise is within the scope of the prohibited activities or, secondly, whether the local authority approached the matter bona fide and within the powers conferred by statute. Those are the only points that can be the subject of appeal. If my right hon. Friend adopts the view that I urge upon him, he must substitute appeals to justices and the Crown court with appeals to the High Court and none other.
    Let us assume that my right hon. Friend does not take the view that I urge upon him but adheres to his present view that the, power of the local authority should be constrained as provided in the new clause. Where then lies the appeal procedure? Surely not where it presently lies, as provided for in the new clause, because that enables the

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    justices and, a fortiori, the Crown court to substitute their views for the local authority's views. The only question for the High Court is, first, whether the appellant is properly regarded as a sex shop or sex cinema and, secondly, whether the local authority is acting intra vires and in good faith.
    This is a valuable Bill. I am grateful to the Government for introducing it and I commend it to the House, but we must move with great caution on the question of appeals.
    Mr. R. C. Mitchell: My initial intention was to make a short speech congratulating the Minister on introducing amendments to try to solve the problems that exist in many hon. Members' constituencies, but as I listened to the right hon. Gentleman I became increasingly worried whether the Bill's provisions will achieve the purpose for which they are intended. It was obvious that I had misunderstood some parts of the Bill.
    The problem is clear. The character of large areas of some towns has been changed. The hon. Member for Peterborough (Dr. Mawhinney) described how the character of an area can be changed. A street in my constituency used to be full of family business shops—antique shops, greengrocers, grocers, hardware stores and so on. In the past two or three years those businesses have disappeared and been replaced by a succession of sex shops, sex cinemas, adult book shops and space invader alleys, and the character of the area has changed. That has reduced the value of surrounding property and provides no encouragement for owner-occupiers in the area, which is a housing action area, to improve their properties.
    Many local authorities have wanted to tackle the problem. A Bill in another place includes proposals for dealing with the issue in Hampshire, but the Government are right to attempt to legislate on a national basis, because we should not have different legislation in different counties.
    Initially, local authorities wanted to use planning legislation and use categories to deal with the problem. The difficulty is that no planning permission is required to convert a greengrocer's shop into a sex shop. Permission is required for a change of use to a fish and chip shop or a premises selling hot meals, because they come under a different use category. Most local authorities thought that the problem could be solved by putting sex shops and sex cinemas into a different use category. The Minister did not explain why that is not possible, but I accept that planning legislation cannot be used in that way.
    However, I congratulate the Minister on tabling the amendments, because they are a first attempt to deal with the problem. I hope that it will be successful. I was worried when I read paragraph 11(3)(c) of the new schedule:
    "that the number of sex establishments in the relevant locality at the time the application is made is equal to or exceeds the number which the authority consider is appropriate for that locality".
    I assumed that that meant that if a local authority wanted to say that there would be no sex shops in its area it would be able to do so, but the Minister has made it clear that that is not so. He said that he did not want to introduce a back door method of changing the obscenity laws. I do not see it like that.
    I was intrigued by the question posed by the right hon. Member for Worthing (Mr. Higgins). Can the New Forest district council, for example, say to someone who wants
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    to open a sex shop in its area that it will refuse permission on the ground that there is a sex shop in Southampton? If that is so, it will cause great difficulties because we in Southampton will say "Why us and not them?" I shall be interested in the Minister's answer to that and whether "locality" means inside the same district council area or whether one district council can argue that there is one in an adjacent area so that its area does not need it.
    10.45 pm
    The Minister having made it clear that he did not want the legislation used to stop sex shops altogether, the big problem is that it will be very difficult for any local authority which has no sex shops to stop the first coming in. That is always the key: stop the first sex shop and that stops the proliferation. From what the Minister said, it will be difficult to do that, if not impossible. If a local authority says that there cannot be a sex shop next door to a school, for example, the owner of that shop immediately asks whether there is an alternative site in the district.
    Local authorities will be in great difficulty, the Minister having said that they cannot refuse all sex shops. We will then have long arguments about what is a suitable locality. The hon. Member for Birmingham, Ladywood (Mr. Sever), who was here earlier, said that he knew what would happen—the downtown poorer areas would be granted them; courts or local authorities would say "If we must have one, we will put it there rather than in a nicer area." The central mid-town area of my constituency will suffer from that.
    I thought that two reasonable suggestions were made, one by the hon. Member for York (Mr. Lyon) and—
    Mr. Higgins: I do not think that the hon. Gentleman is right in saying that there is any obligation on a local authority to say what particular location it thinks is suitable.
    Mr. Mitchell: There is no obligation. When the first sex shop comes into an area where there are none, the owner makes an application and the local authority says that it does not think that it is a suitable area because it is adjacent to a school or whatever. The right hon. Member for Worthing is right that, theoretically, there will be no obligation on a local authority to suggest somewhere else. The owner then asks for another site in the city, makes another application somewhere else and so on. If the local authority continues to refuse all of them, the matter goes to appeal on the grounds of unreasonableness, of the local authority using the Act in a way it was not intended to by used—in other words, to stop all sex shops moving into an area.
    The hon. Member for York made a good point when he asked whether it was possible to limit the appeal procedure in these cases and to stop it there. Another possible alternative would be the procedure used with betting shops. As I understand it, if a person wants to open a betting shop, he must prove to the licensing authority that there is a demand for it. He must bring individuals to court who will be subject to cross-examination, and say, "There is no betting shop in my area and I want one." Why do we not try that idea with the sex shops and see how successful the owners are in getting local residents to attend court and say "We want a sex shop," and be subject to cross-examination?
    Mr. Race: Given the profitablity of this industry, would there not be a great temptation to the proprietors of

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    sex shops simply to give financial persuasions to members of the public to give whatever evidence was required in court?
    Mr. Mitchell: That is right and I was putting it forward as an alternative to my other idea. I much prefer the idea of the hon. Member for York, that in certain cases there should be no appeal.
    Even at this late stage—or even later—I hope that the Minister will agree to an amendment to enable a local authority to say, if it wishes, that no sex shop will be opened in its area and to enable it to refuse to renew licences if it does not want sex shops. Such decisions should be made by the local people and by those who have to suffer the disadvantages. The people know what they want, and the local authority—as their representative—should have the right to say whether it wants sex shops. Several hon. Members have made the same request and I hope that the Minister will consider it.
    This type of business is very profitable and the £5,000 fine peanuts, given the money that some make from it. However, I do not agree with the amendment to establish an alternative of six months imprisonment. At this stage, we should not overload our prisons for that offence. The reason that the Minister seemed to give for limiting the fine to £5,000 was that that would keep the matter within the bounds of magistrates courts. However, I understand that there is no rigid rule and that on occasions—such as Customs evasion cases—magistrates have a right to impose fines that are substantially heavier than £5,000. Therefore, I hope that the fine will be increased.
    In conclusion I hope that the Minister will introduce a suitable amendment in the other place to enable a local authority to refuse to have sex shops in its area.
    Mr. John Maxton: My speech will be brief. About 18 months ago a sex shop opened in a busy street in my constituency. It was sited only about 100 yards from a busy railway station used by many secondary school children and opposite a primary school. The site was obviously unsuitable for such a shop.
    Rightly, the shop aroused great anger among my constituents. I received an enormous number of letters—I have only about half of them with me—from my constituents, asking me to do something. This is the first opportunity that I have had to protest in the House on their behalf. I welcome the legislation. Some hon. Members have indulged in a little scaremongering. My hon. Friend the Member for York (Mr. Lyon) argued that if sex shops are licensed in this way they will sprout up all over the place, like betting shops, but that is a misinterpretation of events. Betting shops were illegal, but an increasingly large section of the population felt that they should be legal. However, sex shops are legal despite the fact that the vast majority think they should be illegal. That is the difference between betting shops and sex shops. Sex shops will not proliferate, because neither the local authorities nor the courts want them to. They will do everything in their power to keep the number under control.
    The Bill does not cover my constituency, because it covers, not Scotland, but England and Wales. However, the Minister might like to consider the old Scottish alcohol licensing device called the "veto poll". A referendum would be held in an area on whether public houses should be allowed. My constituency contains an anomaly. I do not have a pub, a licensed restaurant or an off-licence in my
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    constituency, but I have a sex shop. That is due to the old veto poll system, whereby the residents in a constituency could vote and say "No" to licences. That is the wrong system for pubs. We have now done away with it in Scotland. Perhaps the Minister will consider that as a device for licensing sex shops.
    I am glad that two of the Ministers from the Scottish Office are present. My major plea is that similar legislation should be introduced in Scotland. I hope that it will be better legislation. That is why I do not want to make detailed comments because the Scottish Ministers have an opportunity to look at greater length and in more detail at the legislation. Perhaps they will come up with better solutions.
    At present the Civic Government (Scotland) Bill is in the other place. I hope that amendments will be introduced to that Bill so that when it comes to this House we can examine the proposals for sex shops in detail and make proper amendments in proper time, and not in the hurried and rushed fashion with which this legislation has been handled.
    Mr. Peter Griffiths: Like every other hon. Member who has spoken on the subject, I shall preface my remarks by saying how grateful I am on hehalf of my constituents for the fact that the Minister of State and other Ministers from the Home Office have taken the courage to grasp this nettle and to make a valiant attempt to deal with a serious and growing problem. Having said that, I shall again follow the procedure of every other speaker, which is to criticise what is offered to us.
    One of the reasons why it may appear that some of us have been ungracious to the Government Department that produced the legislation for which we have been asking for many months is that limitations have been imposed on it because the new clause and the schedule have been tacked on to a Bill that was prepared separately and previous to any such intentions. As the debate has gone on longer than some of us would have wished, we have seen that there was sufficient interest in the subject for it to have been dealt with as a separate Bill. It should have had its own Second Reading. That would have given us an opportunity to have legislation that met the requirements of those who have been pressing for legislative provisions.
    The constituents whom I and the city council represent have not been pressing for a system of licensing. I believe that many other hon. Members would feel the same. The power of the local authority to prohibit sex shops was sought. There was no suggestion originally that there was an attempt to obtain a system of licensing. As the new clause has been added to a Bill that originates from the Home Office, the adverse comments made about the proposals that sex shops should be dealt with, at least in part, by the planning procedure, have gone by default.
    The use of planning procedures to deal with those problems has, surprisingly, proved successful in the past. The Portsmouth city council prevented the establishment of a sex cinema in Portsmouth. By using the existing planning regulations it was able to refuse planning permission on purely planning grounds. The difficulty arises when dealing with sex shops, where the existing legislation does not permit the local authority to intervene because the change from one shop to another is not a change of use.

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    11 pm
    Much of the discussion about licensing versus planning powers appeared to turn on which would be better. In the correspondence that I and Portsmouth city council have had with the Department of the Environment, when we sought to obtain extended planning powers, the suggestion always was that there should be a combination of licensing and planning. There are clear precedents for that. If one wishes to open an off-licence, a pub or a betting shop, one requires planning permission for the premises and a licence to operate. I see no reason why those relatively innocent and desirable activities should be regulated by licensing and planning permission, while these entirely undesirable activities are to be subject only to licensing.
    I listened carefully to what my right hon. Friend the Minister said about the process of licensing. I accept that there is no suggestion in the new clause and schedule that licensing certain activities in certain shops implies approval by the House of Parliament. However, I fear that when some shops are licensed they will use that fact to obtain an air of spurious respectability, and say that the fact that they have been licensed by the local authority suggests an element of approval. That is why I dislike the licensing procedure, and would have preferred an extension of planning for this purpose.
    I want to say a word about the procedures that are involved in the new clause and schedule. Relatively little time was available for hon. Members to see the proposals and table amendments. I am sure that I shall be criticised for not having tabled amendments, but by the time that I had obtained from my local authority the legal advice which it had to obtain after it saw the provisions, it was too late to table amendments for consideration today. I hope that the Minister will assure me, in the areas where I am told that legal questions arise for those who may have to operate the legislation, that either those difficulties are non-existent or that he will give them his attention.
    The first matter relates to new clause 1(4), where there is a requirement for the local authority to publish a notice stating
    "the general effect of that section".
    I wonder whether the notices that will be published by different local authorities, perhaps in a relatively small general area, will be different, and whether the summary should not be part of this legislation, so that the notice stating the general effect of the section would be the same in each local authority. I have been told that instead of using the words
    "state the general effect of that section",
    it would be better if the notice were required to
    "state the effect of paragraph 5(1) of the schedule".
    That paragraph is much shorter than the whole section, and it would be simpler to ensure uniformity between areas.
    There has been discussion of the problem of local authorities not having the right completely to prohibit sex shops. Paragraph 24(4) of the schedule, which refers to the procedure followed when a number of applications are received, is ambiguous. That is the opinion of legal minds, which may have to turn their attention to it in the near future.
    If several applications are made, which should be granted? There seems to be an implication that at least one of a series of applications should be granted. I see no reason why they should not all be rejected, if the local authority's rejection is within the terms of the legislation. The ambiguity is likely to lead to difficulties.
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    I am unhappy about the adoptive nature of the whole procedure. Local authorities may or may not decide to introduce the system of licensing. It may be thought that this is useful, to give local authorities some freedom. In an area where there are large concentrations of population, and numerous local authorities are closely associated with one another, it would be highly undesirable if one or several were to opt out of the licensing system. Doing so would not maintain freedom to operate simply in their areas, because the evil that the unrestrained spread of sex shops would create in one authority's area could easily spread in a densely populated urban conurbation.
    There is no reason why the system should not have been made compulsory. After all, the local authority would still decide whether the licences were to be granted. The licensing system should surely have been uniform across the country.
    With those criticisms, I return to the fact that I, the constituents whom I represent and my local authority greatly welcome the step forward that this legislation represents. But we are doubtful about its efficacy. We doubt whether it goes far enough, and we should like my right hon. Friend's assurance that if the legislation appears not to be working as he wishes he will relatively quickly return with new legislative proposals.
    Mr. John Wheeler: I support the new clause and schedule. The proposal essentially came from the City of Westminster, which thought that there should be some measure to control the spread of the sex industry and felt that there could be an appropriate amendment to the planning use category regulations as a means of providing the control. However, it was decided that that was an inappropriate use of the planning regulations, and it was then thought that a provision could be introduced in a Greater London Council (General Powers) Bill to create a licensing arrangement which, in the first instance, would apply only to the Greater London boroughs. Now my right hon. Friend the Minister of State has introduced his new clause and schedule, and I welcome them wholeheartedly.
    When the city council and Members of Parliament for the City of Westminster considered this problem, they took the view that they should not attempt to enter into the complex and fraught world of morality or censorship but should be concerned solely with the environmental impact of the sex industry in a number of streets or district. It is a straightforward proposal in that sense.
    I should like to give a brief illustration of what has happened in my constituency of Paddington in recent years. In one area, in the vicinity of Praed Street, the sex industry now occupies a dozen premises. The residential-community clustered around that area rightly asks why the environment should be changed to that degree. They want to know why the council or the Government cannot protect them from the sleaziness that seems to come in the wake of the sex industry. As tolerant, reasonable people, they say that they could perhaps put up with one or two of these premises, but not with a dozen or 20.
    The measure is designed to give the local authority the opportunity to license, to regulate and to close down. I assure the House that this is welcome to those who live in central London. I do not believe that agreement would have been easy if hon. Members had considered

    423
    censorship or prohibition. We would not have achieved the progress that so many reasonable people want the House to make.
    There is some peril in the proposal that the sex industry should be prohibited. It is beyond dispute that a number of citizens of the United Kingdom find it necessary to visit the premises of the sex industry and to pay a great deal of money for its wares and its services, whatever they may be. This is a very rich industry, and it is expanding. Any attempt to prohibit the industry would probably drive it underground and create a law enforcement problem of greater evil. is better to license and control, and to do so openly and above board. It is the view of the City of Westminster and its inhabitants—there are about 200 sex establishments within the city—that this is by far the most practical and sensible way to proceed.
    There are certain amendments in my name that cannot be considered tonight. I merely invite my right hon. Friend to study them with care. They originate from the experience of the city council and its officials, who already have considerable responsibility for the licensing and control of massage parlours. The experience that they have acquired in recent years lies behind the amendments.
    I agree with those hon. Members who have referred to the level of the financial penalties. If this measure is to be successful, particularly in central London, it is essential to recognise the importance of setting the maximum fine at the right level. I commend the movement from £5,000 to £10,000. The character of the industry is such that unless the penalties are right we shall not succeed in exercising the control that most people would like to see. commend the new clause wholeheartedly.
    11.15 pm
    Mr. Higgins: I am anxious that this legislation should go on to the statute book as soon as possible, so I shall not delay the House for more than a few moments. I very much welcome my right hon. Friend's proposals. As he knows, there have been a large number of representations from my constituents, both in petitions and in correspondence, expressing their concern about this issue.
    I believe that the regulation of sex shops should rightly be delegated to local authorities, as they are likely to reflect local opinion on these matters. Nevertheless, I wish to pick up one or two points from the debate so far.
    There can be few instances of a matter coming to attention and legislation being introduced in such a short time. My right hon. Friend has responded very quickly to the representations made to him, and he should be congratulated on that. Inevitably, in those circumstances, some facets of the question may not have been fully explored. Originally I favoured proposals to amend planning legislation, but the alternative now put forward may provide a satisfactory solution.
    Two points have arisen very recently, one of which was raised by the hon. Member for Southampton, Itchen (Mr. Mitchell). It would be wrong for a local authority to be obliged to say in which localities it would be prepared to license sex shops. That does not arise under the Bill as drafted. If an authority turns down one application and another arrives, that application in turn must be considered on its merits.
    The other point, which I raised in an intervention, is this, and here I take account of what was said by my hon. Friend the Member for Paddington (Mr. Wheeler). Straight prohibition may well involve considerable
    424
    dangers. One has only to consider the United States' experience of liquor prohibition between the wars to realise the problems that may arise. At the same time, a particular local authority may feel that as a neighbouring area has such establishments it is reasonable not to license any at all in its own area. To take a specific example, if there are such establishments in Brighton, it does not follow that they should necessarily also be licensed in Worthing.
    My right hon. Friend very kindly said that he would look at this point again. It seems to me that the authority concerned may reasonably look beyond its own boundaries—I stress the word "reasonably", which I think is relevant in the legal context—to see whether it is necessary or desirable to license any such establishments within its own boundaries. I very much hope that my right hon. Friend will consider that.
    My right hon. Friend has undertaken to consider whether a local authority should in some sense be required to license any such establishment in its own district. In my view, it should in no way be an obligation upon the local authority to do so. If such an obligation were imposed, it would be very difficult for the authority to take account of the views of people in the locality.
    Having said that, I am glad that this measure has been introduced, and I am particularly glad that it will cover existing as well as new establishments. I therefore wish my right hon. Friend's efforts well, and I am grateful to him for undertaking to consider specific points. I hope that this will prove to be not just a first step in the right direction, but the last that is necessary. Clearly, however, if in the light of experience that turns out not to be the case, we shall have to reconsider the matter without delay.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

    New Clause 2
    PROSECUTION FOR OFFENCES RELATING TO WORKS IN
    STREET

    '(1) In section 30 of the Public Utilities Street Works Act 1950 (enforcement)—

    (a) in subsection (2), for the words "Proceedings for the enforcement of there shall be substituted the words "Subject to subsection (2A) of this section, proceedings for an offence under"; and

    (b) the following subjection shall be inserted after that subsection—

    "(2A) A constable may take proceedings for an offence under section 8 of this Act without the written consent of the Attorney General.".

    (2) In section 312 of the Highways Act 1980 (restriction on institution of proceedings)—

    (a) in subsection (1), for the word "Proceedings" there shall be substituted the words "Subject to subsection (3) below, proceedings"; and

    (b) the following subsection shall be inserted after subsection (2)—

    "(3) A constable may take proceedings—

    (a) for an offence under paragraph (b) of section 171(5) above; or

    (b) for an offence under paragraph (c) of that subsection consisting of failure to perform a duty imposed by section 171(5)(a) above; or

    (c) for an offence under section 174 above,

    without the written consent of the Attorney General". '.— [Mr. Raison.]

    Brought up, and read the First tiime.
    Mr. Raison: I beg to move, That the clause be read a Second time.

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    This new clause results from the study that I promised the hon. Member for Nottingham, North (Mr. Whitlock) when he moved in Committee a new clause directed at this problem. As I said then, we agree that the standard of road work signing is not as good as it might be. We agree, too, that speed as well as vigour in enforcement should help to improve it. I pointed out, however, that works on streets could be carried out under other provisions than that at which the hon. Member's new clause was aimed, and that we needed to study them all as well as consult those concerned.
    I am pleased to say that we have done all that, and with results that I hope will please the hon. Member and the House. There are, in fact, three provisions that require those who may lawfully do works on or obstruct streets to sign, guard and light the obstructions they cause. One is section 174 of the Highways Act 1980, at which the hon. Member's new clause was directed. Another is section 8 of the Public Utilities Street Works Act 1950. The third is section 171 of the Highways Act 1980, which relates to the deposit of building materials on, or excavations in, streets. These, too, must be adequately signed, guarded and lit.
    In all three cases, the police currently need the written consent of the Attorney-General in order to prosecute for failure to comply with these requirements, or—in the case of the additional offence provided for in section 174(4) of the Highways Act—for unlawful interference with signs, barriers or lighting that have been provided. The police, I know, find the obligation a hindrance in prosecuting for what may be comparatively minor offences. We believe, too, that the offences are often readily remediable, in that the necessary signs may well be available but not in use because it is felt to be too much trouble to set them out. If the police can back up their identification of offences with firm threats of prosecution in default of instant remedy, immediate improvements should result.
    I am glad to say that my right hon. Friends agree that the consent requirement may in these cases be dispensed with, and the new clause effects the necessary dispensations.
    Mr. William Whitlock: I am glad that this acceptable provision has been introduced. I am grateful to the Minister for responding so readily to the undertaking that he gave in Committee that if I withdrew my new clause he would consider what could be introduced on Report.
    An AA survey of road warnings, which gave rise to my new clause, showed that half the holes in our roads are inadequately and often dangerously sign posted. Indeed, the Department of Transport, having looked at the AA survey last year, wrote as follows:
    "We too are concerned about the poor standard of signing of roadworks sites in general, and although limitation of resources has precluded us from making a similar study, I am told by my colleagues who regularly travel around the country that the findings in your Report are consistent with what they have observed".
    Agreement therefore exists on all sides that the public are endangered by the standard of road signing. That agreement will now be translated into more effective and expeditious action along the lines that I suggested in Committee. I therefore welcome the new clause.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

    New Clause 3
    BUILDING REGULATIONS

    `(1) The following subsections shall be substituted for subsections (1) and (2) of section 64 of the Public Health Act 1936 (passing or rejection of plans, and power to retain plans, &c.)—

    "(1) Where plans of any proposed work are, in accordance with building regulations, deposited with a local authority, it shall be the duty of the local authority, subject to the provisions of any other section of this Act which expressly requires or authorises them in certain cases to reject plans, to pass the plans unless they either are defective, or show that the proposed work would contravene any of the building regulations.

    (1A) If the plans—

    (a) are defective; or

    (b) show that the proposed work would contravene any of the building regulations, the local authority—

    (i) may reject the plans; or

    (ii) subject to subsection (1C) below, may pass them subject to either or both of the conditions set out in subsection (1B) below.

    (1B) The conditions mentioned in subsection (1A) above are—

    (a) that such modifications as the local authority may specify shall be made in the deposited plans; and

    (b) that such further plans as they may specify shall be deposited.

    (1C) A local authority may only pass plans subject to a condition such as is specified in subsection (1B) above if the person by whom or on whose behalf they were deposited—

    (a) has requested them to do so; or

    (b) has consented to their doing so.

    (1D) A request or consent under subsection (IC) above must be in writing.

    (2) The authority shall within the prescribed period from the deposit of the plans give notice to the person by whom or on whose behalf they were deposited whether they have been passed or rejected.

    (2A) A notice that plans have been rejected shall specify the defects on account of which, the regulation or section of this Act for non-conformity with which, or under the authority of which, they have been rejected.

    (2B) A notice that plans have been passed—

    (a) shall specify any condition subject to which they have been passed; and

    (b) shall state that the passing of the plans operates as an approval of them only for the purposes of the requirements of the regulations and of any such section of this Act as is referred to in subsection (1) above."

    (2) In section 65(4) of that Act (by virtue of which, among other things, in any case where plans were deposited, a local authority may not give a notice requiring the pulling down, removal etc. of the work if the plans were passed by the authority) after the word "deposited" there shall be inserted the words "and the work was shown on them".

    (3) This section, and section 30 below, so far as it relates to section 63 of the Health and Safety at Work etc. Act 1974, shall come into operation on such day as the Secretary of State may order made by statutory instrument appoint.'.—[Mr. Macfarlane.]

    (3) This section, and section 30 below, so far as it relates to section 63 of the Health and Safety at Work etc. Act 1974, shall come into operation on such day as the Secretary of State may order made by statutory instrument appoint.'.—[Mr. Macfarlane.]

    Brought up, and read the First time.
    The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker (Mr. Ernest Armstrong): with this we may discuss Government amendment No. 107.
    Mr. Macfarlane: In tabling the new clause and amendment No. 107, I am fulfilling the undertaking that I gave in Committee, and I am especially grateful to the hon. Member for Rotherham (Mr. Crowther) for withdrawing the new clause that he tabled. I trust that what we now propose will satisfy him.
    We are concerned here with the passing of plans deposited in accordance with building regulations, and our intention is to introduce flexibility into the present somewhat rigid procedures by enabling local authorities to pass plans provisionally or by stages where they would otherwise have to reject them outright. We have consulted all the local authority associations, a number of bodies representing the building industry, and also the building regulations advisory committee. There is general support for this proposal, which should save time and trouble on both sides. Measures contained in section 63 of the Health and Safety at Work etc. Acts 1974, which were intended to deal with this matter, have proved unsatisfactory, and are thus repealed.
    I commend the new clause and the amendment to the House.
    Question put and agreed to.
    Clause read a Second time and added to the Bill.

    New Clause 4
    POWER TO ENTER PREMISES (ACUPUNCTURE, ETC.)

    `(1) Subject to subsection (2) below, an authorised officer of a local authority may enter any premises I the authority's area if he has reason to suspect that an offence under section 15 above is being committed there.

    (2) The power conferred by this section may be exercised by an authorised officer of a local authority only if he has been granted a warrant by a justice of the peace.

    (3) A justice may grant a warrant under this section only if he is satisfied—

    (a) that admission to any premises has been refused, or that refusal is apprehended, or that the occupier is temporarily absent, or that the case is one of urgency, or that an application for admission would defeat the object of the entry; and

    (b) that there is reasonable ground for entry under this section.

    (4) A warrant shall not be granted unless the justice is satisfied either that notice of the intention to apply for a warrant has been given to the occupier, or that the occupier is temporarily absent, or that the case is one of urgency, or that the giving of such notice would defeat the object of the entry.

    (5) A warrant shall continue in force—

    (a) for seven days; or

    (b) until the power conferred by this section has ben exercised in accordance with the warrant,

    whichever period is the shorter.

    (6) Where an authorised officer of a local authority exercises the power conferred by this section, he shall produce his authority if required to do so by the occupier of the premises.

    (7) Any person who without reasonable excuse refuses to permit an authorised officer of a local authority to exercise the power conferred by this section shall be guilty of an offence and shall for every such refusal be liable on summary conviction to a fine not exceeding £200.'.—[Mr. Raison.]

    Brought up, and read the First time.
    Mr. Raison: I beg to move, That the clause be read a Second time.
    The clause relates to the provisions for acupuncture, tattooing, ear-piercing and electrolosis. It has been accepted that there could he occasions when this part of the Bill, as brought into force in any area by resolution of the local authority, would be ineffective if its authorised officers could not enter premises on which it was suspected
    428
    on good grounds that an offence against it was being committed but to which access had been denied or permission for access could not be obtained. The power of entry as conferred by the new clause is made subject to safeguards. A warrant must be obtained and before granting it a justice of the peace must satisfy himself that there are adequate grounds for its issue because access to premises and the enforcement of the law cannot be secured in any other way.
    Mr. R. C. Mitchell: Was this power asked for by the local authority associations? Why was it not in the Bill as drafted? Was it asked for by the associations subsequently? The House should always be reluctant to grant local authority officers the power of access to somebody's premises unless there is a good reasor for so doing.
    Mr. Raison: I understand that the power was not asked for by the associations. We believe it to be necessary.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

    New Clause 5
    CONTROL OF FLY-POSTING
    Power to remove or obliterate placards and posters.

    'In the Town and Country Planning Act 1971—

    (a)the following section shall be inserted after section 109—

    109A—

    (1) Subject to subsections (2) and (3) of this section, the council of a district or a London borough may remove or obliterate any placard or poster—

    (a) which is displayed in their area; and

    (b) which, in their opinion, is so displayed in contravention of the advertisement regulations.

    (2) Subsection (1) of this section does not authorise the removal or obliteration of a placard or poster displayed within a building to which there is no public right of access.

    (3) A council shall not exercise any power conferred by subsection (1) of this section where a placard or poster identifies the person who displayed it or caused it to be displayed unless they have first given him notice in writing—

    (a)that in their opinion it is displayed in contravention of the advertisement regulations; and

    (b)that they intend to remove or obliterate it on the expiry of a period specified in the notice.

    (4) The period to be specified in a notice under subsection (3) of this section shall be a period of not less than two days from the date of service of the notice.

    (5) In this section 'the advertisement regulations' means regulations made or having effect as if made under section 63 of this Act.';

    (b)in section 269(2) (provisions specified in Part of Schedule 21 to have effect as if the Isles of Scilly were a district and the Council of the Isles were its council) after the word "Schedule" there shall be inserted the words "and section 109A of this Act";

    (c)the following subsection shall be inserted after subsection (4) of section 280 (rights of entry)—

    "(4A) Any person duly authorised in writing by the council of a district or a London borough may at any reasonable time enter any Land for the purpose of exercising a power conferred on the council by section 109A above if—

    (a) the Land is unoccupied; and

    (b) it would be impossible to exercise the power without entering the Iand"; and

    (d) in Part 1 of Schedule 21 (provisions that may be applied to the Isles of Scilly as if they were a separate county) for the words "sections 104 to 111" there shall be substituted the words—

    "Sections 104 to 109.

    Sections 110 and 111.".'.—[Mr. Macfarlane.]

    Brought up, and read the First time.
    Mr. Macfarlane: I beg to move, That the clause be read a Second time.
    The new clause is the result of a commitment which I gave in Committee on 22 December when we were discussing new clause 4, which was tabled by the hon. Member for Rotherham (Mr. Crowther), who brought his considerable local government experience to bear on our Committee deliberations.
    The intention of the clause is to enable district councils to deal more effectively with the nuisance of fly-posting. I am glad to say that useful discussions have taken place between officials in my Department, representatives of the local authority associations for England and Wales and my right hon. Friends the Secretaries of State for Wales and Scotland. I understand that the provisions in the clause are likely to be acceptable to the district councils that will have to operate them and to the Outdoor Advertising Council, which has also been consulted.
    With the purpose of remedying many deficiencies, the clause inserts a new section 109A in the 1971 Act, which will give district councils in England and Wales and borough councils in greater London a discretionary power to remove or obliterate any placard or poster in their area that is being displayed illegally in the sense that it contravenes the control of advertisement regulations. That is similar to the power proposed by the hon. Member for Rotherham. The reference to a bill has been omitted because that term is synonymous with a poster.
    I am confident that all the proposals that are set out in the clause meet with the approval and satisfaction of all the authorities and associations. I am aware that in one sense the provisions may be a disappointment. The National Association of Local Councils has represented to me and to the hon. Member for Rotherham that the power to remove or obliterate illegal placards and posters should be exerciseable by parish councils and town councils. I take the association's point that that would help local councils to assume more responsibility for the appearance of local communities, which is clearly a desirable objective in its own right.
    After careful consideration I have decided that the power should be confined to district councils. That is because the new power is deliberately linked with the system of planning control over outdoor advertising for which district councils are statutorily responsible. I am grateful to the hon. Member for Rotherham for raising this matter and giving us the opportunity of making a most useful amendment to the Bill.
    11.30 pm
    Mr. Greville Janner: I should like to make a brief point on the words "placard or poster". I invite the Minister to consider adding to the clause in another place one of the most offensive ways in which people by using spray paint, desecrate buildings in some cases and deface them in all. That is not covered by the words "placard or poster".
    Desecrations and defacements are made to the walls not only of buildings but of railway stations. The most
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    unpleasant examples of desecration that I have seen have been National Front slogans on the walls of the Dundee synagogue.
    At present, a council does not have power to remove or obliterate these nasty, evil scrawlings. The new clause does not remedy that defect. Therefore, I ask the Minister to consider adding to this new clause the words "spray painting or otherwise", to give local authorities power to deal with the most common form of racist wall writing.
    Mr. R. C. Mitchell: Will this provision in any way alter or supersede the law relating to the fly-posting of election material during an election? Normally, if there is any complaint about the fly-posting of election material, the party agent will receive a telephone call and then he, or one of his representatives, will rush out and remove the offending material.
    Subsection (3) provides:
    "A council shall not exercise any power…where a placard or poster identifies the person who displayed it or caused it to be displayed unless they have first given him notice in writing".
    Who is responsible for removing offending election material? Will the council remove it and bear the cost of such removal? The position at the moment is that the political party concerned is responsible for the cost of removal of such material.
    Mr. D. N. Campbell-Savours: I should like to add my support to the suggestion about spray painting made by my hon. and learned Friend the Member for Leicester, West (Mr. Janner). I hope that the Government will take note of the point that he made. It is an important point. Tension and anxiety are increased in any community where these signs are left on walls. I hope that the Under-Secretary of State will respond in the spirit in which my hon. and learned Friend made his suggestion.
    Mr. Macfarlane: I take note of the point made by the hon. and learned Member for Leicester, West (Mr. Janner), supported by his hon. Friend the Member for Workington (Mr. Campbell-Savours). Much of the problem lies in the fact that these offensive signs remain for all to see. I undertake to find out the precise legal status. In many cases, the power is available to local authorities to take action. The question is whether they have the modern technology to remove the signs swifty. That has proved to be a problem in many parts of the country.
    I hope that the hon. Member for Southampton, Itchen (Mr. Mitchell) was not speaking from personal experience on behalf of his agent during elections, by-elections or general elections. I am sure that is not an acknowledgement of his guilt in recent years.
    The procedure embodied in subsections (3) and (4) has been kept to the minimum by confining the requirement to advance notice. It applies only to someone who can be identified from the poster or placard. One of the conditions of our election legislation is that the names of the printer and publisher shall appear at the foot of all such documents. I undertake to look into this matter. The persons whose names appear as the printer and publisher—particularly the publisher—will have some responsibility in this respect.
    The House is obviously concerned about these matters. I undertake to consider them between now and when the Bill goes to another place.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

    New Clause 7
    SELF-OPERATED LAUNDRIES

    '(1) For the purposes of this section premises shall be deemed to be used as a self-operated laundry when facilities are provided to the public on those premises on payment for washing or dry cleaning clothes or other articles by machines operated primarily by the customer.

    (2)

    (a) The occupier of premises in a district used either partly or wholly as a self-operated laundry shall, in order to ensure that the plant, and machinery installed in the premises for the purpose of the business are so fitted and maintained as to avoid risk of explosion, leakage of fluids or vapour and danger to the persons operating or in the vicinity of the plant and machinery, cause such plant and machinery to be inspected at least once in every fourteen months after the appointed day by a competent engineer appointed or approved by an insurance company or agreed between the occupier and the local authority and the occupier of the premises shall send to the local authority a certificate (hereinafter called "a certificate of inspection") by an insurance company or by such an engineer certifying the result of the inspection.

    (b)If

    (i) before the expiration of fourteen months and fourteen days from:—

    (a) the appointed day, or

    (b) in the case of premises which are not used as a self-operated laundry before the appointed day the date on which the premises are first used as a self-operated laundry, or

    (c) (except in the case of the first certificate of inspection to be made in respect of premises) the date on which the last certificate of inspection was sent by the occupier of the premises to the local authority; the occupier of the premises fails to send a certificate of inspection to the local authority, or

    (ii) a certificate of inspection sent to the local authority

    fails to show that the plant and machinery upon the premises are so fitted and maintained as aforesaid;

    the local authority may make application by way of complaint to a magistrates' court who may order the closing of the premises to the public until a certificate of inspection is received by the local authority showing that the plant and machinery are so fitted and maintained as aforesaid.

    (c) Any person who contravenes an order made by a court under paragraph (b) of this subsection shall be liable to a fine not exceeding two hundred pounds and to a daily fine not exceeding twenty pounds.

    (3)

    (a) As from the appointed day if in the opinion of the local authority any substance is used on the premises in connection with any dry-cleaning process which is likely to be dangerous the occupier shall, if so required by the local authority, display such precautionary notices as may be agreed between the local authority and such bodies as appear to them to represent the trade or business of self-operated laundries or as failing such agreement may be reasonably required for the purpose of warning the public.

    (3)(a) As from the appointed day if in the opinion of the local authority any substance is used on the premises in connection with any dry-cleaning process which is likely to be dangerous the occupier shall, if so required by the local authority, display such precautionary notices as may be agreed between the local authority and such bodies as appear to them to represent the trade or business of self-operated laundries or as failing such agreement may be reasonably required for the purpose of warning the public.

    (b) Any person who contravenes any provisions of this subsection shall be liable to a fine not exceeding two hundred pounds and to a daily fine not exceeding

    Mr. Campbell-Savours: I beg to move, That the clause be read a Second time.
    The clause stems from the view of the local authority associations that control over the maintenance of machinery in self-operated laundries is inadequate, and they have provided me with evidence of accidents in these laundries, which are invariably left unattended by their owners.
    In June 1969 in Brixton a child aged 8 had her arm ripped off in a spin dryer. In January 1972 in Salford a child aged 8 caught her right arm in a spin dryer and
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    suffered severe injuries. The length of her right arm was shortened. In October 1973 a child was pushed into a machine. In that same month a child aged 9 was overcome by fumes after its head became trapped in a self-operated dry cleaning machine. In August 1974 a child had its right arm ripped off by a washing machine. In June 1976 a child had an arm ripped off in a spin dryer. In August 1976 a child aged 13 has her arm ripped off in a spin dryer. In March 1977 a machine failed to operate, leaving a woman and her husband unconscious from the fumes. A child died. Two years ago another child lost an arm. A great many such cases have been recorded, and it is clear that the 1974 Act is inadequate in its provision for supervision.
    There are precedents for the new clause in the Manchester Corporation (General Powers) Act 1971 and the Salford Corporation Act 1973. Last July the Greater Manchester Bill was enacted, but the promoters failed to obtain the powers that had existed in Manchester under the previous local legislation. Obviously, Manchester has a particular interest in seeing the new clause become law. It will cover all local authorities that feel that they have a special problem.
    No doubt the Minister will suggest that the 1974 Act is adequate to deal with the problem. The safeguards under that Act are inadequate, however, and I understand that the Health and Safety Executive has recently modified its stance on the matter. The issue is clearly one of balance. The Act places upon occupiers of premises a responsibility to ensure that persons using the premises and the facilities provided are not subjected to health and safety risks. Whilst routine visits or inspections after a complaint are made under the Act, it is felt that they would be unlikely to reveal all defects that are likely to arise.
    The former local Act powers would impose on the occupier an obligation to have his plant and machinery inspected at least every 14 months by a competent engineer and to supply a certificate of inspection to the local authority. In the event of hazards existing or potential dangers to health being indicated on the certificate, the local authority would be empowered to apply to the local magistrates' court for a closing order to apply until conditions were improved sufficiently to allow a satisfactory certificate to be issued.
    That position applied in Manchester before the Greater Manchester Bill became law last year. We are trying tc. reestablish those powers with the new clause. I hope hat the Minister will respond by accepting that there is a need for the powers on the basis of the Manchester experience, and perhaps say that he is willing to accept the clause.
    Mr. Raison: I understand the concern that has been aroused by the accidents that the hon. Gentleman described, but he must accept that accidents will persist whatever the legislation. Legislation in this area is essential, as has long been acknowledged, but no legislation will automatically prevent accidents from ever happening.
    The advice I have is that local authorities have sufficient powers under the Health and Safety at Work etc. Act 1974 and the Health and Safety (Enforcing Authority) Regulations 1977 (SI 1977/746), as amended, to ensure that self-operated laundries are safe and without risks to health. The regulations enable local authorities to enforce the 1974 Act in respect of self-operated laundries and coin-operated dry cleaning units in launderettes and similar premises.

    433
    Among other things, launderette operators have a duty under the 1974 Act to maintain the plant, machinery and installation in a safe condition, and local authorities have more appropriate and effective powers in the form of improvement and prohibition notices under sections 21 and 22 of the Health and Safety at Work etc. Act 1974 to deal with problems than an application to a magistrates court for a closure.
    Recently, in relation to some local Acts, the inclusion of certain limited provisions—for example, for periodic inspection of premises—has not been opposed where they could be shown to complement or at least stand side by side with national health and safety regulations. I am not convinced, however that such regulations provisions are necessary or that what it is desired to achieve cannot be achieved through the use of the powers given to local authorities under the Health and Safety at Work Act.
    We have always, when talking of legislation, to see whether there is a real gain in whatever it is proposed should be added to the statute book, and whether there are costs which would be incurred by local authorities, would in operating schemes, incur costs without a commensurate result in avoiding accidents.
    For those reasons, I believe that it would be inappropriate to make this provision for self-operated laundries.
    Mr. Pitt: I accept that there are regulations which would appear to cover self-operated laundries, but does the Minister agree that with self-operated laundries and self-operating dry cleaning facilities there are considerable additional and specific hazards because they are operated not in the usual place of work, but by unqualified people, coming in and going out? The use of perchloroethylene, a highly toxic gas, in the cleaning machines is a very dangerous method of cleaning.
    I am surprised that the Minister cannot see the reason for the new clause. It would be an important addition to the Bill, in that it would make it a specific duty for the local authority to pay attention to a situation which does not arise at a place of work and cannot be controlled on a day-to-day basis. The machines are used by unqualified people who come and go, and special legislation is required.
    Mr. Campbell-Savours: I am worried by the fact that the Minister rejects the new clause, because the local authority associations have made representations to him which are grossly at variance with the case that he put to the House tonight and suggests that they do not have a problem. They have a problem, and Manchester corporation would not have been as vigorous as it has been in trying to re-establish a legislative right that it had prior to last year if that legislation had not been important to it. Manchester corporation believes that it has lost something, and I have come to the House to try to restore to it a right that it thought was important, and also to show that that right exists for every local authority in Britain.
    I should have thought that the costs to the local authority were minimal. The costs to the NHS arising in the event of an accident would be far more substantial. Although I accept that my suggested provision would not end accidents, it would ensure that machinery was
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    adequately inspected and certificated on a 12 to 14-months basis, and thus ensure better standards of maintenance of machinery in the premises concerned.
    I thought that the Minister might have responded more favourably.
    I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn

    New Clause 8
    SILENCERS FOR INTERNAL COMBUSTION ENGINES

    '(1) A stationary internal combustion engine shall not be used in a district unless an effectual silencer is provided and used on the exhaust of the engine.

    (2) If any person uses such an engine in contravention of the foregoing subsection, or causes or permits such an engine to be so used, the local authority may give him notice that the engine is being or has been so used; and if, after the lapse of such time from the service of the notice as may be reasonably sufficient for remedying the cause of complaint, he uses the engine as aforesaid, or causes or permits it to be so used, he shall be liable to a fine not exceeding two hundred pounds and to a daily fine not exceeding twenty pounds.

    (3) Any person served with a notice under this section may appeal to a magistrates' court on the grounds that the notice is not justified.

    (4) An authorised officer of the local authority shall have the right in respect of any premises which he has entered in pursuance of the powers conferred by section 287 of the Act of 1936 as incorporated with this Act to inspect and test any silencer on the exhaust of such an engine found on the premises and for that purpose to require the silencer to be taken off; and any expenses incurred under this subsection by such an officer may be recovered by the local authority from the occupier of the premises if there is found on the premises such an engine which is not provided with an effectual silencer on the exhaust therof.

    (5) Nothing in this section shall apply to an internal combustion engine used below ground in a mine within the meaning of the Mines and Quarries Act 1954.

    (6) For the purposes of this section "a stationary internal combustion engine" includes a movable internal combustion engine whether part of other apparatus or not when stationary in the district.

    (7) This section shall not apply to an internal combustion engine used for the propulsion of a vehicle.'.—[Mr. Campbell-Savours.]

    Brought up, and read the First time.
    Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take new clause 9—Reduction of noise from air-powered tools and compressors.
    Mr. Campbell-Savours: I beg to move, That the clause be read a Second time.
    The clause relates to nuisance, and it stems from the difficulties that environmental health officers have in implementing current legislation.
    The power set out in the clause is one that the Manchester corporation had under previous local Acts. It was lost as a result of the introduction of the Greater Manchester Act 1981. The Control of Pollution Act 1974 gives powers to serve notices, but the Manchester corporation's former powers were more effective than the powers that they have under the 1974 Act. The ideal behind this new clause is to put teeth back into the powers of local authorities to deal with the problem.
    11.45 pm
    New clause 9 deals with the problems of noise from air-powered tools and compressors. Its origins are the same as the previous new clause. It arises from the problem of Manchester corporation losing powers that it had under local Acts when the Greater Manchester Bill was introduced last year.

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    The amendment is loose in that it covers a moving target of technological advance. The reference in the clause is to the circumstances and the current state of technical knowledge being applied to any changes made to equipment. The power was originally available in the Noise Abatement Act 1960 and in the Public Health Act 1936. Action under those Acts involved proof of nuisance, service of a notice, determination of appeal, a hearing to obtain an order of the court, proof of continuance and prosecution of breach of any order made by the court. Those who have been required to use that legislation maintain that the procedure is slow and cumbersome. Indeed, it was unenforceable against short-term noise from muffled, unsilenced compressors. The Manchester Corporation Act (General Powers) 1971 gave effective powers, but they were lost last year.
    No doubt it will again be argued by the Minister that the Control of Pollution Act 1974 deals adequately with the problem. However, Manchester corporation says that the previous powers are needed again. It maintains:
    "The effect of the repeal of the local legislation has been to remove the deterrent value of that legislation and while most contractors observe the need for effective and efficient sound-reducing measures to be adopted, some smaller contractors and sub-contractors of major statutory undertakings tend to be ignorant of the need to suppress unnecessary noise. This has led to a worsening of environmental noise arising from the use of breakers and compressors in streets and can result in severe noise nuisance in areas where substantial street works are being carried Out. While the powers under the 1974 Act apply to noise arising from streets and construction sites, because of the long term occupancy of a construction site, control can be effected but not so readily as under the repealed legislation and the control over noise from streets in now virtually non-existent in practical terms."
    In this new clause we are trying to establish a right for all local authorities to enjoy the powers that Manchester corporation had before the introduction of the Act last year. It is an emikently sensible way in which to proceed, because it is clear that the experience of a local authority—no doubt other local authorities could have such powers—is that without those special powers it is incapable of dealing with the problems that arise. I hope that the hon. Gentleman respond in that light.
    Mr. Macfarlane: I understand the anxiety of the hon. Member for Workington (Mr. Campbell-Savours). Most hon. Members have no doubt had experience in recent years of constituents complaining about noise from machinery and moving equipment. However, both new clauses conflict with powers under the existing legislation. I hope that the hon. Gentleman will follow me through my points. We have no desire to reject the hon. Gentleman's new clauses, but we believe that they conflict with existing legislation.
    The hon. Gentleman has obviously done some research in the matter, because he acknowledged the importance of the Control of Pollution Act 1974. It contains powers under sections 58 to 61 which enable local authorities and the magistrates courts to control nuisance arising from noise from fixed sources including construction, development and demolition sites.
    Section 68 of that Act empowers the Secretary of State to make regulations controlling noise from specific pieces of machinery. No new regulations are proposed at present, but the situation is kept under review. The Government are committed to containing and reducing problems arising from noise whenever and wherever possible, but we believe that that can be achieved under existing
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    legislation. Under the proposed clause an offence would be committed even where no problem arising front noise is likely to occur, which is contrary to the philosophy behind the noise provisions in the Control of Pollution Act 1974.
    In addition, I should point out that sections 2 and 3 of the Health and Safety at Work etc. Act, protect the health—in this context the hearing—of employees and members of the public affected by noise arising from the use during work of such equipment.
    Similar provisions to the new clause were introduced into Parliament in the West Midland County Council, the Isle of Wight, and the County of Lancashire Bills. The Secretary of State reported to Parliament on the first of those Bills.
    The growth of noise from moving and fixed machinery is an important matter which causes concern in many areas, but I am convinced that existing legislation covers the points that the hon. Gentleman has raised. I hope that he will not press the new clauses. We cannot accept them, and if the hon. Gentleman has had bad experiences in his constituency or the surrounding area I hope that he will consider whether the existing law could be applied locally.
    Mr. Campbell-Savours: I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn.

    New Clause 11
    COLLECTION OF COMMERCIAL WASTE
    'Section 12 of the Control of Pollution Act 1974 (Collection and Disposal of Controlled Waste) shall have effect subject to the following amendments:—

    (a) section 12(1)(b) (which imposes a duty to arrange for the collection of commercial waste) shall cease to have effect;

    (b) at the end of section 12(1) there should be added the following subsection—

    "(1)(A) Each collection authority may, if requested by the occupier of premises in its area to collect commercial waste from the premises, arrange for the collection of the waste". '—[Mr. Mates.]

    Brought up, and read the First time.
    Mr. Michael Mates: I beg to move, That the clause be read a Second time.
    Sections 12 to 14 of the Control of Pollution Act 1974 have remained unimplemented since the Bill became law. The main reason is that the present power under section 73 of the Public Health Act 1936 to collect trade refuse is converted by section 12(1)(b) into a duty to collect commercial waste. Some rural councils do not provide such a service and the introduction of that section could mean additional expenditure on vehicles, administration of rounds and additional staff—a cost put in 1977 at just over £1 million a year.
    The new clause would turn the prospective duty to collect commercial waste into a power. That would avoid additional public expenditure, which cannot be afforded, and pave the way for the Government to lay an order, bringing the section into force. I commend the new clause to the House.
    Mr. Macfarlane: It may help if I preface my comments by recalling the purpose of the Bill. It is to enact, in general legislation, powers for which there is evidence of national need by their inclusion in local authority rationalisation Bills introduced into Parliament.

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    The new clause has not appeared in any rationalisation Bill so far introduced. Although that alone does not demonstrate that there is no demand by local authorities for the proposed change from a duty to a discretion to collect commercial waste on request, it shows that the Bill is not an appropriate vehicle for such a clause.
    Except in the case of inner London boroughs, which already have a duty to collect trade refuse on request, local authorities currently have only discretion to do so. The decision to change from a discretion to a duty under section 12 of the Control of Pollution Act 1974 was based on a recommendation contained in the Browne report on refuse, storage and collection in 1967, which suggested that an obligation would reduce the burning and illicit disposal of trade refuse, with obvious benefits to the environment. Implementation of sections 12 to 14 has been deferred due to the continuing restraint on public expenditure, but that decision is under active review.
    The Association of District Councils has been asked for information on costs so that public expenditure implications can be taken fully into account in the decision. In the context of this review, the question of a relaxation of the obligation to collect commercial waste is a very relevant issue and I can assure my hon. Friend that it will be taken fully into account when the estimate of costs are available. I hope that that will be sooner rather than later and I hope that my hon. Friend will see fit to withdraw this clause.
    Mr. Mates: I am grateful for my hon. Friend's reply and I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn.

    New Clause 12
    FIRE ALARMS LINKED TO AUTO-DIALLERS

    `(1) This section applies to a fire alarm system connected to the telecommunication system of the Post Office through a device commonly known as an auto-dialler which, in the event of an alarm, connects without manual intervention to the emergency network of that system of the Post Office.

    (2) No person shall install a fire alarm system to which this section applies otherwise than in accordance with a licence issued by a fire authority under the following provisions of this section.

    (3) A person requiring the grant of a licence under this section shall make application to a fire authority in such form as the fire authority may prescribe (a copy of which form shall be supplied by the fire authority to any person on demand) and shall be accompanied by:—

    (a)such particulars of the intended system as the fire authority may require; and

    (b)the payment of such reasonable fee as the fire authority may determine.

    (4) A fire authority may, on the application of any person grant to him a licence under this section on such terms and conditions as may be specified including, without prejudice to the generality of the foregoing—

    (a) such modifications of the intended system particulars of which have been submitted to them as they may require;

    (b) the right of the fire authority to impose a financial penalty (not exceeding £200 on any occasion) if the fire alarm system causes false alarms to be transmitted;

    (c) the right of the fire authority to cause the licensee to disconnect the fire alarm system, if they are of the opinion that the number of false alarms given by it are excessive.

    (5) If any person contravenes subsection (2) above he shall be guilty of an offence and liable on summary conviction to a fine not exceeding £200.'.—[Mr. Raison.]

    Brought up, and read the First time.
    Dr. Summerskill: I beg to move, That the clause be read a Second time.
    The Association of County Councils has drawn this new clause to my attention and I understand that representations have been made to the Minister by the council. It concerns the new form of fire alarm system which has been developed since the advent of the silicon chip. For a relatively small sum, somebody can buy an autodialler which, on being activated by a sensor on the premises, automatically dials 999 and transmits a recorded message through the Post Office telephone links to the fire brigade.
    This clause will enable the fire authority to be aware of the intention to introduce an automatic system and, therefore, provide an opportunity for that authority to examine the proposal and the message to be transmitted.
    There is no agreement with the fire brigade at the moment and no power to enforce penalties for false alarms. It seems a reasonable new clause to be put into the Bill and I should like to hear whether the Minister has any objections to it.
    Mr. Raison: The Government recognise that-false alarm calls from automatic fire detection systems pose serious problems both for fire brigades and fire authorities. Therefore, we have sympathy with a significant part of the purpose of this new clause.
    When the Bill was in course of preparation, we gave very serious thought, in consultation with the local authority associations, to the possibility of including a provision designed to control the installation of autodialler systems linked to fire alarms. Unfortunately, however, our own ideas on the sort of provision required for this purpose differed in important respects from those of the Association of County Councils who, I believe, were responsible for the drafting of this new clause, while the Association of Metropolitan Authorities was not persuaded that the problem of false alarm calls from autodiallers could suitably be dealt with by legislation at all. In the absence of agreement, the Government therefore felt unable to include provision for this purpose in the present Bill.
    The difficulty lies in subsection (4)(b). This is designed to give the fire authority power to include in a licence a condition reserving to the fire authority the right to impose a financial penalty, not exceeding £200, if the fire alarm system causes false alarms to be transmitted. In our view, this provision would breach an important principle enshrined in fire service legislation. The principle is set out in section 3(4) of the Fire Services Act 1947, which provides that a fire authority shall not make any charge for fire-fighting services rendered by the authority.
    The Act does permit a fire authority to make charges for services rendered where it employs the fire brigade, or any equipment, for purposes other than fire-fighting purposes—for example, pumping out a flooded basement—but fire authorities are under no statutory duty to provide services such as these, whereas they have a direct statutory duty to respond to a fire call, and this duty exists regardless of whether, in the outcome, the call may turn out to have been a false alarm.
    In the Government's view, the principle that the fire service should not make a charge, other than through the rates, for carrying out its central duty of fire-fighting is of fundamental importance and should not be breached on this occasion. The last thing any of us wants, I am sure, is occupiers of buildings discouraged from installing

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    equipment designed to protect their property from fire by fears that, if the equipment failed to operate properly, they would be subject to swingeing financial penalties; but that seems to the Government to be precisely the likely effect of the new clause.
    There are other objections. Automatic fire detection and alarm systems linked to autodiallers represent only a small proportion of the automatic systems in use. There are technical objections relating to the drafting of the clause, but we do not believe that the problem of false alarms is readily amenable to a legislative solution. However, we attach great importance to the matter and we are concerned that a solution should be found. To this end, we are embarking on a number of valuable initiatives which I hope will make a contribution. We are concerned about the problem, but this is not the right way to tackle it.
    12 midnight
    Mr. R. C. Mitchell: Although I accept the Minister's argument on subsection 4(b) of the new clause, the Association of County Councils and others are worried, because many of the false alarms that are a nuisance to the fire brigade may be caused by inadequate equipment that has been installed by amateurs. Have the Government thought of a way of supervising the installation of equipment? if someone has such an instrument installed, he should inform the fire brigade or someone with the power to inspect it and to have it put right if it is defective.
    Mr. Raison: Among the steps that we are taking to try to deal with the problem is a seminar in May, which involves the fire service, equipment manufacturers and other interests. It will take place at the fire service college and will consider that type of point. We are also participating in discussions with manufacturers of fire protection equipment and others about the possibility of establishing a national approvals system for fire protection equipment. We are anxious to find a way to tackle the problem of faulty and inadequate equipment. We take the matter seriously.
    Mr. Mitchell: The Minister's remarks have covered the point about inadequate equipment. However, I am worried about faulty installations. The work may be done by cowboys. Can the Government think of any way of having the installation checked by the fire brigade, or someone else?
    Mr. Raison: The British Standards Institution has recently issued a series of standards relating to automatic fire detection and alarm equipment. Those standards provide, for the first time, authoritative guidance on all aspects of automatic fire detection equipment, installation and maintenance. The British Standards Institution has played a substantial part, over the years, in all sorts of matters. I hope that the hon. Gentleman will be reassured to know that we are proceeding in that direction.
    Dr. Summerskill: I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn.

    New Clause 13
    ACCESS TO BUILDINGS BY FIRE BRIGADE

    '(1) Except as provided in subsection (2) below, where plans for the erection or extension of a building are deposited with a district council in accordance with building regulations, the district council shall reject the plans unless after consultation With the fire authority they are satisfied that the plans show—

    (a) that there will be adequate means of access for the fire brigade to the building or, as the case may be, to the buildings as extended; and

    (b) that the building or, as the case may be, the extension of the building will not render inadequate any existing means of access for the fire brigade to a neighbouring building.

    (2) No requirement concerning means of access to a building or to a neighbouring building shall be made under this section in the case of a building to be erected or extended in pursuance of a planning permission granted upon an application made under the Act of 1971 unless notice of the provisions of this section is endorsed on or accompanies the planning permission.

    (3) Section 64(2) and section 65(2) to (5) of the Act of 1936 (notice of rejection or passing of plans and enforcement of requirements) shall apply as if this section were a section of the Act of 1936.

    (4) Any person aggrieved by the action of the district council in rejecting plans under this section may appeal to a magistrates' court.

    (5) In this section references to the adequacy or inadequacy of means of access for the fire brigade shall be construed as references to a means of access adequate or, as the case may inadequate for use for fire fighting purposes by members of one or more fire brigades and their appliances.'.—[Dr.Summerskill.]

    Brought up, and read the First time.
    Dr. Summerskill: I beg to move, That the clause be read a Second time.
    This clause is also of concern to fire authorities, arid a similar clause was recently included in the Iancashire and Hampshire consolidation Bills and is in force in 17 counties' private legislation.
    The clause was discussed between the local authority associations and the Home Office in 1979 and the associations were persuaded that it was not necessary to pursue the clause, as it would be dealt with by way of regulation. However, it has not apparently been dealt with in that way. For the benefit of the fire authorities, will the Minister say when the amending regulations will be implemented? Instead of introducing private legislation, the authorities are waiting for those regulations.
    Mr. Macfarlane: The hon. Member for Halifax (Dr. Summerskill) has raised an important paint and I note the comments that have been made. I shall point the background as quickly as possible.
    The Health and Safety at Work etc. Act 1974 provides for my right hon. Friend the Secretary of State to make building regulations governing means of access to, and egress from, new buildings and extensions of buildings. It is considered that such regulations should form part of a comprehensive package of requirements for means of escape in case of fire. They would be more widely drawn than the existing limited means of escape requirements in part E of the building regulations which apply selectively to certain types of buildings. Widespread consultations have been carried out on proposals to introduce such an extended package, and these have generated a large volume of comment.
    I hope that I can allay the hon. Member's anxiety. My right hon. Friend is reviewing the building control system. Cmnd. 8179, published in February 1981, set cut the Government's proposals for change. Whilst it has not

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    proved possible to introduce legislation in this Session, my right hon. Friend has confirmed that he is still firmly committed to the principles in the Command Paper, and the general review is being pressed forward.
    Means of escape requirements, including access for the fire brigade, are seen as important elements in the review. It would be unsatisfactory to deal with them piecemeal. We are therefore taking the opportunity to pursue the proposals afresh within the overall context of the review, examining methods of extending the scope of the existing means of escape requirements, but without imposing unjustifiable and unnecessary bureaucratic controls.
    The Association of County Councils and the Chief and Assistant Chief Fire Officers Association were advised in April 1980 that the review of building control provided this opportunity. They are aware that a working group, set up by my Department with the assistance of other Departments, the associations and specialist fire interests to examine the former proposals, is in abeyance.
    Perhaps the hon. Members who tabled the new clause will withdraw it for the sake of speeding the passage of the Bill, on the understanding that the matter will be effectively dealt with as part of a comprehensive set of building regulation requirements on means of escape, which is currently being studied in the context of the overall review of the building control system and in the light of the extensive earlier work in this field.
    I hope that the hon. Lady will see fit to withdraw the new clause.
    Dr. Summerskill: I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn.

    New Clause 14
    AMENDMENT OF SECTION 3 OF THE PUBLIC ORDER ACT 1936
    Section 3 of the Public Order Act 1936 shall be amended as follows:—

    (a) In subsection (1) of that section:—

    (i) in the first line thereof, for the words "chief officer of police" there shall be substituted the words "a local authority, after consultation with the chief officer of police for the district concerned and ",

    (ii) in line seven thereof after the words "serious public disorder" there shall be added the words "or is likely to occasion incitement to racial hatred";

    (iii) in line seven, thereof for the words "he may" there shall be sustituted the words "the authority may recommend to the Secretary of State that he should",

    (iv) for the proviso to the subsection shall be substituted the following:—

    "Such conditions as aforesaid may include conditions restricting the display of any flags (including the Union Flag) or banners or emblems in circumstances which are likely to provoke or incite racial hatred".

    (b) In subsection (2) of that section:—

    (i) in the first line thereof, for the words "the chief officer of police" there shall be substituted the words "a local authority".

    (ii) in line three thereof, for the words "in any borough or urban district" there shall be substituted the words "in the district of that authority";

    (iii) for the word "him" in lines 4 and 5 thereof, there shall be substituted the words "that authority" in each case;

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    (iv) in lines 7 and 8 thereof, for the words "he shall apply to the council of the borough or district for an order", there shall be substituted the words "the local authority may after consultation with the chief officer of police for that district, and with the consent of the Secretary of State make an order"

    (v) in line 10, for the word "application" there shall be substituted the word "order".

    (vi) from the words "as the case may be" to the end of the subsection shall be deleted.

    (c) subsection (3) is repealed.

    (d) The following subsections shall be added after subsection (3)—

    "(3A) The local authority may require that 24 hours notice be given to it and to the chief officer of police in the district concerned of any intended public procession.

    Provided that the authority may, for good reason shown, accept shorter notice or dispense with the giving of such notice". '.—;[Mr. Lawrence.]

    Brought up, and read the First time.
    Mr. Ivan Lawrence: I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker: With this it will be convenient to take the following: new clause 15—Distribution of literature in schools inciting racial hatred.
    Amendment No. 114, in title, line 15, after 'authorities;',
    'to amend section 3 of the Public Order Act 1936 and section 235 of the Local Government Act 1972;'.
    Mr. Lawrence: I make no pretence that this is either the most convenient or best drafted of new clauses, and seek only that the Government should accept that the two evils referred to should be dealt with by Parliament and that, since public order is being undermined constantly and the Government are perceived as the party of law and order with little time left before the next election to deal effectively with such problems, this Bill is a ready instrument for action. Even if the Bill is not considered to be the most appropriate vehicle and the local authority is not considered to be the most appropriate agent for such action, at the very least our deliberations may bring the Government to make a commitment that action will shortly be taken in another Bill.
    The two evils of which new clause 14 speaks are separate but not necessarily wholly unrelated. There is the sickening abuse of the union flag by the National Front on its marches, particularly at the annual Remembrance Day parade at the Cenotaph. The Standard, in a short leading article yesterday, supports the new clause and states:
    "One of the nastiest political perversions around is the attempt by the National Front to turn the Union Jack into their private hallmark, prominently on display at their ugly marches and meetings."
    It goes on to say that the Home Secretary should give the new clause his enthusiastic backing, and adds:
    "It would still allow the Union Jack to be used in all the traditional ways. But no one should be allowed to turn the national flag into an emblem of fear and disgust for the many people who live here."
    We say amen to that.
    There are still, thank goodness, many patriotic people in Britain who believe that the union flag should be honoured and respected as a proud symbol of all that is decent and honourable in our great country. Many people think that it is appalling enough that the flag should so often be trivialised for commercial purposes. Our American friends do not stand for such trivialisation. Few public gatherings in the United States begin without a prayer and a salute to their flag.

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    But far worse is the hideous mockery of those who fought or died fighting for their country against Hitler and Nazi Fascism when the union flag is paraded annually by the National Front at the nation's greatest memorial for the fallen. I was too young to fight in the Second World War for my country, but had I been of age, that would have been what I would have most wanted to do. However, my relative youth does not prevent me from also feeling the insult and distress that that generation feels at the sight of Fascists pretending that they are true Britons.
    Nor does it prevent me from remembering that, in all probability, I would not be here, nor would Britain be free and subject to parliamentary democracy, had those who died for Britain not forfeited their lives in the cause of freedom. Nor does it prevent me from realising that my generation has a responsibility not to forget the loyal dead and to do what we can to honour and not disgrace their memory.
    Since I raised the matter in the House last November, and my right hon. Friend the Minister of State assured me that he shared my repugnance and that the Government were thinking about the matter in the context of the Public Order Act, I have had many letters from those who support this abuse of the union flag. Some of the writers say that they were among those who fought in the war to keep Britain for the whites and preserve us from alien infiltration. However, their Britain is not the Britain that most decent people would want to live in. Under them Britain would be, as all Fascist countries inevitably are, a brutal, intolerant and oppressive place, a place where hatred and inhumanity to one's fellow man would be accepted as normal and good. Instead of being a respected and admired nation, Great Britain would become an international outcast.
    Fortunately, the National Front's performance at elections is derisory, and its numbers small and insignificant. On the other hand, I am sure that in this part of the proposed new clause we speak for many millions of British people. An acceptance of this part of the new clause would be as popular as it is, alas, necessary.
    The second evil is that of offensive marches and processions, and particularly the fact that there is no uniform law throughout the Land that gives the police sufficient warning of such marches. We debated this issue recently on the West Midlands County Council Act 1980 and other similar measures, and at this late hour there is no need to rehearse the arguments again. It is clear that some marches and processions are violent, offensive and an affront to good public order. It is clear that at present there is a tendency for such marches to proliferate. It is also clear that where no existing law requires that the police be given adequate warning, they are sometimes extremely embarrassed and restricted in their work.
    Not long ago, a Fascist march in Coventry was banned and the marchers moved on to Burton-on-Trent, where they were not banned. The police had little or no warning. They reacted with great speed, efficiency and good sense. Had the marchers been more aggressive, there might easily have been trouble in Burton. Alas, such a harmless result is not guaranteed in all cases, as long as the police forces of too much of Britain remain burdened by an outdated and senseless restriction.
    Urgent action is necessary. This Bill again provides a ready vehicle, since local authorities are not an unreasonable agency to take the decisions which
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    democratically reflect the public's desire for peace and quiet and good order, when appropriately advised by the chief of police.
    In our debate on 25 November on the Scarman report, the Home Secretary said that he was prepared to make progress on the banning of marches. I ask that this most ready and eminent instrument be used for such progress.
    New clause 15 could not be said to have a better home in a Home Office public order Bill. In fact, if it were raised in such a Bill, I imagine that the Government would argue that it was a matter for a local government Bill. So I hope that the Government will consider the new clause seriously now in this Bill. Is the distribution of literature in schools inciting racial hatred a sufficient evil at present to require action from the Government? I am afraid that the answer is undoubtedly "Yes".
    There is now a growing volume of evidence that the extreme Right-wing organisations are targeting their operations on schools. In June 1977, in the magazine Spearhead, Mr. Derek Holland called for the formation of a National Front youth wing. He said:
    "The fight for the control of the minds of British youth is taking place continually in the seats of learning. We can, if we are determined to do so, make major inroads into the Technical Colleges, Universities and above all the schools of Britain."
    12.15 am
    Within two months the Young National Front had been formed as a department of the National Front directorate and had taken over the youth-oriented newspaper Bulldog as its own organ. The new Young National Front developed a special operation aimed at "stirring up interest" among school children. The second edition of Bulldog urged without circumspection that
    "all youths should take part in Operation NF—spread the racialist word, distribute Bulldog or any other National Front literature in schools, and help the Front to keep Britain white."
    On 19 January 1978 the National Front officially launched its "Schools Campaign".
    The National Front and the British Movement are not the only organisations disseminating racist literature to school children. The November 9th Society has been mentioned in the House recently. There is the equally overtly Nazi group, Viking Youth, which targets its activities upon the Scout movement. There is the group known as the Association of British Ex-Servicemen, or the Board of Anglo-Saxon-Celtic Deputies, led by Kenneth McKilliam. A member of John Tyndall's breakaway New National Front, he distributes literature addressed to the youth of Britain saying:
    Your country…is being taken away from you and handed over to the Khazar Jews, Asiatics and Negroes."
    That betrayal, according to the leaflet, is being accomplished by a number of means. For example, it says that there is a plan for
    "the sperm of other races to be implanted in white women."
    The National Socialist Party of the United Kingdom is conducting on Merseyside a "white revolution" in "Jew-run" schools. Its leaflets proclaim that that organisation
    "is looking for young, white people who are sick of being pushed around by niggers and Jews and who are ready to fight for white power with the Nazi Party …We are now operating inside Merseyside Jew-run schools and all white people are welcome to join our white revolution. So if you are young and white and support our spiritual leader, Adolf Hitler, then support or join the Nazi Party."
    I could go on with a long list of equally revolting examples of literature that is being printed and distributed outside and inside British schools. It cannot be denied that

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    a rising body of racist literature is increasingly being circulated in our schools with the idea of subverting our children. How long is this to be allowed to go on? The short answer is that it should stop immediately, and it will stop only if there is legislation. The amendment would be such legislation. I readily concede that the other two measures to which I referred might properly be considered in a Home Office Bill, but it appears that this provision does not fall under that heading. I shall be most grateful if my right hon. Friend will say that he is prepared to accept such an amendment, so that we can put a stop to something which is both vile and spreading.
    Mr. Greville Janner: I congratulate the hon. and learned Member for Burton (Mr. Lawrence) on his eloquent and helpful speech. There are, happily, some issues that have nothing to do with party and that unite all hon. Members. I should like to think that one such issue is our total, united repugnance of Nazism, Fascism and racism in all forms. Hon. Members are anxious to see an end to any form of extremism that destroys the peace in our streets and the decency of our communities. The question that arises is how this can best be achieved. We are discussing means for putting an end to the sort of behaviour that the hon. and learned Member for Burton has described. I wish to make a number of points to supplement his remarks.
    The proposal in new clause 14 would leave chief officers of police with their power to consider what it is best to do, but the burden of recommending the banning of a march would be placed on the local authority, a political body, following consultation with the chief officer of police. I came upon this clear belief following a march on St. George's Day in Leicester during a general election campaign. The candidates of all the decent democratic parties had agreed that the march should not be allowed. It was a Fascist march through the streets of our decent city, aimed deliberately at causing trouble with and for Asians, black and whites in a city where there was no such trouble. It was a march through streets chosen so as to cause the greatest unpleasantness and misery, a march that could only have the effect of placing the police in the middle of a battle.
    The chief of police, as he was fully entitled to do, decided to allow the march to continue—and the inevitable happened. There was a battle, with the police in the middle. Vast numbers of policemen took part in a brave enterprise to preserve the lives and safety of our citizens but only at great cost to themselves and to the ratepayers. There occurred a break-up of peace that should not have been permitted.
    These are difficult decisions. Chiefs of police have to decide whether a march will occasion serious public disorder. A police chief who asks for a march to be banned, admits, implicitly and impliedly, that if it takes place he will be unable to prevent serious public disorder in his area. It is no criticism of the police or of the manner in which they carry out their duties to say that the decision should not be left in their hands. It is right that those who can be attacked publicly by those who have elected them—whether the local authority or Government Ministers—should take the responsibility from the chiefs of police. That is the purpose of the new clause.
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    I accept that the issue is under discussion and that it requires careful thought while possible amendments to the Public Order Act are considered. It is nevertheless right that the new clause should be moved and especially that the proposal that the words "serious public disorder" should be followed by the words
    "or is likely to occasion incitement to racial hatred",
    because that is the undisguised purpose of these evil marches and processions. They are deliberately designed for such purpose. It is not enough simply to include the words "serious public disorder".
    The hon. and learned Member for Burton dealt fully with the display of the Union Jack. As a former National Service man who saw again only a few weeks ago in Auschwitz the results of Fascist and Nazi activity, I cannot think of a more revolting use of the great flag of this free nation than its display by those who are busy stirring up racial hatred.
    Nor can I conceive of a more offensive occasion for such use than at the Cenotaph on the day when we are remembering those who fell so that we might continue to enjoy the freedom of speech that preserves all in this House and in the country. I believe that the Government will need good reason for not accepting the new clause.
    As to lines 31 to 35, a word should be said about the notice required to be given for marches. At the moment it varies throughout the country. There should be one period, and 24 hours seems reasonable,
    "Provided that the authority may, for good reason shown, accept shorter notice or dispense with the giving of such notice", because there are occasions when this is reasonable.
    A Government in another Land may have taken steps that deprive its people of liberty, or a Government of this Land may have taken steps that attack human rights. In such a situation, people are entitled to protest immediately. To give another example, if a child is killed on a crossing, local people may wish to demonstrate there and then. There should be a sensible, reasonable provision giving the authority a discretionary right to accept shorter notice. That is why the provision is framed in this way. I hope that the House will regard it, too, as thoroughly reasonable and that the Government will accept it.
    New clause 15 is separate. It is right to emphasise that, because I see no reason why this or any other Government should refuse to accept it. It has nothing to do with the Public Order Act. It is entirely separate. It enables local authorities to take steps to keep out of schools the kind of literature to which the hon. and learned Member for Burton referred. The existing powers are clearly insufficient. The House will know of the trial of the editor of the Bulldog journal on three occasions. On the first, the jury disagreed; on the second, difficulty arose from a technicality; and on the third, he was convicted on a majority vote.
    That man had been editing the kind of unpleasant, evil racist rubbish to which the hon. and learned Gentleman referred, but under the law as it stands it is very difficult to obtain a conviction, because the prosecution must prove that the measure of guilt is within the precise terms of the legislation. Without going into details, the new clause would at least give local authorities the right to prohibit the distribution of such literature in their schools. That is a very simple, fair and reasonable right.
    It is evil to distribute racist literature to anyone in any place or at any time, but it is hard to imagine a more disgraceful and vile evil than the distribution of racist

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    literature infusing hate into schools and to children at an age at which they may be impressed by it. The new clause merely enables local authorities, if they so wish, to introduce bye-laws making it a criminal offence to distribute within a school any literature that may tend to incite to racial hatred. It is an enabling provision. Local authorities do not have to do this. It gives them a power which they would necessarily have to exercise in accordance with the provision.
    I therefore ask the Government to accept at least this new clause. To me, it would be unacceptable for them to refuse. There is no reason for postponement or dilly-dallying. There is no reason to say that the matter requires further consideration. It is a simple, short clause which does a job that should have been done long ago. I believe that it has the support of hon. Members in all parts of the House, and I ask the Government to accept it.
    Mr. Ivor Stanbrook: In our detestation of violent doctrines, there is a danger that we may end up creating new tyrannies. I am afraid that that is just what my hon. and learned Friend the Member for Burton (Mr. Lawrence) and the hon. and learned Member for Leicester, West (Mr. Janner) propose to do.
    First, one must consider the existing state of the law and the Public Order Act, which breaches a fundamental principle in our criminal law. It is an exception which provides that, no matter what a person intended, if the effect is something that Parliament has said is wrong that person has committed a crime and is a criminal. That proposition came about through an amendment of the Public Order Act during the last Administration, which was opposed by the Conservative Opposition at the time. I very much hope that an opportunity will be given at some time during this Administration for matters to be put right and for the concept of mens rea to be re-inserted into that provision of our criminal law.
    12.30 am
    It is quite wrong that a person should be deemed a criminal even if he did not intend to commit the offence. That is my first objection to what my hon. and learned Friend and the hon. and learned Gentleman have just said. It applies to both new clauses, because in both cases it is suggested that, no matter what the person's motives for distributing certain Ianguage, if it is something of which we disapprove, they are criminals. I am, therefore, opposed to the new clauses.
    There is a danger when arguing from a particular proposition. in this case, the hon. and learned Gentleman and my hon. and learned Friend have fastened upon their detestation of the National Front and its doctrines and policies. What they are proposing is not directed against the National Front alone or its doctrines and policies. It is directed, and will be so applied, against free speech. That is an entirely different matter that should cause us all to pause and not fundamentally change the criminal law of England at this time, in this place, without adequate deliberation and consideration of the effects.
    I take processions as an example. Both the hon. and learned Gentleman and my hon. and learned Friend referred to processions by people of whose politics they disapprove. What about people of whose politics they approve? Is it not possible that the law could be applied against them? When we are considering transferring responsibility for the banning of a public procession from
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    an independent, professional view to that of a politically-motivated organisation such as a local authority, we must accept that there would be great dangers in such a transfer.
    Mr. Lawrence: My hon. Friend normally applies his mind with great care to the issues in hand. Will he direct himself to the particular matters that I and the hon. and learned Gentleman have raised? Is he in favour of the local authority, with the advice of the police, being required to be notified 24 hours before an intended public procession? I seem to remember that my hon. Friend went with me into the Lobby on at least one of the other measures I have mentioned for precisely that end.
    Will he also direct his mind specifically to whether he supports the use of the union flag by the National Front at the Cenotaph? And will he say whether children should be protected from some of the wilder excesses of any political indoctrination?
    Mr. Stanbrook: My hon. and learned Friend has had his go. He made a long speech and read it from beginning to end. He now intervenes in the middle of my speech, just as I am about to tell him the reasons why I do not approve of what he has just said. If he is patient, he might learn something.
    I object to the idea of transferring the fundamental power of decision from professional bodies, such as the police, to politically motivated, albeit democratically elected, public authorities. We have had plenty of experience in recent years of local authorities imposing bans and of the police opposing bans, not asking for them and not applying them. In those instances it could not be said that the decisions of individual authorities were better than those of the police, the police being fundamentally and primarily responsible for law and order and the application and enforcement of our law. Elected local councillors do not have that responsibility. That is the fundamental objection to the proposal that is before us.
    There is some control over political demonstrations and procession, and there is room for improvement in the administrative arrangements for control, such as notice, but that is not the nub of the argument, which is the restriction upon individual liberty which is implied by the clauses.
    It may be that the National Front or the Fascists, if they are properly so called, are misguided, at least in their views on the policies that should be carried out by a Government, but they are not misguided in their use of the national flag or in their pride in that union flag. It would be a sad day for us all if we made it an offence for anyone wishing to demonstrate his pride in the Union Jack and prevented him from doing so because of political connotations. Let us condemn those who commit crimes, if the law is such, for things that they say to incite racial hatred, but carrying a flag, especially the Union Jack, should not ever constitute a crime in this country.
    Mr. Campbell-Savours: rose—
    Mr. Stanbrook: I had the privilege of fighting for my country in the Royal Air Force during the war. I am sure that those of us who did, volunteers and others, were conscious that Britain had enemies on all sides. We were not necessarily fighting against them all at the same time. We were prepared to accept an alliance with Soviet Russia during the war to achieve our primary purpose, which was the overthrow of Nazi Germany. The source of our

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    patriotism on those occasions was not party political and it was not purely anti-Fascism. We recognised the vile doctrine of Communism as well as that of Fascism. I hope that we shall preserve a balance when considering proposed restrictions on individual liberty.
    The hon. and learned Gentlemen—no doubt for good reasons and understandably—want to pursue their battle and campaign against the National Front. However, the Bill is not a proper vehicle for such a restriction.
    Mr. Pitt: I join the hon. and learned Members for Burton (Mr. Lawrence) and Leicester, West (Mr. Janner) and congratulate them on their new clauses. I tell the hon. Member for Orpington (Mr. Stanbrook) that I had the honour and privilege of losing my father when he was fighting in the war against Fascism.
    We are talking about the use of the Union Jack in circumstances that are not patriotic. We are talking about the misuse and abuse of the flag. It is so far misused and abused that very few people nowadays want to use it for other than these activities. Therefore, the flag has been debased.
    New clause 14 will clear up an anomaly about the Public Order Act. Members of the Joint Committee against Racialism, of which I am a member, and of the Board of Deputies of British Jews have been concerned to amend the Public Order Act. The new clause will provide such an amendment. It acknowledges that the crime of incitement to racial hatred can be prevented. Other attempts to do that in the past have failed. Therefore, we should welcome the new clause on that ground alone.
    The new clause also acknowledges that specific marches and demonstrations can be banned. That will take off the blanket ban imposed on marches and demonstations merely because a group of Fascist thugs wish to march through the streets of our towns and cities and break them up.
    I turn now to new clause 15. The basis of education in our schools and colleges should be directed towards a multiracial society, because that is what we are. We are a society of many races and creeds. I hope that will be the attack on our education; not the attack that is going on in a number of areas—specifically in south London, particularly Croydon—and at football matches where Fascist thugs of the National Front and the British Movement and other organisations deliberately try to pervert the brains and minds of young people by distributing their obscene literature. If pornographic material were being distributed, all hon. Members would be down on them like a ton of bricks and there would be laws to prevent its distribution. The literature that such people are distributing may not be pornographic, but it is certainly offensive.
    We should support new clauses 14 and 15.
    Mr. Raison: I share the strong feelings that have been expressed by my hon. and learned Friend the Member for Burton (Mr. Lawrence) and the hon. and learned Member for Leicester, West (Mr. Janner) about the odiousness of some of the things that we have seen in recent times and the importance of tackling them. It is right that we should express our sense of disgust at what goes on, but we must consider the right way to deal with it.
    I am sure that the House knows that the Government have been engaged for some time on a review of the Public
    450
    Order Act 1936 and related legislation. We published a consultation document, on which we received many comments, and we have had the benefit of a report from the Select Committee on Home Affairs. Last year we delayed pushing forward the review until we could receive and study the findings of Lord Scarman in his report on the Brixton disturbances. We now have the benefit of that report and some of the comments made in response to it. Our intention is to complete the review and to make known our conclusions later this Session. We plan to press ahead as quickly as possible.
    The debate has been a useful further opportunity to express views on some of the complex issues involved in the control of public order. I do not think that the hon. Member for Croydon, North-West (Mr. Pitt) realises how complex some of these issues can be. We shall study the debate with care and take account of what hon. Members have said in reaching our conclusions on the review of public order.
    This is a difficult subject. We must balance the right to express and to campaign for a point of view with the wish of almost all of us to preserve peace in our streets and to reject the odiousness of the various forms of racial incitement about which we have been talking.
    There is little that I can say about the substance of new clause 14 without anticipating the results of our review. I must ask the House not to seek to add the clause to the Bill, because it would be undesirable to anticipate the results of that review and to legislate in this important and complicated area in a piecemeal manner. We must take a little more time and get it right.
    12.45 am
    I sense that there is a particular desire on the part of some hon. Members to push new clause 15 forward to legislation. Attention has been paid to the inadequacies of the law on incitement to racial hatred. My right hon. and learned Friend the Attorney-General has expressed to the House his concern about the operation of the provision. The House should also know, however, that the Government are reviewing the offence of incitement to racial hatred as part of their review of public order legislation. That is what new clause 15 is about. The hon. and learned Member for Leicester, West is shaking his head. I do not know why. I know what is happening in our review, and that we are considering the question of incitement to racial hatred.
    We should like to see the law operate effectively in this matter, but it is not easy. Among those who commented on section 5A of the 1936 Act in response to the Government's Green Paper on that Act—Cmnd. 7891—there was little agreement on whether changes should be made and, if so, what changes should be made.
    Before long we shall be able to come to the House to announce our conclusions. To be more specific, it is appropriate for a public order Bill, rather than local government legislation, to tackle these matters, because the offence of incitement to racial hatred, to which new clause 15 is clearly related, is covered by section 5A of the 1936 Act. It would therefore be premature to support new clause 15 this evening.
    Mr. Greville Janner: Has the Minister considered that new clause 15 is designed to add a subsection to section 235 of the Local Government Act 1972? This clause is not designed to alter the Pubic Order Act. That is why I regard it as reasonable to say, speaking for myself only, that I

    451
    would not press the amendment, but new clause 15 must go forward. Surely there can be no better or more appropriate lime to amend the 1972 Act than in a debate on a Bill designed to amend local government legislation that is different.
    Mr. Campbell-Savours: I have listened to the Minister with care. Will he say whether, following that review, it is intended to end the provision relating to the distribution of literature in schools? The Minister will have formulated an opinion on that. This may be the wrong provision on which to deal with that, but we at least want an undertaking that he will take the appropriate decision.
    Mr. Raison: The hon. and learned Member for Leicester, West says that his clause is related to the Local Government Act 1972. Of course, I accept that that is what is stated in the clause. He must consider, however, the crucial phrase to which I imagine he attaches great importance—the last few words of new clause 15:
    "literature … which may tend to incite to racial hatred."
    That brings in the whole question of incitement to racial hatred. As the hon. and learned Gentleman knows, that matter is the concern of section 5A of the Public Order Act as it was revised by the Race Relations Act 1970. It lies plumb in the area which is covered by that Act, and with which we are dealing in our public order review. I shall say a little more about it in a moment. It might also help to meet the point made by the hon. Member for Workington (Mr. Campbell-Savours).
    The question raised by the proposers of new clause 15 is whether it is appropriate to go further than we have and strengthen the criminal law in this one particular area. I say "strengthen" because section 5A of the Public Order Act 1936—which, as I have just said, was inserted by section 70 of the Race Relations Act 1970—already makes it a criminal offence to publish or distribute written matter which is threatening, abusive or insulting in a case where hatred is likely to be stirred up against any racial group in Great Britain by the matter or words in question.
    Therefore, it is evident that, provided the statutory tests are met, the criminal law already extends to the distribution in a school of literature which is likely to stir up racial hatred. The proposed new clause would permit the application of separate alternative tests to the circulation of such literature in schools.
    Quite apart from the general undesirability of creating a new limited offence in a field which is already covered by the general criminal law, as I understand it, the proposed new clause would permit the application of far less stringent tests than those which are already contained in section 5A. The tests in section 5A would in any case be very difficult to define. In particular, how could one define literature which "may tend to incite" racial hatred? Those are, frankly, rather loose words. A tendency to incite is in itself vague enough; a possible tendency to incite is still vaguer. It would be difficult to say what sort of activity could not be encompassed by a loose formulation of that kind.
    We already have provisions which cover this area. To provide alternative provisions in the way suggested would not help, and those provisions in themselves do not seem to be very adequate.
    Mr. Lawrence: Can my right hon. Friend say how many prosecutions in each of the past few years have been launched under the existing law? When he has dealt with
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    that, can he give us some assurance—after all, it is the purpose of the new clause—that the law will be improved and tightened up so that the growing number of offensive acts which are being perpetrated will be covered by some penal law?
    Mr. Raison: I do not know off the cuff the number of prosecutions, but I accept that the number has been small. I shall not quarrel with my hon. and learned Friend about that, but I do not think that we shall enlarge the number of successful prosecutions if we adopt a provision which is rather vague. The difficulty, as all hon. Members know, is to make prosecutions stick. In our review in the Home Office we are trying to find a more effective law.
    Although, of course, one understands and supports the sentiments behind new clause 15, it does not seem to us to be likely to be an effective piece of legislation. do not believe that it is likely to do very much to help solve the problem about which the House is concerned.
    I have demonstrated clearly that the scope of our review of public order embraces racial hatred. Of course we want to come up with effective provisions. There are well-known doubts about the efficacy of the present provisions. We want to come up with something better, but I do not think that what hon. Members are putting forward this evening qualifies as an effective provision. It is the old story. We must have regard not only to the sentiments which activate us, but to whether a provision is likely to work in practice.
    Mr. Greville Janner: Does the Minister accept that at the moment there is no legislation that bans the distribution within a school of the literature at which the amendment is aimed? Does he accept also that such legislation as does exist not only leads to few prosecutions, but to fewer convictions, because it is too specific? The amendment is framed to ensure not the people are prosecuted or convicted, but the they do not distribute such literature in our schools.
    Mr. Raison: I have already told the House that measures under the existing criminal law extend to the distribution of literature that is likely to stir up racial hatred in a school. Whether that is specific legislation, in the hon. and learned Gentleman's definition, I do not know. It does not deal specifically with schools, but it sets out to deal with literarure that is likely to stir up racial hatred. We are cosidering whether the legislation is effective, and I repeat my firm assurance to the House. We must get the law right and not use it simply as a vehicle to express sentiments which, I fully accept, are strongly and justifiably held.
    We are trying to deal with this difficult matter. It is not right to take a piecemeal approach to the improvement of the law. There are deficiencies in new clause 15 and I cannot advise the House to accept either of the new clauses.
    Mr. R. C. Mitchell: I agree entirely with the Minister's argument and reasoning about new clause 14. It should be part of the review of the Public Order Act 1936.
    I found the right hon. Gentleman's comments on new clause 15 to be especially unconvincing. A problem has developed in recent years with the increasing distribution of such literature in our schools. We can see it in al parts of Britain. It is a definite campaign organised by definite groups to subvert—in their words—our children in

    453
    schools. If the Minister is saying that there is a drafting defect in the new clause, why do we not accept it and the Minister can amend it in another place later? I hope that the House will divide on new clause 15.
    Mr. Lawrence: I accept entirely my right hon. Friend's arguments about the public order legislation. As a lawyer, I am reluctant to put on to the statute book anything that is manifestly less than perfect. However, I have noticed during the years that I have been a Member of Parliament that if one wishes to change anything one must sometimes get something imperfect past this House so that the other place or the Government will make it perfect. If, in the end, no one can make it perfect, at least there will be a respectable debate later explaining why the matter must be withdrawn before the legislation is enacted.
    However, unless we get something to the other place for consideration, I am not wholly optimistic that it will be possible for my right hon. Friend to say later that the Government have the best intentions and that they are manifesting them by putting on to the statute book a specific protection for children. As I am not confident that that will happen, I shall withdraw clause 14 but not clause 15. I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn.

    New Clause 15
    DISTRIBUTION OF LITERATURE IN SCHOOLS INCITING
    RACIAL HATRED
    'After subsection (1) of section 235 of the Local Government Act 1972 the following subsection shall be inserted:—
    "(1A) Without prejudice to the generality of the foregoing subsection, a council of a local authority shall have the power to make byelaws making it a criminal offence to distribute any literature within a school which may tend to incite to racial hatred.".'.—[Mr. Lawrence.]
    1 am
    Brought up, and read the First time.
    Question put, That the clause be read a Second time:—
    The House divided: Ayes 13, Noes 60.

    Division No. 56]

    [1.00 am

    AYES

    Beith,A.J.

    Pitt, WilliamHenry

    Campbell-Savours, Dale

    Prescott, John

    Clark, DrDavid (S Shields)

    Summerskill, HonDrShirley

    Concannon, RtHon J. D.

    Whitlock, William

    Cryer, Bob

    Evans, John (Newton)

    Tellers for the Ayes:

    George, Bruce

    Mr. Ivan Lawrence and

    Mitchell, R.C. (Sotonltchen)

    Mr. Greville Janner.

    Penhaligon, David

    NOES

    Alexander, Richard

    Dunn, Robert(Dartford)

    Berry, HonAnthony

    Eggar, Tim

    Blackburn, John

    Eyre, Reginald

    Boscawen, HonRobert

    Garel-Jones, Tristan

    Buck, Antony

    Goodlad, Alastair

    Budgen, Nick

    Griffiths, Peter Portsm'thN)

    Butler, Hon Adam

    Gummer, JohnSelwyn

    Carlisle, John (Luton West)

    Hawksley, Warren

    Carlisle, Kenneth (Lincoln)

    Hogg, Hon Douglas (Gr'th 'm)

    Colvin, Michael

    Jopling, RtHon Michael

    Cope, John

    Kilfedder, JamesA.

    Dorrell, Stephen

    Lang, Ian

    Dunlop, John

    Lester, Jim (Beeston)

    454

    Lloyd, Peter (Fareham)

    Rathbone, Tim

    McCusker, H.

    Rhodes James, Robert

    Macfarlane, Neil

    Shepherd, Colin(Hereford)

    Major, John

    Sims, Roger

    Mates, Michael

    Speller, Tony

    Mather, Carol

    Stanbrook, lvor

    Maxwell-Hyslop, Robin

    Stanley, John

    Mayhew, Patrick

    Stradling Thomas, J.

    Meyer, SirAnthony

    Thompson, Donald

    Moate, Roger

    Viggers, Peter

    Murphy, Christopher

    Waller, Gary

    Needham, Richard

    Watson, John

    Neubert, Michael

    Wells, Bowen

    Newton, Tony

    Wheeler, John

    Osborn, John

    Wolfson, Mark

    Page, Richard (SW Herts)

    Patten, Christopher(Bath)

    Tellers for the Noes:

    Proctor, K. Harvey

    Mr. David Hunt and

    Raison, Timothy

    Mr. Peter Brooke.

    Question accordingly negatived.

    New Clause 16
    ROAD SIGNS AT THE SITE OF ROAD WORKS
    Duty to ensure adequate traffic signs placed at the site of roadworks.
    The following section shall be inserted after section 174 of the Highways Act 1980—
    174A (1) A local authority shall ensure that in respect of any roadworks of any road under their jurisdiction, there are, at the site of those works, signs signs in place to warn and guide traffic sufficient to meet the requirements of Chapter 8 of the Department of Transport's Traffic Signs Manual.
    (2) Without prejudice to the generality of subsection (1), the requirement to place road signs shall include a requirement to provide at the site of the roadworks, a sign, clearly visible to road users giving the following information:—

    (a) the name and address of the contractor

    (b) the name and address of the site foreman

    (c) the telephone number of the contractor for daytime contact

    (d) the telephone number of the contractor for night-time contact

    (e) where applicable, the name of the local authority or statutory undertaker for whom the contractor is working.

    (3) Failure to discharge the duty imposed by subsection (1) or to meet the requirement specified in subsection (2) shall be an offence punishable on summary conviction with a fine not exceeding £500.".'.— [Mr. Cryer.]

    Brought up, and read the first time.
    Mr. Cryer: I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this it will be convenient to take amendment No. 112, in title, line 10, leave out 'section 163(1) of’.
    Mr. Cryer: I shall not detain hon. Members for long, but I understand that the Automobile Association is keen on the amendment and new clause, having drawn my attention to this matter. Unfortunately, it also drew it to the attention of the hon. Member for Leek (Mr. Knox). The alteration that I have made is contained not in new clause 16, but in new clause 18. The device seems extremely sensible. In April and May 1981 the AA conducted a survey and visited 433 sites where road works were in process. It did not visit motorways or trunk roads, on the basis that they are adequately signposted. The AA found that 51 per cent. of the signs were adequate and that 49 per cent. were inadequate.
    Reasonably, the AA suggests that something should be done to allow ordinary citizens some form of redress. New

    455
    clause 16 requires a sign to be exhibited, giving the name and address of the contractor, site foreman, day and night time contacts and so on. The clause states that the sign should be visible to road users. A mistake arose because I thought that the sign should be visible to pedestrians. Local authorities are short of money, and I thought that they would have to exhibit large signs if they were to be visible to all road users and to those using both carriageways. I therefore suggested that the sign should be visible to pedestrians.
    If a motorist found that road works were inadequately signposted and that they were dangerous, he could stop the car, get out and find all the information requested in the new clause 16. In the same way as planning applications are exhibited, a duplicated sheet, covered with cellophane or a waterproof material, could be fastened to a nearby lamppost or to one of the roadwork signs.
    Such a provision would not put local authorities to great expense, but would allow pedestrians, lorry drivers and motorists, who see danger in inadequately marked road works, to make immediate contact. That is important. I am sure that all hon. Members will have taken up a case with a district council, only to find that the county council is responsible, and vice versa. Therefore, if public utility or local authority road works are involved, a sign should be fastened nearby, saying who is responsible. If someone thought the situation dangerous, something could be done.
    I hope that the Minister will consider the clause. I accept that it is not as good as I initially intended. However, if he will agree to consider it with a view to introducing a neater form of words, I shall be happy.
    1.15 am
    Mr. Macfarlane: This new clause appears to me to fall outside the intentions of the Bill, because the matter it largely relates to is not apposite to local legislation. National requirements as to traffic signing, to which subsection (2) wholly, and subsection (1) largely, relates, are prescribed by my right hon. Friends the Secretaries of State for Transport, Scotland and Wales, in the Traffic Signs Regulations and general directions that they make under section 54 of the Road Traffic Regulation Act 1967. Any new requirements as to traffic signing would have to be proposed by them in an amendment to the regulations. However, I hope to be able to satisfy the hon. Gentleman that his objectives are already met.
    The hon. Member for Keighley (Mr. Cryer) proposes, first, that chapter 8 of my right hon. Friend's traffic signs manual—which is advisory—be made mandatory. We are all agreed on the importance of having road works adequately signed and protected. The manual gives advice on how that should be done. It does not lay down requirements—it is not possible to specify them with legal precision for all the varying circumstances that may be met on actual sites—but section 174(1) of the Highways Act 1980, and section 8 of the Public Utilities Street Works Act 1950, require any person executing works in a street—any person, not just a local authority—to protect and sign the works adequately. Failure to do so is an offence, punishable by a fine of up to £10 for each day it continues. Observance of or failure to observe the advice given in chapter 8 can be brought in evidence before a court in respect of an alleged offence of that kind.
    Therefore, subsection (1) is unnecessary. So, in the Government's view, is subsection (2). That would require contractors to instal on signs much detailed
    456
    information—which incidentally could prove dangerously distracting to drivers—telling those interested where to get in touch with those responsible for the works. Some of this information would vary during the course of the contract. The purpose is apparently to enable the responsible persons to be contacted speedily in an emergency, or the roadworks are seen to be inadequately protected—at other times the person directly responsible could be traced through the contracting firm, the name of which is usually displayed on the site. But any such emergency can and should be referred to the local police. They have power to remedy any defects in signing or protection. They also have power to prosecute for failure to provide adequate protection—and indeed, new clause 2 will enable them to do so without, as at present, having first to seek the written consent of the Attorney-General.
    I believe that what we have so far in our legislation adequately covers the hon. Gentleman's new clause. He expressed his anxiety about the way he had phrased it. Perhaps he had not had the chance to carry out detailed research. However, I am convinced that the points are adequately covered.
    Mr. Wheeler: There is one point that my hon. Friend should consider. I cite the example of the city of Westminster in the centre of London, where ever 12 months there are about 20,000 road openings, of which about 90 per cent. are opened under the emergency procedure, which means that no notice is given. There is perhaps a case here, given the difficulties that the police have in central London, for acquiring the information set out in subsection (2), to be given in a written notice in a polythene bag. My hon. Friend might like to reflect on that before the Bill is finally disposed of.
    Mr. Macfarlane: I shall not give my hon. Friencl an assurance that that will be looked at because, as I said to the hon. Member for Keighley, what is applicable elsewhere is equally applicable in the centre of London. I am convinced that the present legislation adequately covers what the hon. Gentleman seeks to do. Not only is the new clause inappropriate to the Bill, but there are adequate safeguards in our present legislation. I hope that the hon. Gentleman will withdraw his new clause.
    Mr. Cryer: I have done the research. I have chapter 8 of the traffic signs manual, "Traffic Safety Measures for Road Works", with me.
    I am concerned that the AA survey found that many of the signs, although they are desirable, are not exhibited. My new clause specifically referred to "pedestrians", not road users. A sign of the cheapest kind that I described should be exhibited simply to exert pressure on those public utilities or local authorities which do not provide adequate signs. They would know that their names and addresses were exhibited on the roadworks, and that people, apart from the police, might breath down their necks. People could ring their local councillors, the local gas board, or whatever, saying "Your roadworks are not properly guarded and signed". At the moment, unless equipment is left adjacent to the roadworks with the owner's name clearly marked on it, people often do not know where the work originated. That is why I proposed a simple sign of the type that I described.

    457
    In view of what the Minister said, I hope that he will consider the matter further so that a provision may be introduced in another place concerning a simple information panel.
    Mr. Macfarlane: I am anxious to help the hon. Gentleman. Perhaps there has been some confusion on the part of the AA. It may be under the impression that, for example, in Northern Ireland, observance of chapter 8 of the the traffic signs manual has been made mandatory. That is not so. I understand that in Northern Ireland a statutory instrument introduced a provision corresponding to section 174 of the Highways Act 1980, which does not apply to Northern Ireland. That instrument brought Northern Ireland into line with England and Wales, although observance of the manual's advice on roadworks is not mandatory.
    On the other hand, the hon. Gentleman has highlighted a number of features which I shall draw to the attention of my right hon. Friend. However, this Bill is not the appropriate place for the inclusion of his proposal.
    Mr. Cryer: On that basis, I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn.
    Mr. Deputy Speaker: I do not see either of the hon. Gentlemen whose names are appended to new clause 17, so that clause is not moved.

    Clause 3
    CLOSING HOURS FOR TAKE-AWAY FOOD SHOPS
    Mr. Raison: I beg to move amendment No. 3, in page 2, line 28, leave out
    'Subject to subsection (5) below,'.
    Mr. Deputy Speaker: With this, we are to take Government amendments Nos. 4, 12 and 16.
    Mr. Raison: I want to say a brief general word about part III of the Bill.
    As the House will know, on Second Reading and in Committee our proposals for empowering local authorities to control the late-night opening of take-away food shops attracted criticism from hon. Members on both sides. In Committee, my hon. Friend the Under-Secretary of State for the Environment and I gave undertakings to consider a number of matters. We also undertook to consult further the local authority assocations and the organisations which represent the operators of take-away food shops. These consultations have been carried out by the Home Office, and the amendments that I have tabled are the result of our conclusions on them.
    Essentially, clauses 3 to 5 of the Bill as it now stands give a district council power to make a closing order requiring a take-away food shop which is open between the hours of 11 pm and 5 am to close for all or some of that time if the council is satisfied that that would be desirable to prevent unreasonable disturbance to residents in the neighbourhood of the premises. The keeper of such a shop is to be given a right of appeal to a magistrates' court, and thence to the Crown court, against a decision by the district council to make a closing order, or, once the order has been made, against a refusal by the council to revoke or vary the hours specified in the order.
    458
    The most controversial issue has been the earliest hour from which a closing order may operate. The trade has argued that if shops could be required to close at this hour they would lose a substantial proportion of their trade. On the other hand, the local authority associations have said that they should have the discretion to require premises to close at 11 pm, because they are in residential areas where many people have gone to bed at that time.
    We considered the arguments and came to the conclusion that a reasonable compromise would be to change the earliest hour to midnight. A further reason is that that is the hour which has operated in Greater London under the Greater London Council (General Powers) Act 1968.
    The National Federation of Fish Friers has said that the amendment will satisfy its members. The Take-Away and Fast Food Federation, however, wants the hour to be extended to 1 am on most nights and 2 am on Fridays and Saturdays. We think that that would be too late and that it should be left to the discretion of the district councils, which we are entitled to believe will act reasonably. In any case, they will be subject to the supervision of the courts.
    We have also decided to insert further safeguards for the operators. Briefly, they will have a right to make representations to the council before an order can be made, and the council will be able to make an order only if it has received complaints from residents in the neighbourhood.
    There is also a provision requiring councils to deal expeditiously with applications from the keeper to revoke or vary the hours of closing order.
    The amendments have necessitated substantial redrafting of this part of the Bill. If the House accepts the amendment we think that this part will represent a fair balance between the interests of the take-away operators and their customers and those who live in the neighbourhood of the establishments.
    There is a possibility that the clause as drafted might be held not to apply to premises used as a cafe during the day and as a take-away food shop at night. Amendments Nos. 3, 4, 12 and 16 are intended to close that gap.
    Mr. Tristan Garel-Jones: The House should be under no illusion about how important this part of the Bill is. My constituents will be grateful to my right hon. Friend.
    I received today a letter from one of my constituents who had heard rumours—in the event unfounded—that this part of the Bill would not prosper. My constituent, who lives in Brixton Road, Watford, and who has suffered considerably from these establishments in question, wrote:
    "After last night it was almost unbearable—like trying to sleep in a car park. The noise and fumes were terrible, going on well past midnight, and also the rubbish situation is just the same. You said in your letter we were to contact you if we still want the Bill to go through. Of course we do. We all hope it won't be too long."
    I regret that in this part of the Bill we refer continually to closing orders, which seems to imply that it gives local authorities the power to close down the establishments altogether, which is not the purpose.
    I am sorry that my right hon. Friend has extended, in amendment No. 7—
    Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. We are discussing only amendments Nos. 3, 4, 12 and 16. We shall come to amendment No. 7 in due course.
    Mr. Garel-Jones: I am sorry, Mr. Deputy Speaker. I may return to the matter when we reach that amendment.

    459
    I regret that we have used the term "closing order", because it has given rise to a misleading view held not only by the industry but by the general public.
    Mr. Whitlock: Did I understand you to say, Mr. Deputy Speaker, that we shall have a separate debate on amendments Nos. 7, 8, 9 and 10? It appeared that the Minister was talking about those amendments.
    Mr. Deputy Speaker: We shall come to amendment No. 7 soon.
    Amendment agreed to.
    Amendment made: No. 4, in page 2, line 31, leave out `exclusively off the premises' and insert
    'off the premises, other than—

    (a) any premises that are a late night refreshment house, as defined in section 1 of the Late Night Refreshment Houses Act 1969; and

    (b) anypremises that are exempt licensed premises as defined in that section;'.—[Mr. Raison.]

    1.30 am
    Mr. Peter Viggers: I beg to move amendment No. 5, in page 2, line 33, leave out from 'satisfied' to end of line 37 and insert:
    that residents in the neighbourhood of the premises have been unreasonably disturbed either by persons resorting to the premises or by the use of the premises for the supply of means or refreshments and that it is desirable to make such an order to prevent the said residents from being further so disturbed.'.
    Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 18, 19, 20 and 21.
    Mr. Viggers: This is a technical matter, but also, I believe, a matter of some importance. My attention was first drawn to this part of the Bill through contact with a constituency fast-food shop. I was troubled to see the manner in which local authorities are given power to act on evidence that would not be accepted in most circumstances and certainly not in any court of law. Parliament should be certain about the need before it imposes a restriction.
    The Bill seeks to restrict food shop facilities and to damage a fairly substantial trade that involves over 20,000 fast-food outlets. Clause 3(1) would allow a closing order to be made to prevent residents from being unreasonably disturbed. There is no burden of proof on the residents to show that they have been disturbed. Mere apprehension that they might be disturbed is enough. Meanwhile, the shopkeeper, I submit, is placed in the invidious position of having to persuade the council that such apprehension is groundless. In other words, the shopkeeper must prove a negative. This has always been recognised as a burden that should not be placed on anyone by law, if possible.
    If the Bill is passed in its present form, the shopkeeper whose premises are complained about will find that he is subjected to the closing order imposed by the local authority, without any actual disturbance ever having necessarily been alleged or proved. Apprehension is enough. The innocent shopkeeper has a closing order placed upon his premises. His remedy is to appeal to the magistrates court, no doubt incurring legal costs in so doing. The magistrates have the duty of deciding the case. Their criteria will presumably be based on clause 3(1). Mere apprehension of the offence will, or could, suffice to substantiate the closing order. On appeal to the Crown court, the criteria are the same.
    I urge my right hon. Friend to accept that natural justice requires that no shopkeeper should be penalised by a
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    closing order unless the residents first establish that they have actually been unreasonably disturbed and that it is desirable to prevent further such disturbance. The Government have apparently tried to take account of the uncertainty in the Bill as originally drafted by bringing forward Government amendment No. 20, under which a closing order would not be made unless the residents had complained. There is, however, no requirement that the complaint should be justified.
    Natural justice should require that the complaint is justified. Clarity and fairness require that residents should have been disturbed, that they rely on that disturbance, and then seek the closing order to prevent further disturbance.
    Mr. Raison: I shall refer to the amendment of my hon. Friend the Member for Gosport (Mr. Viggers), but, I should like first to explain Government amendments Nos. 18, 19, 20 and 21. The effect of Government amendments Nos. 18 and 20 is very much in line with what I stated in my intervention during the previous debate. It will be to restrict the power of a district council to make a closing order in those cases where local residents have complained that they have been unreasonably disturbed by the late night opening of a particular take-away shop. The council will not be restricted to the substance of these complaints in deciding whether an order should be made. It will be obliged to take all relevant considerations into account, but evidence of actual complaints will be required to trigger off the procedure for making an order. These amendments have been agreed by the local authority associations and the three trade organisations that we have consulted. Government amendments Nos. 19 and 20 are purely consequential drafting amendments.***************
    The purpose of my hon. Friend's amendment is to restrict a council's power to make a closing order to cases where it is satisfied that the late night opening of a particular take-away shop has already caused unreasonable disturbance to residents. I hope that my hon. Friend will accept that we have incorporated the spirit of that in our amendment to restrict the power of councils to act only when they have received complaints of disturbance from residents in the neighbourhood.
    We have introduced fuller safeguards in our amendments, and there is an appeal to the magistrates court. My hon. Friend referred to councils acting on evidence that would not be accepted in a court of law. If that is so, a court of law is available to test it. My hon. Friend seemed to be asking for councils to act as courts of law themselves. I do not think that they are equipped to make the kind of decisions in assessing the evidence and reaching a verdict that he seemed to imply. I do not think that that can be the role of local authorities, because they simply do not operate in that way.
    I believe that the provisions as revised by our amendments are reasonable and fair. They are acceptable to the three relevant trade associations. I hope that in the light of that my hon. Friend will feel able to withdraw the amendment.
    Mr. Viggers: I drafted amendment No. 5 before I had the opportunity to see the amendments proposed by my right hon. Friend. I accept that they take account of the points that I had in mind. It is therefore with pleasure that I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Mr. Raison: I beg to move amendment No. 6, in page 2, line 39 leave out from "and" to second "the" in line 41 and insert "prohibiting".
    Mr. Deputy Speaker: With this we are to take Government amendments Nos. 14 and 15.
    Mr. Raison: This amendment is purely to enhance the drafting of the Bill. Amendments Nos. 14 and 15 are consequential upon amendments Nos. 17, 22 and 26, to which I shall come later and which specify in greater detail the procedures for serving closing and variation orders. I hope that the House will accept the amendment.
    Amendment agreed to.
    Mr. Raison: I beg to move amendment No. 7, in page 3, line 2, leave out "11 o'clock at night" and insert "midnight".
    Mr. Deputy Speaker: With this, we are to take the following amendments:
    No. 8, in page 3, line 2, leave out "11 o'clock at night" and insert
    "one o'clock in the morning".

    No. 9, in page 3, line 2, leave out "11" and inset "12".

    No. 10, in page 3, line 3, leave out "5" and insert "6".

    No. 11, in page 3, line 3, at end insert

    "but in respect of Saturday and Sunday mornings the hours specified shall commence not ealier than two o'clock in the morning".
    No. 13, in page 3, line 19, leave out "11 o'clock at night" and insert
    "one o'clock in the morning, and in respect of Saturday and Sunday morning the hours specified shall commence not earlier than two o'clock in the morning".
    Mr. Raison: The purpose of the amendment and of those tabled by my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) and the hon. Member for Keighley (Mr. Cryer) is to put back from 11 pm to midnight the earliest hour that may be specified in a closing order. I have already said why we believe that this is right. I understand that the amendment will satisfy the National Federation of Fish Friers, which represents 4,000 fish and chip shops. I know that the hon. Member for Nottingham, North (Mr. Whitlock) and the Take-away and Fast Food Federation would prefer the hour to be 1 am from Monday to Friday and 2 am on Saturday and Sunday. As I have said, I believe that that would be too late and would undermine the purpose of the provision. I believe that our proposal is a reasonable and sensible compromise. I hope that the House will accept it.
    Mr. Cryer: I can only say that the amendment sounds a very sensible and reasonable compromise. It is one that I suggested and, by and large, when people follow me they are being reasonable and sensible.
    Dr. Summerskill: I endorse what my hon. Friend the Member for Keighley (Mr. Cryer) has said. He and I have one important thing in common. Halifax and Keighley share the branch of the National Federation of Fish Friers, which felt strongly that an amendment should be made. I am sure that it is welcomed by everybody in Yorkshire, which is the home of fish and chips. Socially, financially and nutritionally, this food is of great value to people in Yorkshire and has given them the energy, the warmth, the muscle and the brain for which they are well known. I welcome the amendment.
    Mr. Gary Waller: May I complete the triumvirate of Yorkshire Members who
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    greatly welcome the change introduced by my right hon. Friend? Without it, local authorities might well have come under pressure from a small number of residents who would prefer the shops to close earlier, and they would have to act without regard for the large number of people who prefer to use the fish and chip shops between 11 pm and midnight. This is an excellent compromise and I am sure that it will be welcomed throughout the North of England.
    Mr. Whitlock: The Minister may feel that he has significantly helped the food trade by tabling these amendments, but I assure him that that view is not held by the majority of people in the trade. No great cheers have gone up around the country in take-away food shops because of what he has done.
    The amendments marginally limit the restrictions on the trade contained in the Bill's original proposals, but they have not stilled the fears of the take-away food trade about what may happen when the Bill is put into operation.
    In Committee, I pointed out that on Second Reading the Minister said that one of the criteria used in deciding to introduce a Bill such as this was that it should be non-controversial. When replying on Second Reading, the Under-Secretary of State for the Environment said that such measures must be largely "non-controversial and precedented".
    In Committee, I and other hon. Members sought to show that the provisions of clause 3 were both controversial and unprecedented. In spite of that, this industry, which is so vitally affected, was not consulted in any way before the Bill was printed. It has been watching our proceedings with fear and trepidation.
    Other hon. Members voiced the same points in Committee, because of which, on 15 December, the Under-Secretary asked that our amendments on closing hours be withdrawn in order that it be left
    "to our good intentions fo find out how we discuss these matters with interested parties".—[Official Report, Standing Committee E, 15 December 1981, c.59.]
    Because of the hon. Gentleman's assurances about discussions and good intentions, the amendments were withdrawn. The secretary of the Take-away and Fast Food Federation wrote immediately to the Minister of State and asked for the promised discussions. They have not taken place.
    On 21 January, five weeks after it was written, a civil servant wrote back referring to the "recent letter" of the federation and sought its comments within five days. That followed the dragging of feet on the part of the Home Office.
    The Minister and his civil servants may regard that as discussion and consultation, but that is not the view of people in the trade. They feel that they have been brushed off. That view was expressed in another letter sent by the secretary of the federation to the Minister. A reply to that was received yesterday—2 February.
    1.45 am
    The civil servant concerned wrote as follows:
    "With regard to your allegation that Ministers have failed to abide by an undertaking given in Committee as to further discussions, I can only say that this was not intended to imply that a meeting would take place, simply that the Home Office would consult with the local authority and trade associations to see if a measure of agreement could be reached. This we have done through correspondence and I think you will agree that the result has not been disadvantageous to the trade interests."

    463
    It has not been disadvantageous to the interests of those concerned, but they feel deceived because discussions have not taken place. There have been no worthwhile discussions. The Home Office has merely played a cat and mouse game. How can anyone try
    "to see if a measure of agreement could be reached"
    when no meeting has taken place? The final sentence reads:
    "However, if you feel that it would be helpful at this stage for us to meet. I am at your disposal."
    The letter was written on 2 February, seven weeks after the Minister had talked about discussions and good intentions and seven weeks after a meeting had been requested. When the letter was written it was too late for any approach to be made that would have had a bearing on these discussions tonight. What of the future? Does the final sentence about discussions mean anything? Does this belated willingness to meet on the part of the Home Office mean that there is still a possibility of real discussions on these issues, and that when they have taken place amendments will be tabled in another place that will save the take-away food industry from what it feels is threatening it? It does feel threatened. As I said in Committee, many of the take-away food shops obtain 20 per cent., 30 per cent., 40 per cent., and even 50 per cent. of their takings after midnight. To cut off that significant proportion—
    Mr. Raison: It is too much to say that we are cutting off those takings. We are merely proposing that after midnight there should be a power, if a local authority feels that things are going wrong, to take action. It is wrong to describe that as "cutting off'. Is the hon. Gentleman going to repeat the declaration of his interest that he made in Committee?
    Mr. Whitlock: I willingly declare my interest, in that I am a parliamentary consultant to an organisation that has the Take-away and Fast Food Federation Ltd. as one of its clients.
    Mr. Campbell-Savours: On the Opposition Benches!
    Mr. Whitlock: That is the declaration that I made in Committee. The take-away food industry is afraid of what the local authorities will do when the Bill is enacted. It fears that the consequences for it will be disastrous.
    Take-away shops remain open at night because it is felt that there is a demand for the services that they provide. The services are demanded by, for example, those who live in bedsitters who do not have adequate cooking facilities, by those who have had an evening's entertainment and cannot afford the money or the time to go to restaurants, by shift workers—
    Mr. Bruce George: By Members of Parliament.
    Mr. Whitlock: —and by all those who work unsocial hours. The list includes policemen, firemen, nurses, taxi drivers, airport staff and, as my hon. Friend the Member for Walsall, South (Mr. George) said, Members of Parliament. It extends to petrol station personnel and gas board fitters who are attending emergencies at night. All these people and many others will be disadvantaged by the earlier closing of take-away food shops. If that earlier closing comes, many will be rendered unemployed because the profitable side of takeaway shops will disappear.
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    In Committee I pointed out that in more than 22 years' membership of the House I have had many complaints about the behaviour of youths leaving youth clubs and people leaving pubs causing disturbances, making noises, causing quarrels, urinating in doorways and gardens, about traffic noise, litter from supermarkets and many other forms of nuisance, but I have not had one complaint about disturbances near take-away food shops.
    My hon. Friend the Member for Workington (Mr. Campbell-Savours) gave details of the lawlessness in his constituency near take-away food shops and asked me to contact the chief constable of Nottinghamshire to obtain similar particulars. I wrote to the chief constable, and the deputy chief constable replied:
    "I am sorry but we do not keep statistics specifically about problems created in specific situations and I am sure you will appreciate it would be almost an impossible task to try to provide you with the detail you seek.
    I think it is, however, fair to say that there is a certain amount of problem from a police point of view at late night take-away food shops, and in particular fish and chip shops. We have had over the past few months complaints from both the City and County Council about noise, nuisance and general rude behaviour of youths who are attracted to such premises simply because they are there. There are, of course, many shops which create no problems for us at all and one type of take-away shop that gives little problem surprisingly is the Chinese take-away food shop."
    So there is no great record of crime in Nottinghamshire around the take-away food shops such as occurs in Workington.
    In Committee, my hon. Friend the Member for Workington revealed that he had contacted the Nottingham city council. As reported at column 126, he said:
    "It seems that the Nottingham district authority has a special acoustics squad, which is called the 'SAS', to deal with the problems of nuisance outside late-night cafes and take-away food shops."—[Official Report, Standing Committee E, 22 December 1981; c. 126.]
    My hon. Friend was claiming that the special acoustics squad was used exclusively for activities around take-away food shops. That was news to me. Therefore, I wrote to the chief executive and town clerk of Nottingham, who replied:
    "Although it is quite true that there is within Mr. Hill's department"—
    Mr. Hill is the chief environmental health officer—
    "a team of officers known colloquially as the 'special acoustics squad', it is certainly not the case that these officers ate exclusively engaged in dealing with problems arising from late night cafes and take-away food shops."
    Mr. Campbell-Savours: Not exclusively.
    Mr. Whitlock: Not exclusively.
    "They are in fact responsible for investigating all complaints of excessive noise and their work is not related to any specific type of premises. Indeed, I understand from Mr. Hill that complaints about noise from late night food premises are fairly uncommon—only one such complaint has been recorded during the past year."
    No horrific situation exists in Nottingham such as seems to exist in Workington. The city of Nottingham has never sought private legislation to control the activities of take-away food shops.
    What conclusions can be drawn from all this? The same laws of the Land apply to the city of Nottingham as to elsewhere in England and Wales. The city of Nottingham manages to ensure that the services of take-away food shops are made available to those who need them without the disturbances that occur in other places. All this points

    465
    to the fact that clause 3 is unnecessary, as was powerfully argued in Committee, particularly by my hon. Friend the Member for Rotherham (Mr. Crowther) from his standpoint as the chairman of a planning committee for many years.
    When food shops are closed and the less well-off members of the community are deprived of the services they need, the vandals, the litterbugs, the foul-mouthed, the feckless, the inebriated, the inconsiderate, the noisy, the nasty, the anti-social, the misfits, the don't-care-adamn-for-anybody brigade will still be around to inflict their inconvenience and nuisance upon the community at large.
    It is so often said that doctors and legislators treat the symptoms of disease, be they medical or social, rather than the disease itself. In this Bill, not only are we not treating the social malaise that lies behind the problems at which the Bill is aimed, we are not treating the symptoms either. The Government are merely ensuring that the symptoms of the disease occur in another way, around some other kind of establishment. The Bill will do nothing to deal with the drink problem, which is the main cause of disturbances around take-away food shops. It is not teaching people to be litter-conscious or considerate of others. It is making no attempt to inculcate standards of any kind. The Government are merely saying that the Bill is needed because there are trouble makers of one kind or another in the community. It will be possible under this Bill to punish the majority of law-abiding citizens who have shown that they need the services of the take-away food shops. Under the Bill I feel sure that many people will be put out of work as shops are closed down.
    Mr. Tony Speller: The hon. Member for Nottingham, North (Mr. Whitlock) comes from a fine city. Those of us who come from coastal areas that have a considerable tourist and holiday traffic are aware of the need to retain a balance between the interests, which I also represent, of fish friers and take-away and fast food retailers, and those of the residents of these areas. I congratulate my right hon. Friend the Minister of State because these measures show that that balance is being rightly held.
    It does no service to my friends and constituents in the fast food and fish and chip shop business if the residents feel that in some way the retailers are obtaining favour at the expense of the residents. Similarly, it does the residents no good to feel that in some way they can, if they wish, get rid of the fast food shop, which is not always a most popular neighbour. By retaining the balance, my right hon. Friend is keeping a sense of proportion.
    Mr. Campbell-Savours: I intervene briefly to urge the Minister to take the opportunity of wholeheartedly condemning the reports that have appeared in the trade press which have grossly misrepresented the position of Parliament and of the Government in introducing the Bill.
    I do not want to be churlish, but I argued vigorously for local authorities to have the right, where abuse took place, to close premises at 11 o'clock, and I am sorry that the Minister has had to change it to midnight. He will recall from his conversations with the different associations of local authorities that they all made representations in favour of 11 pm. In the Cumbria Bill from my constituency I think the time given was 11.30 pm. After
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    the Committee proceedings I thought that we had arrived at an informal agreement that there would be a threshold at about 11.30 pm. Now it has been changed to midnight—I presume as a result of pressure.
    I hope that the noble Lords—if that be the term with which to describe them—will take the opportunity, when the Bill comes before them, to change the time from midnight to 11.30 pm.
    2 am
    Mr. Garel-Jones: I join the hon. Member for Workington (Mr. Campbell-Savours) in his remarks about the trade press. Indeed, the letter that I read to the House was one of a crop that I have received from people in my constituency expressing concern about the future of the Bill as a result of articles they had read in the Catering Times. Those articles give a misleading impression about the intentions of my right hon. Friend and the Minister towards the Bill.
    I remind the hon. Member for Nottingham, North (Mr. Whitlock) that it is not without interest that my right hon. Friend thought it necessary to intervene in his speech. The hon. Member was suggesting, because of the use of the unfortunate term "closing order", that the Bill would somehow bring to an end the fast food catering industry. My right hon. Friend dealt with that matter adequately and I need not pursue it further. If Nottingham is a city in which those problems do not exist, the hon. Member has nothing to fear. We can, I hope, assume that the local authority in Nottingham is responsible, and if it is not receiving complaints—the hon. Member tells us that it is not—it will have no need whatever to invoke the powers given to it under the Bill.
    I associate my self with the points made by the hon. Member for Workington. We saw earlier a triumvirate of Yorkshire Members—the hon. Member for Keighley (Mr. Cryer) was one of them—defending the fish and chip shops. I regret very much that my right hon. Friend has moved from 11 pm to midnight. It is simply an enabling time. It gives the local authority the power to act within that time scale. It does not in any circumstances impose upon the local authority the duty to shut down fish and chip shops in Yorkshire or fast food take-away shops in Watford.
    I agree with my right hon. Friend that most authorities will tend to be responsible in operating the provision. They will recognise that the establishments concerned provide a service to the public and a service which many of our constituents appreciate.
    The House should not be mislead by the remarks of the hon. Member for Nottingham, North. The problem is very serious in my constituency. I see that my hon. Friend the Member for Paddington (Mr. Wheeler) is here and I know that he is concerned about it, too. It is indeed a serious problem for many of our constituents. I notice that my hon. Friend the Member for Bath (Mr. Patten) is also assenting.
    My constituents and the constituents of most hon. Members here will be very pleased to see their local authority given powers to act in this area, and I have no doubt that my own local authority and most local authorities will use those powers in a responsible way to safeguard the interests of residents and at the same time to ensure that the fast food industry can continue to give the service that it has given the public in the past. Therefore, I welcome these provisions.
    Dr. David Clark: I should like to follow immediately the points made by the hon. Member for Watford (Mr. Garel-Jones). This is a major problem, as was recognised in Committee, when we had a full and frank discussion on it.
    Obviously the problem is greater in some communities than in others. I was particularly impressed by the evidence produced in Committee by my hon. Friend the Member for Workington (Mr. Campbell-Savours). He quoted figures from the police in Cumbria showing the number of convictions connected with take-away food shops. As my hon. Friend the Member for Nottingham, North (Mr. Whitlock) said, not only take-away food shops are affected. Many of those at the food shops had been drinking at local pubs. It presented a serious problem.
    I have received many letters from various organisations. For example the North-East Chinese community contacted me almost in a state of hysteria. They had been led to believe that their take-away Chinese food shops would be closed at 11 o'clock. I had to reassure them that it was only permissive legislation. I hope that the Government will use all the facilities at their disposal to get the message across to the non-English communities, which may have got hold of the wrong end of the stick.
    The compromise that the Government have reached is probably right. I had thought that we could tie it in with one hour after the local pub closing tine, but I appreciate that that would cause administrative difficulties. On balance, the Government have got it right.

    Amendment agreed to.

    Amendments made:

    In page 3, line 8, leave out subsections (5) and (6).

    In line 32, leave out subsection (10).

    In line 41. at end add—

    '(12A) In this Part of this Act "the keeper", in relation to any premises, means the person having the conduct or management of the premises.'.

    In line 41 at end add—

    '(12B) Until sections 6(1) and (2) below come in force this section shall have effect as if the following paragraph were substituted for subsection (1)(b) above—

    "(b) a house, room, shop or building which is licensed for the sale of beer, cider, wine or spirits;".'.

    Clause 4
    CLOSING ORDERS ETC.—PROCEDURE AND APPEALS
    Mr. Raison: I beg to move amendment No. 17, in page 4, line 1, leave out subsections (1) and (2).
    Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 22, 24, 25 and 26.
    Mr. Raison: Another of the undertakings that I gave in Committee was to consider whether an operator should have the right: to make representations to the council before a closing order was made. Amendment No. 22 is the result of our further deliberations. It has been agreed by the local authority associations and by the three trade associations.
    Thus, if the council considers that it would be desirable for an order to be made, it will be required to serve notice on the keeper giving its reasons for making the order. In that connection, while there is no objection in principle to its revealing the names and addresses of the initial complainants, for obvious reasons we believe that it is right that it should not do so without first obtaining the complainants' consent. If the keeper of the premises
    468
    wishes to make representations to the council against the order being made, he will then have 28 days in which to write to the council requiring it to hear his case. The council will not be able to make the order during those 28 days or, once the keeper has requested a hearing, until a reasonable period has elapsed for him to make his representations.
    In Committee the hon. Member for Workington (Mr. Campbell-Savours) drew attention to the problem that might face a council when it is unable to identify the person who has the conduct or management of the premises on which it wishes to serve an order. We undertook to seek the views of the local authority associations about that. They have confirmed that there could be situations when it could be difficult to establish the identity of the person in control of the premises. We believe that it would be desirable to specify directly in greater detail the procedures for serving notices, and to enable orders to be addressed simply to "the keeper-. That is what amendment No. 26 tries to do. The procedure has been approved by the local authority associations. Amendments Nos. 17, 24 and 25 are consequential drafting amendments.
    Amendment agreed to.
    Amendments made:

    No. 18, in page 4, line 5 leave out 'Each of the following orders' and insert

    'A district council shall take all relevant circumstances into consideration when determining whether to make'.

    No. 19, in page 4, line 6 leave out 'and' and insert 'or'.

    No. 20, in page 4, line 14 at end add

    'but a council may not make such an order unless residents in the neighbourhood of the premises to which the order, if made, would relate have complained of disturbance such as is mentioned in section 3(1) above'.

    No. 21, in page 4, leave out lines 15 and 16.

    No. 22, in page 4, line 16 at end add—

    '(3A) If a district council propose—

    (a) to make a closing order; or

    (b) to make such a variation order as is mentioned in subsection (3)(b) above, they shall first serve a notice in accordance with subsections (4) to (4C) below—

    (i) giving their reasons for seeking to make the order; and

    (ii) stating that within 28 days of service of the notice the keeper of the premises to which the order, if made, would relate may in writing require them to give him an opportunity to make representations to them concerning the matter.

    (3B) Where a notice has been served under subsection (3A) above, the district council shall not determine the matter until either—

    (a) the keeper has made representations to them concerning it; or

    (b) the period during which he could have required them to give him an opportunity to make representations has elapsed without his requiring them to give him such an opportunity; or

    (c) the conditions specified in subsection (3C) below are satisfied.

    (3C) The conditions mentioned in subsection (3B) above are—

    (a) that the keeper has required the district council to give him an opportunity to make representations to them;

    (b) that the council have allowed him a reasonable period for making his representations; and

    (c) that he has failed to make them within that period.

    (3D) The council shall not reveal to the keeper the name or address of any person who has made a complaint

    469
    concerning the premises, unless they have first obtained the consent of the person who made the complaint.'—[Mr. Raison.]

    Mr. Raison: I beg to move amendment No. 23, in page 4, line 16, at end add—
    '(3E) Where the keeper of any premises has applied for a variation order or a revocation order, the council shall be deemed to have refused the application if they fail to determine the matter within eight weeks from the date on which the application was made.'.
    The amendment follows a further undertaking given in Committee to the hon. Member for Nottingham, North (Mr. Whitlock). Its purpose is to ensure that district councils deal quickly with applications made to them by the keepers of premises, which are the subject of a closing order, for the order to be revoked entirely or for the hours specified in it to be varied. Since the applicant will have a right of appeal to the magistrates court against a refusal by the council to grant such an order, the effect of the amendment will be that, unless the council determines the matter within eight weeks, he may then appeal to the court as if the application had been refused. There are analogies in the planning law with that procedure.
    The amendment has been drafted in consultation with the local authority associations and the trade organisations. The Government hope that councils will normally deal with applications expeditiously.
    Amendment agreed to.
    Amendments made: No. 24, in page 4, line 16, at end add—
    '(3F) When a council make an order under section 3 above, they shall serve a copy in accordance with subsections (4A) to (4C) below.
    (3G) A closing order and any such variation order as is mentioned in subsection (3)(b) above shall come into force 21 days after the date of service.'.
    No. 25, in page 4, line 17, leave out 'Any other variation order' and insert
    'A variation order other than a variation order such as is mentioned in subsection (3)(b) above'.
    No. 26, in page 4, line 18, at end add—
    `(4A) Any document required to be served under this section shall be served on the keeper of the premises to which it relates and may be served on him by post.
    (4B) For the purposes of service any such document may be addressed to the keeper at the premises to which it relates.
    (4c) The keeper may be addressed either by name or by the description of "the keeper" of the premises (describing them).'.—[Mr. Raison.]

    Clause 12
    APPLICATION OF PART VII
    Mr. Raison: I beg to move amendment No. 27, in page 13, line 9 leave out from 'borough' to end of line 13 and insert
    'and
    (c) the Common Council of the City of London.'.
    It is not considered necessary to provide for the registration of acupuncturists, tattooists, ear-piercers and electrolysists and their premises in the areas of jurisdiction of the Inner and Middle Temples, as they are unlikely to seek to practise or carry on business there. The Council of the Isles of Scilly already has powers to assume enabling powers such as this part confers and does not need to have them separately conferred in the Bill.
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    The amendment removes the sub-treasurer of the Inner Temple, the under-treasurer of the Middle Temple and the Council of the Isles of Scilly from the authorities upon whom the enabling powers conferred by part VII are conferred by the Bill. I hope that this important proposal commends itself to the House.
    Amendment agreed to.

    Clause 13
    ACUPUNCTURE
    Mr. Raison: I beg to move amendment No. 28, in page 13, line 19, at end add
    'but a person who is registered under this section does not contravene this subsection merely because he sometimes visits people to give them treatment at their request.'
    An amendment in Committee amended the subsection to provide that a person registered by a local authority to carry on the practice of acupuncture must also have registered premises in which to practice. On occasions, however, a patient may seek treatment at home or elsewhere than in the registered premises and the amendment makes that permissible.
    Amendment agreed to.
    Mr. Raison: I beg to move amendment No. 29, in page 13, line 22, leave out from 'and' to 'and' in line 23 and insert
    'the premises where he desires to practise'.
    Mr. Deputy Speaker: With this we may take Government amendment No. 30.
    Mr. Raison: The amendment reinforces and makes subsection (3) consonant with subsection (2). An applicant seeking registration to permit him to practise acupuncture in any area where section 13 is in force must also have premises in which to practise and they must also be registered at the same time as he is registered. On applying for registration for himself he must, therefore, under amendment No. 30 also give the local authority particulars of the premises in which he wishes to practise so that these, too, may be registered.
    Amendment agreed to.
    Amendment made: No. 30, in page 13, line 31 leave out from first 'to' to 'and' in line 32 and insert
    'the premises where the applicant desires to practise'.—[Mr. Raison.]
    Mr. Raison: I beg to move amendment No. 31, in page 13, line 40, leave out from 'premises' to end of line 42.
    Mr. Deputy Speaker: With this we may take Government amendment No. 37.
    Mr. Raison: Subsection (7)(a) is unduly long. We do not believe that the words that we propose to take out are necessary.
    Dr. Summerskill: The Minister says that the subsection is unduly long and the words are not necessary. I agree that the subsection is long, but will he elaborate on why the words are not necessary?
    Mr. Raison: We do not believe that it needs to be stated specifically that byelaws requiring the cleanliness of premises should also require that they and their fittings should be kept in such good order, repair and condition as will enable them to be cleaned effectively. If they are to be kept clean, it follows, without the need to state it, that they must also be kept in good order, repair and condition.
    2.15 am
    Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. Are we discussing amendment No. 37 or did we miss it?
    Mr. Deputy Speaker: We are debating No. 31 with amendment No. 37.
    Mr. Campbell-Savours: If I am out of order, I am sure I will be ruled so, but there is an amendment down which was not called and I wondered, on the matter concerning ultra-violet tanning equipment, whether any consideration had been given to that in the construction of clause 14 which, of course, we are discussing in this general grouping of amendments.
    Mr. Raison: The hon. Gentleman is trying to get me to comment on an amendment which has not been called and I do not feel the need to do so.
    Amendment agreed to.

    Clause 14
    TATTOOING, EAR-PIERCING AND ELECTROLYSIS
    Mr. Raison: I beg to move amendment No. 33, in page 14, line 19, leave out from 'shall' to end of line 22 and insert
    'only carry on a business mentioned in sub-section (1) above in any area in which this section is in force in premises registered under this section for the carrying on of that business; but a person who carries on the business of tattooing, ear-piercing or electrolysis and is registered under this section as carrying on that business does not contravene this subsection mere because he sometimes visits people at their request to tattoo them or, as the case may be, to pierce their ears or give them electrolysis'.
    This amendment brings subsection (2) of clause 14 into line with subsection (2) of clause 13, as, earlier in Committee and now again, amended. It is considered important that a person should not be registered to carry on the businesses of tattooing, ear-piercing and electrolysis in any area where this clause is in force unless he also carries it on from premises which have also been registered and the cleanliness of which can be secured under byelaws made by the registering authority. Some persons may wish to be tattooed, have their ears pierced or be given electrolysis at home or elsewhere than in the registered premises. If they request this, this amendment makes this permissible, but, since a request must be made, the tattooists, ear-piercers and electrolysists are debarred from, for example, setting up their businesses temporarily in premises other than those registered as a means of soliciting business.
    Mr. R. C. Mitchell: In line 6 of the amendment, is the word "mere" correct, or should it be "merely"? Secondly, in the next line, there is a word which does not usually appear in legislation—"sometimes". "From time to time" and "occasionally" appear, but what does the Minister think is the legal definition of "sometimes"? Is it not a vague word which, in a court case, is liable to interpretation and could give rise to some difficulty?
    Mr. Raison: The hon. Gentleman is right about the word "mere"—it should read "merely". He has rather flummoxed me on the word "sometimes". Offhand, I cannot see any particular legalistic merit in saying "from time to time" as opposed to "sometimes". They both seem
    472
    to be alternative uses of the English Language. I will write to the hon. Gentleman if there is a subtle point, but I otherwise ask him to accept the drafting as it stands.
    Amendment agreed to.
    Mr. Raison: I beg to move amendment No. 34, in page 14, line 24, leave out from 'and' to `and' in line 25 and insert
    'the premises where he desires to carry on his business'.
    Mr. Deputy Speaker: With this, it is convenient to take Government amendment No. 35.
    Mr. Raison: These two amendments require that a person who is registered in an area in which clause 14 is in force to carry on the business of tattooing, ear-piercing or electrolysis must also carry on that business from registered premises. When he applies for registration he must also give particulars of the premises in which he wishes to carry on his business so that these too may be registered at the same time.
    Amendment agreed to.
    Amendment made: No. 35, in page 14, line 33 leave out from first `to' to 'and' in line 37 and insert
    'the premises where the applicant desires to carry on his business'.—[Mr. Raison.]

    Clause 15
    PROVISIONS SUPPLEMENTARY TO SS. 13 AND 14
    Mr. Raison: I beg to move amendment No. 38, in page 16, line 37, at end add—
    '(12) Nothing in this Part of this Act applies to anything done to an animal.'.
    This amendment is sought at the request of the British Veterinary Association, which has pointed out that a number of veterinary surgeons use acupuncture in conjunction with conventional treatment, that tattooing is an accepted method of marking animals for identification and that ear-piercing is used to mark cattle and sheep. Since the purpose of this part of the Bill is to protect humans from infection, it is desirable to amend it to make it clear that it is not concerned with animals.
    Amendment agreed to.

    Clause 17
    SALE OF FOOD FROM STALLS AND CONTAINERS—PROVISION FOR REGISTRATION
    Mr. Raison: I beg to move amendment No. 39, in page 17, line 31 leave out 'container or stall'.
    This is a purely technical amendment.
    Dr. Summerskill: Will the Minister explain what he means? According to the amendment, he is taking out the words "container or stall". However, subsection (11) defines "stall" in the following way—
    "any stand, mobile canteen, vehicle (whether movable or not) or barrow".
    How can the amendment be technical?
    Mr. Raison: The answer is that subsection (4) already enables the local authority to require particulars as to any stall or container to be used for the selling of food by the applicant. Therefore, the words are otiose.
    Amendment agreed to.
    Mr. Raison: I beg to move amendment No. 40, in page 17, line 43 leave out subsection (9).

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    Subsection (9) requires the local authority to keep a list of the persons and premises registered with it under clause 17. The purpose of registration is to indentify to the local authority those persons and premises subject to clause 17. Of necessity local authorities will keep records and therefore it is considered unnecessary specifically to provide in the clause for what would be normal administrative practice.
    Amendment agreed to.
    Mr. Raison: I beg to move amendment No. 41, in page 18, line 6 leave out from 'held' to 'or' in line 8 and insert
    'under a grant or presumed grant or an enactment or order'.
    Mr. Deputy Speaker: With this it is convenient to take Government amendments Nos. 65 and 82.
    Mr. Raison: These amendments will exempt from the provisions of clauses 17 and 27 and paragraph 2(b) of schedule 3 markets held by virtue of grant or presumed grant from the Crown or under statutory authority.
    All three provisions are intended to exempt markets held under legal authority. Those held merely by virtue of custom, where groups of traders are in the habit of gathering together occasionally, do not fall within that category. It is therefore proposed to delete the references to "custom". At the same time the references to"prescription"—meaning a right which, through immemorial usage is presumed to derive from an ancient grant from the Crown—would be deleted in favour of the preferable term "presumed grant". Finally, the exemptions will include a market governed by an enactment or an order made under an enactment.
    Amendment agreed to.
    Mr. Whitlock: I beg to move amendment No. 42, in page 18, line 36, at end insert—
    '(h) to the sale or offer or exposure for sale at a pleasure fair within the meaning of section 75(2)(a) of the Public Health Act 1961.'.
    Pleasure fairs provide entertainment that is enjoyed by many people. They are part of the British scene and their history goes back for centuries. Ancient charters established their place in our culture long ago. Perhaps that is why there is a large all-party group of hon. Members who keep in touch with the affairs of travelling showmen through the Showmen's Guild. The amendment has the support of several hon. Members from both sides of the House.
    Clause 17 requires the registration of any person intending to sell
    "for private gain ߪor offer or expose for sale any food from a stall or container".
    That provision is well precedented in private legislation. Similar clauses were introduced as long ago as the 1930s. However, until 1979 local authorities did not apply that to food sold at pleasure fairs within the meaning of section 75 of the Public Health Act 1961.
    In 1979 and 1980, the borough of Doncaster, under section 20 of the South Yorkshire Act, required travelling showmen to register for the first time. It is clear to members of the all-party group that registration for travelling showmen who provide refreshments at fairs presents problems both for showmen and for the local authorities, which seem to be out of all proportion to the public benefit that would stem from registration.
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    Travelling showmen visit dozens of fairs each year, in many different authorities. Separate registration would be needed for each showman and each authority, for fairs that last for only a day or two at a time. Travelling showmen who operate refreshment stalls are already bound by the regulations under the Food and Drugs Act. Their stalls are in the open air, and, therefore, readily available for inspection. Travelling showmen do not have premises within the meaning of clause 17(11). Therefore, any requirement to register them is rendered inappropriate by that clause.
    Therefore, I hope that the amendment will be accepted to make it clear that travelling showmen who serve refreshments at pleasure fairs do not have to register in this way.
    Mr. Raison: I have listened to the hon. Gentleman's argument. His amendment as drafted would provide exemptions that are not consistent with the exemptions in clause 17(10). That would produce complications. However, we are prepared to consider further the implications of his proposal with a view to tabling a revised amendment at Lords Committee stage. I hope that, on the basis of that assurance, the hon. Gentleman will not press his amendment.
    Mr. Whitlock: I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Mr. Raison: I beg to move amendment No. 43, in page 19, line 4, after '(iii)', insert
    'articles or substances used only as'.
    This is a technical amendment to bring the definition of "food" more closely into line with general food law.
    Amendment agreed to.

    Clause 21
    STATUTORY NUISANCES
    Mr. Macfarlane: I beg to move amendment No. 44, in page 20, line 40, leave out "prejudicial to' and insert
    '"injurious, or likely to cause injury, to the public'.
    Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 45.
    Mr. Macfarlane: These are small technical amendments designed to avoid a potential conflict between the Public Health Act 1936 as amended by the clause and the Health and Safety at Work Act etc. 1974.
    As originally drafted, the term "prejudicial to" health could have allowed the use of the statutory nuisance provisions to deal with the health of workers in relation to activities at their work place. That is dealt with fully by section 2 of the Health and Safety at Work etc. Act 1974. We merely wish to avoid any possible duplication of controls. The amendment therefore changes the term "prejudicial" to health to
    "injurious, or likely to cause injury,"
    to the public. It makes it clear that the statutory nuisance powers are to be used to protect the public at large and avoids the possible duplication of powers.
    Amendment agreed to.
    Amendment made:
    No. 45, in page 21, line 4, leave out —prejudicial to' and insert
    'injurious, or likely to cause injury, to the public'.—[Mr. Macfarlane.]

    Clause 22
    POWERS TO REPAIR DRAINS ETC. AND TO REMEDY STOPPED-UP DRAINS ETC.
    Mr. Macfarlane: I beg to move Amendment No. 46, in page 21, line 18, leave out 'subsection (6)' and insert 'subsections (6A) and (7)".
    Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 47, 48, 49, and 50.
    Mr. Macfarlane: Once again these are drafting amendments.
    Amendment No. 47 will make the power of a local authority to recover expenses for remedying a stopped-up drain, private sewer and so on subject to any order that the court may make about expenses. That will keep the provision in line with the exising section 17(2) of the Public Health Act 1961.
    Amendments Nos. 46 and 48 are consequential. Amendments Nos. 49 and 50 will preserve the existing provisions of section 18(3) of the Public Health Act 1961. Where a local authority has wrongly concluded that a drain or private sewer needs attention, the authority will not be able to recover the expenses.

    Amendment agreed to.

    Amendments made: No. 47, in page 21, line 42, after 'and', insert 'subject to subsections (6A) and (7) below,'.

    No. 48, in page 22, line 28, leave out 'and' and insert—

    '(6A) Subject to subsection (7) below,'.

    No. 49, in page 22, line 31, leave out

    'The power conferred by subsection (6) of this section includes power,'.

    No. 50, in page 22, line 36, leave out `to order that'.—[Mr. Raison.]

    2.30 am
    Amendment made: No. 51, in page 22, line 38, leave out '(6)' and insert '(1)'.—[Mr. Macfarlane.]
    This is a minor drafting amendment.
    Amendment agreed to.

    Clause 23
    CONTROL OF DEMOLITIONS
    Mr. Macfarlane: I beg to move amendment No. 52, in page 24, line 26, leave out 'owner of any property' and insert 'occupier of any building'.
    Mr. Deputy Speaker: With this we are to take Government amendment No. 53.
    Mr. Macfarlane: Amendment No. 52 provides that a person giving notice to the local authority of his intention to demolish a building shall send or give a copy to the occupier of any adjacent building. Amendment No. 53 provides that a local authority serving notice imposing conditions relating to a demolition shall send or give a copy of the notice to the owners and occupiers of adjacent buildings.
    I shall deal first with amendment No. 52. Section 29(3) of the Public Health Act 1961, as set out in clause 23(1), requires a person intending to demolish a building to notify owners of adjacent property. However, there are no means by which such a person is empowered to ascertain the names of adjacent owners, and it is considered that it is the enjoyment of the occupiers of a building that is most likely
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    to suffer disturbance from adjacent demolition works, and there is no difficulty in identifying the occupiers of a building, as opposed to an absent owner. It is therefore considered reasonable and practicable for a person undertaking the demolition of a building to serve notice of the fact on the occupiers of adjacent buildings, rather than on the owners of such buildings. In many cases the residential occupiers of a building will also be the owners.
    I come to amendment No. 53. Section 29A(5) of the Public Health Act 1961, as set out in clause 23(1) requires the local authority to give a copy of its notice imposing conditions, if any, to the owner of any adjacent property. This is linked with a requirement in section 29(3), as amended by amendment No. 52, to require the person undertaking the demolition to inform adjacent occupiers. It is accordingly proposed that the local authority should similarly be required to copy any notice that it gives to the occupiers to the owners of adjacent buildings.
    It is thought important that owners should be made aware of any conditions imposed by the local authority which may affect their building, such as requirements for the demolisher to undertake works of repair or weatherproofing. As local authorities are empowered to obtain details of the ownership of buildings, this is a reasonable and practicable requirement. At the same time, it is considered that the term "property" should be more closely defined to prevent any possible misconstruction. It is therefore substituted in both cases by the word "building".
    Amendment agreed to.
    Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. We have discussed amendments to clause 21, but there is no clause 21 in my copy of the Bill. Perhaps the Minister will comment on that.
    Mr. Deputy Speaker: Did I read it in correctly?
    Mr. Raison: No. It appears that there is a mistake. On page 20 of the Bill clause 20 is followed by clause 22, and that is followed by clause 22. 1 suspect that the first clause 22 should be clause 21.
    Mr. Deputy Speaker: Has the hon. Member got that right? There is a misprint on page 20, where clause 22 should read clause 21. Clause 22 on page 21 is correct.

    Clause 23
    CONTROL OF DEMOLITIONS
    Amendments made: No. 52, in page 24, line 26, leave out 'owner of any property' and insert
    'and occupier of any building'.
    No. 53, in page 25, line 34, leave out 'of any property' and insert
    'and occupier of any building'.—[Mr. Macfarlane.]
    Mr. Macfarlane: I beg to move amendment No. 54, in page 28, line 24, leave out 'originally' and insert
    'if this section had not been'.
    This is a drafting amendment, necessary because section 29(4)(b) of the Public Health Act 1961 was slightly amended by the Housing Act 1974, which deleted the words "or clearance order" in both places where they appear.
    Amendment agreed to.

    Clause 24
    PROTECTION OF DAMAGED BUILDINGS
    Amendments made: No. 55, in page 28, line 28, leave out
    '(other than a county council and the Greater London Council)'.
    No. 56, in page 29, line 38, at end add
    'and "local authority" means a district council a London borough council, and the Common Council of the City of London'.—[Mr. Macfarlane.]

    Clause 25
    ENFORCEABILITY BY LOCAL AUTHORITIES OF CERTAIN COVENANTS RELATING TO LAND
    Mr. Macfarlane: I beg to move amendment No. 57, in page 32, line 11 leave out from 'Council,' to 'and' in line 13.
    Mr. Deputy Speaker: With this amendment we shall take Government amendment No. 58.
    Mr. Macfarlane: These minor amendments remove unnecessary references to the Council of the Isles of Scilly. Suitable provision is made in section 265 of the Local Government Act 1972 to apply the provisions of this clause by order to the Isles of Scilly at the Council's request.
    Amendment agreed to.
    Amendment made: No. 58, in page 32, line 16 leave out subsection (10).—[Mr. Macfarlane.]

    Clause 26
    LOCAL Land CHARGES
    REGISTERS—COMPUTERISATION ETC
    Mr. Macfarlane: I beg to move amendment No. 59, in page 33, line 6, leave out `(3)` and insert `(1A)`.
    Mr. Deputy Speaker: With this we shall take Government amendment No. 60.
    Mr. Macfarlane: Amendment No. 59 simply corrects a minor drafting error.
    Amendment No. 60 is designed to make it clear that the gloss on the phrase
    "office copy of an entry in any local Land charges register"
    added by clause 26(e) to section 12 of the Local Land Charges Act 1975 also covers section 13 of the Act, where there is an almost identical phrase.
    Clause 26(e) makes a consequential amendment to section 12 of the Local Land Charges Act. That section provides that an office copy of an entry in a register can be admitted in evidence. Clause 26(e) ensures that the term "office copy" is wide enough to cover extracts from computerised registers. However, section 13 of the 1975 Act also refers to office copies of entries in registers, this time in the context of giving protection to those acting in a fiduciary capacity—for example, solicitors, trustees and personal representatives—who place reliance on erroneous office copies. The same widening of the meaning of the term is plainly required here, too, and that is what the amendment achieves. It does so not by amending section 13 as well but by inserting an appropriate entry in the interpretation section of the 1975 Act.
    Amendment agreed to.
    Amendment made: No. 60, in page 33 leave out lines 11 to 14 and insert—`(e)The following subsection shall be inserted after subsection (1) of section 16 (interpretation)—
    "(1A) Any reference in this Act to an office copy of an entry includes a reference to the reproduction of an entry in a register kept otherwise than in documentary form.".'.—[Mr. Macfarlane.]

    Clause 27
    TEMPORARY MARKETS
    Mr. Macfarlane: I beg to move amendment No. 61, in page 33, line 22 leave out 'Any' and insert
    'Subject to subsection 2(A) below, any'.
    Mr. Deputy Speaker: With this we shall take Government amendments Nos. 63 and 66.
    Mr. Macfarlane: The amendments are minor consequential drafting amendments. Amendment No. 61 paves the way for the exclusion currently provided for by subsection (5)(c) to be provided for instead by the new subsection (2A). Amendment No. 66 deletes the present provisions of subsection 5(c) following their transfer to new subsection (2A).
    Amendment agreed to.
    Dr. David Clark: I beg to move amendment No. 62, in page 33, line 30 at end insert
    "The council of the district shall notify the parish or community council within whose area the proposed market is situated".
    We are trying to improve communications and iron out difficulties before they occur. All that we are asking is that when a person notifies a district council of an intention to hold a temporary market, if that market falls within the area of a local community or parish council the district council shall as a matter of form notify the notice of intention to the parish council.
    I can envisage a town council area where a temporary market is held occasionally. Adjacent to the site of the temporary market is a local swimming pool and sports arena run by the parish or town council. If the town or parish council is aware that a temporary market is to take place, it may offer to make facilities such as toilets available to the users of the market. There would be benefits, I submit, if the parish councils and community councils were kept informed of all developments. It has been argued by the Minister that an undue burden would be placed on district councils. I have seen the letter that he wrote to the National Association of Local Councils. I should have thought that in these days of modern photocopying the proposal contained in the amendment is an easy exercise.
    It is, I believe, a requirement of planning law that all plans relating to a parish council go first to the district council and are then sent to the parish council for comment. I am not even asking for comment. I ask only that a copy of the original notice should be sent to the parish council, the town council or the community council for ease of communication and better facilitation of the temporary market. I hope that the Minister will view the matter in the same light.
    Mr. Macfarlane: The hon. Member for South Shields (Dr. Clark) and I have discussed this matter previously. I am aware of his concern and probably that of hon.

    479
    Members on both sides of the House. I am also aware of the interest of parish and community councils. I am not, however, entirely convinced that there is a sufficient case for these councils needing to know about proposed temporary markets to justify a further imposition on district councils. That further imposition could mean a requirement that copies of notifications should be passedon.
    Clause 27 amounts simply to a notification procedure. It is not a procedure where the operator states his case and not a procedure where the objectors have opportunities to make their views known. Such rights will arise if a council decides, for example, to take enforcement action under the planning Acts. When these notifications are made, the district and the borough councils will need to take action quickly if they consider it warranted. In some cases, they may want to make contingency arrangements for traffic, parking and such matters. In others, they may want to consider using their powers to prevent the market being held.
    I would certainly expect district councils to know very well when a market is undesirable and if necessary to consult the parish or community council concerned—or, if the district thought it an appropriate course, there is nothing to stop it making arrangements for informing the parish and community councils of these notifications. That is totally different from making this a requirement of the legislation.
    I am mindful of the constructive approach that the hon. Gentleman has brought to bear on this matter. I know of his anxiety. I believe that the points are acknowledged. I hope that he will see fit to withdraw the amendment, although I cannot give any assurance that we shall table an amendment in another place.
    Dr. Clark: I envisage a situation in which no difficulty will arise. It seems wrong that a temporary market can descend upon a local town or parish council area without prior notification. I accept the assurances given by the Minister. I hope that he will consider proposing an amendment in another place.
    I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Amendment made: No. 63 in page 33, line 30 at end add—
    '(2A) No notice is required under subsection (2) above if the proceeds of the temporary market are to be applied solely or principally for charitable, social, sporting or political purposes.'.—[Mr. Raison.]
    Mr. Campbell-Savours: I beg to move amendment No. 64 in page 33, line 44, leave out £500' and insert £1,000'.
    The Minister will recall the debate that took place in Committee when I referred to subsection (4) of the clause, which states:
    "A person who without giving the notice required by subsection (2) above holds a temporary market or permits Land occupied by him to be used as the site of a temporary market shall be guilty of an offence and liable on summary conviction to a fine not exceeding £500."
    In Committee, we tried to increase the fine to a level unacceptable to the Minister. At that time, he refered to the fact that the maximum fine in a magistrates court in relation to summary offences was £1,000. In the light of further discussions with representatives of the local authority associations—I am sure that representations have also been made direct to the Department—we felt that a
    480
    fine of £1,000 would be more suitable. I hope that the Minister will feel more disposed to accept the amendment on this occasion.
    2.45 am
    Mr. Macfarlane: I cannot fully accept the hon. Gentleman's request. First, I should say something about the basis upon which maximum fines for summary offences are fixed in legislation. First, there is the benchmark of £1,000 which is generally the maximum fine available to magistrates courts for any one offence. It must therefore be reserved for the most serious offences with which magistrates deal. Below £1,000, there are four maxima in common modern usage—£500, £200, £50 and £25. Each step is designed to enable Parliament to Signify a real difference in the comparable gravity of the offence to which it is allotted.
    The criteria employed to distinguish between one type of offence and another where it is at issue whether a maximum of £500 or £1,000 is provided are as follows. Offences at the £500 level are generally those arising from conduct which is liable to cause some significant damage directly or indirectly to the property or interests of others or of the community at large, conduct motivated by substantial financial reward or other unentitled benefit. Some serious regulatory offences also attract this maximum.
    Those at the £1,000 level are offences which are liable to cause substantial and direct damage to the property or interests of others or of the general community. Personal injury other than the most minor also carries this maximum, together with serious threats to public health, safety and institutions, serious environmental damage and a high level of illicit financial gain.
    Against the background of those criteria, the offence of failing to give notice in connection with the holding of a temporary market, which is not in itself an illicit activity, clearly falls within the range of offences subject to the maximum of £500. To provide the maximum financial penalty generally available to the magistrates courts would take the offence out of the perspective within which the summary offences should be considered.
    I hope that the hon. Gentleman will feel that that is a reasonable assessment of the current position and that in the light of that explanation he will feel able to seek to withdraw the amendment.
    Mr. Campbell-Savours: I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Amendments made: No. 65, in page 34, line 7 leave out from 'held' to 'or' in line 9 and insert
    `under a grant or presumed grant or an enactment or order'
    No. 66, in page 34, line 10, leave out from 'cleadstock' to end of line 13.—[Mr. Macfarlane.]

    Clause 28
    POWER OF LOCAL AUTHORITIES TO INSURE VOLUNTARY ASSISTANTS
    Mr. Macfarlane: I beg to move amendment No. 67, in page 35, line 29, after 'state', insert—
    "`local authority" includes a board reconstituted in pursuance of Schedule 17 to this Act;'.
    As boards reconstituted in pursuance of Schedule 17 to the Local Government Act 1972, the two planning boards

    481
    administer national park and planning functions in the respective areas of the national parks concerned but are not local authorities. That contrasts with the position obtaining in the other national parks where such functions are administered by committees of the local authorities concerned. The amendment will thus have the effect of putting the two boards on an equal footing with such authorities with regard to the exercise of powers under clause 28.
    A provision corresponding to clause 28 appears in the Cumbria Bill at present before Parliament, extending powers to the Lake District special planning board. Like amendment No. 69, the amendment extends particular powers in the Bill—in this case, those in clause 28—to the Lake District special planning board and the Peak Park joint planning board. Both boards requested such an extension and in considering the matter it was thought that they could do with the advantage of those powers.
    Amendment agreed to.

    New Schedule

    'SEX ESTABLISHMENTS

    Meaning of "sex establishment"

    1. In this Schedule "sex establishment" means a sex cinema or a sex shop.

    Meaning of "sex cinema"

    2.—(1) In this Schedule "sex cinema" means any premises, vehicle or stall used to a significant degree for the exhibition of moving pictures, by whatever means produced, which—

    (a) are concerned primarily with the portrayal of, or primarily deal with or relate to, or are intended to stimulate or encourage—

    (i) sexual activity; or

    (ii) acts of force, restraint, violence orcruelty which are associated with sexual activity: or

    (b) are concerned primarily, with the portrayal of, or primarily deal with or relate to, genital organs or urinary or excretary functions;

    but does not include a dwelling house to which the public is not admitted.

    (2) No premises shall be treated as a sex cinema by reason only—

    (a) if they are licensed under the Cinematograph Act 1909, of their use for a purpose for which a licence under that Act is required; or

    (b) of their use for an exempted exhibition as defined in section 5 of the Cinematograph Act 1952 (which relates to exemptions from the requirements of that Act for non-commercial organisations) by an exempted organisation within the meaning of section 5(4) of that Act.Meaning of "sex shop" and "sex article"

    3.—(1) In this Schedule "sex shop" means any premises, vehicle or stall used for a business which consists to a significant degree of selling, hiring, exchanging, lending, displaying or demonstrating—

    (a) sex articles; or

    (b) other things intended for use in connection with, or for the purpose of stimulating or encouraging—

    (i) sexual activity; or

    (ii) acts of force,restraint, violenceor cruelty which are associatedwith sexual activity.

    (2) No premises shall be treated as a sex shop by reason only of their use for the exhibition of moving pictures by whatever means produced.

    (3) In this Schedule "sex article" means—

    (a) anything made for use in connection with, or for the purpose of stimulating or encouraging—

    (i) sexual activity; or

    (ii) acts of force, restraint, violence or cruelty which are associated with sexual activity; and

    (b) anything to which sub-paragraph (4) below applies.

    (4) This sub-paragraph applies—

    (a) to any article containing or embodying matter to be read or looked at or anything intended to be used, either alone or as one of a set, for the reproduction or manufacture of any such article; and

    (b) to any recording of vision or sound, which—

    (i) is concerned primarily with the portrayal of, or primarily deals with or relates to, or is intended to stimulate or encourage, sexual activity or acts of force, restraint, violence or cruelty which are associated with sexual activity; or

  Clause 29

    LOST AND UNCOLLECTED PROPERTY
    Mr. Macfarlane: I beg to move amendment No. 68, in pafe 35, line 41 leave out
    'as defined in section 270(1) of the Local Government Act 1972'.
    Mr. Deputy Speaker: With this we are to take Government amendment No. 69.
    Mr. Macfarlane: These are minor amendments. Both involve boards reconstituted in pursuance of schedule 17 and the two planning boards administering national park and planning functions.
    Amendment agreed to.
    Amendment made: No. 69, in page 37, line 16 at end add—
    '"local authority" means—

    (a) a local authority as defined in section 270(1) of the Local Government Act 1972; and

    (b) a board reconstituted in pursuance of Schedule 17 to that Act;'.—[Mr. Macfarlane.]

    (ii) is concerned primarily with the portrayal of, or primarily deals with or relates to, genital organs, or urinary or excretory functions.

    Miscellaneous definitions

    (4) In this Schedule—

    "the appropriate authority" means, in relation to any area for which a resloution has been passed under section [Licensing of sex establishments] above, the local authority who passed it;

    "the chief officer of police", in relation to any locality, means the chief officer of police for the police area in which the locality is situated; and

    "the relevant locality" means—

    (i) in relation to any premises, the locality where they are situated; and

    (ii) in relation to a vehicle or stall, the locality in which it is or is to be situated when it is used as a sex establishment.Requirement for licences for sex establishments

    5.—(1) Subject to the provisions of this Schedule, no person shall in any area in which this Schedule is in force use any premises, vehicle or stall as a sex establishment except under and in accordance with the terms of a licence granted under this Schedule by the appropriate authority.

    (2) Sub-paragraph (1) above does not apply to the sale, supply or demonstration of articles which—

    (a) are manufactured for use primarily for the purposes of birth control; or

    (b) primarily relate to birth control.

    6.—(1) Any person who—

    (a) uses any premises, vehicle or stall for any business or other activity requiring a licence under this Schedule; or

    (b) proposes to do so, may apply to the appropriate authority for them to waive the requirement of a licence in respect of that business or activity.

    (2) An application under this paragraph may be made either as part of an application for a licence under this Schedule or without any such application.

    (3) An application under this paragraph shall be made in writing to the appropriate authority and shall contain the particulars specified in paragraph 9(2) to (6) below.

    (4) The appropriate authority may waive the requirement of a licence in any case where they consider that to require a licence would be unreasonable or inappropriate.

    (5) A waiver may be for such period as the appropriate authority think fit.

    (6) Where the appropriate authority grant an application for a waiver, they shall give the applicant for the waiver notice that they have granted his application.

    (7) The appropriate authority may at any time give a person who would require a licence but for a waiver notice that the waiver is to terminate on such date as may be specified in the notice.

    (8) The date to be specified in a notice under sub-paragraph (7) above shall be not less than 28 days from the date of service of the notice.

    Grant, renewal and transfer of licences for sex establishments

    7. Subject to paragraph 11(1) below, the appropriate authority may grant to any applicant, and from time to time renew, a licence under this Schedule for the use of any premises, vehicle or stall specified in it for a sex establishment on such terms and conditions and subject to such restrictions as may be so specified.

    8.—(1) Subject to paragraphs 10 and 22, below, any licence under this Schedule shall, unless previously cancelled under paragraph 15 or revoked under paragraph 16(1) below, remain in force for one year or for such shorter period specified in the licence as the appropriate authority may think fit.

    (2) Where a licence under this Schedule has been granted to any person, the appropriate authority may, if they think fit, transfer that licence to any other person on the application of that other person.

    9.—(1) An application for the grant, renewal or transfer of a licence under this Schedule shall be made in writing to the appropriate authority.

    (2) An application made otherwise than by or on behalf of a body corporate or an unincorporated body shall state—

    (a) the full name of the applicant;

    (b) his permanent address; and

    (c) his age.

    (3) An application made by a body corporate or an unincorporated body shall state—

    (a) the full name of the body;

    (b) the address of its registered or principal office; and

    (c) the full names and private addresses of the directors or other persons responsible for its management.

    (4) An application relating to premises shall state the full address of the premises.

    (5) An application relating to a vehicle or stall shall state the place where it is to be situated when it is used as a sex establishment.

    (6) Every application shall contain such particulars as the appropriate authority may reasonably require in addition to any particulars required under sub-paragraphs (2) to (5) above.

    (7) An applicant for the grant, renewal or transfer of a licence under this Schedule shall give public notice of the application, identifying the premises or specifying the place where the vehicle or stall is to be situated when it is used as a sex establishment, in such form as the appropriate authority may prescribe—

    (a) where the application is made in respect of premises, by displaying the notice on or near the premises in a place where it can conveniently be read by the public,

    for 21 days beginning with the date of the application; and

    (b) by advertising not later than 7 days after the date of the application in a local newspaper circulating in the relevant locality.

    (8) An applicant for the grant, renewal or transfer of a licence under this Schedule shall, not later than 7 days after the date of the application, give notice of the application identifying the premises or specifying the place where the vehicle or stall is to be situated when it is used as a sex establishment, to the chief officer of police in the relevant locality.

    (9) Any person objecting to an application for the grant, renewal or transfer of a licence under this Schedule shall give notice in writing of his objection to the appropriate authority, stating in general terms the grounds of the objection, not later than 28 days after the date of the application.

    (10) Where the appropriate authority receive notice of any objection under sub-paragraph (9) above the authority shall, before considering the application, give notice in writing of the general terms of the objection to the applicant.

    (11) The appropriate authority shall not, without the consent of the person making the objection, reveal his name or address to the applicant.

    (12) In considering any application for the grant, renewal or transfer of a licence the appropriate authority shall have regard to any observations submitted to them by the chief officer of police and any objections of which notice has been sent to them under subparagraph (9) above,

    (13) The appropriate authority shall give an opportunity of appearing before and of being heard by them—

    (a) before refusing to grant a licence, to the applicant;

    (b) before refusing to renew a licence, to the holder; and

    (c) before refusing to transfer a licence, to the holder and the person to whom he desires that it shall be transferred

    (14) Where the appropriate authority refuse to grant, renew or transfer a licence they shall, if required to do so by the applicant or holder of the licence, give him a statement in writing of the grounds upon which their decision was based within 7 days of the decision.

    10.—(1) Where, before the date of expiry of a licence, an application has been made for its renewal, it shall be deemed to remain in force notwithstanding that the date has passed until the withdrawal of the application or its determination by the appropriate authority.

    (2) Where, before the date of expiry of a licence, an application has been made for its transfer, it shall be deemed to remain in force with any necessary modifications until the withdrawal of the application or its determination notwithstanding that the date has passed or that the person to whom the licence is to be transferred if the application is granted is carrying on at premises, vehicle or stall in respect of which the licence was granted the functions to which it relates.

    Refusal of licences

    11.—(1) A licence under this Schedule shall not be granted—

    (a) to a person under the age of 18; or

    (b) to a person who is for the time being disqualified under paragraph 16(2) below; or

    (c) to a person, other than a body corporate, who is not resident in the United Kingdom or was not so resident throughout the period of six months immediately preceding the date when the application was made; or

    (d) to a body corporate which is not incorporated in the United Kingdom; or

    (e) to a person who has, within a period of 12 months immediately preceding the date when the application was made, been refused the grant or renewal of a licence for the premises, vehicle or stall in respect of which the application is made, unless the refusal has been reversed on appeal.

    (2) Subject to paragraph 22 below, the appropriate authority may refuse—

    (a) an application for the grant or renewal of a licence on one or more of the grounds specified in sub-paragraph (3) below;

    (b) an application for the transfer of a licence on either or both of the grounds specified in paragraphs (a) and (b) of that sub-paragraph.

    (3) The grounds mentioned in sub-paragraph (2) above are—

    (a) that the applicant is unsuitable to hold the licence by reason of having been convicted of an offence or for any other reason;

    (b) that if the licence were to be granted, renewed or transferred the business to which it relates would be managed by or carried on for the benefit of a person other than the applicant who would be refused the grant, renewal or transfer of such a licence if he made the application himself;

    (c) that the number of sex establishments in the relevant locality at the time the application is made is equal to or exceeds the number which the authority consider is appropriate for that locality;

    (d) that the grant or renewal of the licence would be inappropriate, having regard—

    (i) to the character of the relevant locality; or

    (ii) to the use to which any premises in the vicinity are put; or

    (iii) to the layout, character or condition of the premises, vehicle or stall in respect of which the application is made.

    Power to prescribe standard conditions

    12.—(1) Subject to the provisions of this Schedule, the appropriate authority may make regulations prescribing standard conditions applicable to licences for sex establishments, that is to say terms, conditions and restrictions on or subject to which licences under this Schedule are in general to be granted, renewed or transferred by them.

    (2) Regulations under sub-paragraph (1) above may make different provision—

    (a) for sex cinemas and sex shops; and

    (b) for different kinds of sex cinemas and sex shops.

    (3) Without prejudice to the generality of sub-paragraphs (1) and (2) above, regulations under this paragraph may prescribe conditions regulating—

    (a) the hours of opening and closing of sex establishments;

    (b) displays or advertisements on or in such establishments;

    (c) the age below which persons may not be admitted to or employed in or in connection with a sex establishment;

    (d) the visibility of the interior of sex establishments to passers by; and

    (e) any change of a sex cinema to a sex shop or a sex shop to a sex cinema.

    (4) Where the appropriate authority have made regulations under sub-paragraph (1) above, every such licence granted, renewed or transfered by them shall be presumed to have been so granted, renewed or transferred subject to any standard conditions applicable to it unless they have been expressly excluded or varied.

    (5) Where the appropriate authority have made regulations under sub-paragraph (1) above, they shall, if so requested by any person, supply him with a copy of the regulations on payment of such reasonable fee as the authority may determine.

    (6) In any legal proceedings the production of a copy of any regulations made by the appropriate authority under sub-paragraph (1) above purporting to, be certified as a true copy by an officer of the authority authorised to give a certificate for the purposes of this paragraph shall be prima facie evidence of such regulations, and no proof shall be required of the handwriting or official position or authority of any person giving such certificate.Copies of licences and standard conditions

    13.—(1) The holder of a licence under this Schedule shall keep exhibited in a suitable place to be specified in the licence a copy of the licence and of any regulations made under paragraph 12(1) above which prescribed standard conditions subject to which the licence is held.

    (2) The appropriate authority shall send a copy of any licence granted under this Schedule to the chief officer of police for the area where the sex establishment is situated.Transmission and cancellation of licences

    14. In the event of the death of the holder of a licence granted under this Schedule, that licence shall be deemed to have been granted to his personal representatives and shall, unless previously revoked, remain in force until the end of the period of 3 months beginning with the death and shall then expire; but the appropriate authority may from time to time, on the application of those representatives, extend or further extend the period of three months if the authority are satisfied that the extension is necessary for the purpose of winding up the deceased's estate and that no other circumstances make it undersirable.

    15. The appropriate authority may, at the written request of the holder of a licence, cancel the licence.Revocation of licences

    16.—(1) The appropriate authority may, after giving the holder of a licence under this Schedule an opportunity of appearing before and being heard by them, at any time revoke the licence—

    (a) on any groung specified in sub-paragraph (1) of paragraph 11 above; or

    (b) on either of the grounds specified in sub-paragraph (3)(a) and (b) of that paragraph.

    (2) Where a licence is revoked, its holder shall be disqualified from holding or obtaining a licence in the area of the relevant authority for a period of 12 months beginning with the date of revocation.Variation of licences

    17.—(1) The holder of a licence under this Schedule may at any time apply to the appropriate authority for any such variation of the terms, conditions or restrictions on or subject to which the licence is held as may be specified in the application.

    (2) The relevant authority—

    (a) may make the variations specified in the application; or

    (b) may make such variations as they think fit; or

    (c) may refuse the application.

    (3) The variations that an authority may make by virtue of sub-paragraph (2)(b) above include, without prejudice to the generality of that sub-paragraph, variations involving the imposition of terms, conditions or restrictions other than those specified in the application.Fees

    18. An applicant for the grant, renewal or transfer of a licence under this Schedule shall pay such reasonable fee in respect of the application as the appropriate authority may determine.Enforcement

    19.—(1) A person who—

    (a) knowingly uses, or knowingly causes or permits the use of any premises, vehicle or stall contrary to paragraph 5, above; or

    (b) being the holder of a licence under this Schedule, in the course of his business employs at the premises, vehicles or stall in respect of which the licence is held any person known to him to be for the time being disqualified from holding such a licence; or

    (c) being the holder of a licence under this Schedule, without reasonable excuse knowingly contravenes, or knowingly permits the contravention of, a term, condition or restriction specified in the licence; or

    (d) being the servant or agent of the holder of a licence under this Schedule, without reasonable excuse knowingly contravenes, or knowingly permits the contravention of, a term, condition or restriction specified in the licence; shall be guilty of an offence.

    (2) Any person who, in connection with an application for the grant, renewal or transfer of a licence under this Schedule, makes a false statement which he knows to be false in any material respect or which he does not believe to be true, shall be guilty of an offence.

    (3) A person guilty of an offence under sub-paragraph (1) or (2) above shall be liable on summary conviction to a fine not exceeding £5,000.

    (4) A person who being the holder of a licence under this Schedule fails without reasonable excuse to comply with paragraph 13(1) above shall be guilty of an offence and liable on summary conviction to a fine not exceeding £200.

    (5) Where an offence under this paragraph committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of the offence.

    (6) Where the affairs of a body corporate are managed by its members sub-paragraph (5) above shall apply to the acts and defaults of a member in connection with his function of management as if he were a director of a body corporate.

    20. If a constable has reasonable cause to suspect that a person has committed an offence under paragraph 19(1) above he may require him to give his name and address, and if that person refuses or fails to do so, or gives a name or address which the constable reasonable suspects to be false, the constable may arrest him without warrant.

    21.—(1) A constable or an authorised officer of a local authority may, at any reasonable time,—

    (a) enter any premises in the authority's area in respect of which a licence under this Schedule is for the time being in force; and

    (b) inspect any vehicle or stall in the authority's area in respect of which such a licence is for the time being in force, with a view to seeing—

    (i) whether the terms, conditions or restrictions on or subject to which the licence is held are complied with; and

    (ii) whether any person is being employed in the course of the business carried on at the premises, vehicle or stall who is for the time being disqualified from holding a licence under this Schedule.

    (2) Subject to sub-paragraph (3) below, a constable or an authorised officer of a local authority—

    (a) may enter any premises in the authority's area; and

    (b) may inspect any vehicle or stall in that area, if he has reason to suspect that an offence under paragraph 19 above has been, is being, or is about to be committed in relation to the premises, vehicle or stall.

    (3) No power conferred by sub-paragraph (2) above may be exercised by a constable or an authorised officer of a local authority unless he has been authorised to exercise it by a warrant granted by a justice of the peace.

    (4) Where an authorised officer of a local authority exercises any such power, he shall produce his authority if required to do so by the occupier of the premises or the person in charge of the vehicle or stall in relation to which the power is exercised.

    (5) Any person who without reasonable excuse refuses to permit a constable or an authorised officer of a local authority to exercise any such power shall be guilty of an offence and shall for every such refusal be liable on summary conviction to a fine not exceeding £200.Appeals

    22.—(1) Subject to sub-paragraph (2) below, any of the following persons, that is to say—

    (a) an applicant for the grant, renewal or transfer of a licence under this Schedule whose application is refused;

    (b) an applicant for the variation of the terms, conditions or restrictions on or subject to which any such licence is held whose application is refused;

    (c) a holder of any such licence who is aggrieved by any term, condition or restriction on or subject to which the licence is held; or

    (d) a holder of any such licence whose licence is revoked, may at any time before the expiration of the period of 21 days beginning with the relevant date appeal to the magistrates'court acting for the petty sessions area in which—

    (i) the premises in respect of which the application is made are situated; or

    (ii) the vehicle or stall in respect of which the application is made is or is to be situated when it is used as a sex establishment.

    (2) An applicant whose application for the grant or renewal of a licence is refused, or whose licence is revoked, on any ground specified in paragraph 11(1) above shall not have a right to appeal under this paragraph unless the applicant seeks to show that the ground did not apply to him.

    (3) In this paragraph "the relevant date" means the date on which the person in question is notified of the refusal of his application, the imposition of the term, condition or restriction by which he is aggrieved or the revocation of his licence, as the case may be.

    (4) An appeal against the decision of a magistrates' court under this paragraph may be brought to the Crown Court.

    (5) Where an appeal is brought to the Crown Court under sub-paragraph (4) above, the decision of the Crown Court shall be final; and accordingly in section 28(2)(b) of the Supreme Court Act 1981 for the words "or the Gaming Act 1968" there shall be substituted the words ", the Gaming Act 1968 or the Local Government (Miscellaneous Provisions) Act 1982".

    (6) On an appeal to the magistrates' court or the Crown Court under this paragraph the court may make such order as it thinks fit.

    (7) Subject to sub-paragraphs (8) to (11) below, it shall be the duty of the appropriate authority to give effect to an order of the magistrates' court or the Crown Court.

    (8) The appropriate authority need not give effect to the order of the magistrates' court until the time for bringing an appeal under sub-paragraph (4) above has expired and, if such an appeal is duly brought, until the determination or abandonment of the appeal.

    (9) Where a licence is revoked or an application for the renewal of a licence is refused, the licence shall be deemed to remain in force—

    (a) until the time for bringing an appeal under this paragraph has expired and, if such an appeal is duly brought, until the determination or abandonment of the appeal; and

    (b) where an appeal relating to the refusal of an application for such a renewal is successful and no further appeal is available, until the licence is renewed by the appropriate authority.

    (10) Where—

    (a) the holder of a licence makes an application under paragraph 17 above; and

    (b) the appropriate authority impose any term, condition or restriction other than one specified in the application, the licence shall be deemed to be free of it until the time for bringing an appeal under this paragraph has expired.

    (11) Where an appeal is brought under this paragraph against the imposition of any such term, condition or restriction, the licence shall be deemed to be free of it until the determination or abandonment of the appeal.provisions relating to existing premises

    23.—(1) Without prejudice to any other enactment it shall be lawful for any person who—

    (a) immediately before the appointed day was using any premises, vehicle or stall as a sex establishment; and

    (b) had before that day duly applied to the appropriate authority for a licence for the premises, vehicle or stall under this Schedule, to continue to use the premises, vehicle or stall as a sex establishment until the determination of his application.

    (2) In this paragraph and paragraph 24 below "the appointed day", in relation to any area, means the day specified in the resolution passed under section [Licensing of sex establishments] above as the date upon which this Schedule is to come into force in that area.

    24.— (1) This paragraph applies to an application for the grant of a licence under this Schedule made before the appointed day.

    (2) A local authority shall not consider any application to which this paragraph applies before the appointed day.

    (3) A local authority shall not grant any application to which this paragraph applies until they have considered all such applications.

    (4) In considering which of several applications to which this paragraph applies should be granted a local authority shall give preference over other applicants to any applicant who satisfies them—

    (a) that he is using the premises, vehicle or stall to which the application relates as a sex establishment; and

    (b) that some person was using the premises, vehicle or stall as a sex establishment on 22nd December 1981; and

    (c) that—

    (i) he is that person; or

    (ii) he is a successor of that person in the business or activity which was being carried on there on that date.Saving for criminal law

    25. Nothing in this Schedule—

    (a) shall afford a defence to a charge in respect of any offence at common law or under an enactment other than this Schedule; or

    (b) shall be taken into account in any way at a trial for such an offence.— '.[Mr.Raison.]

    Brought up, read the First and Second time, and added to the Bill. —[Mr. Raison.]

    Schedule 1
    LICENSING OF PUBLIC ENTERTAINMENTS
    Mr. Campbell-Savours: I beg to move amendment No. 71, in page 39, line 20, leave out from '1961' to end of line 22.
    Mr. Deputy Speaker: With this we may discuss amendment No. 72, in page 39, line 41, leave out from '1961' to end of line 44.
    Mr. Campbell-Savours: Schedule 1, as it stands, Excludes from public entertainment licensing arrangements
    "entertainment which takes place wholly or mainly in the open air."
    The purpose of my amendment is to provide a uniform system of licensing for outside entertainment that has been excluded from the Bill. Additionally, the Bill excludes

    493
    places of public worship and pleasure fairs, along with outside entertainment, yet a scheme exists in legislation in London whereby the object of my amendment applies.
    In 1977 Baroness Stedman, in a report, concluded that pop festivals were not susceptible to a licensing system, although changes were proposed. The problems that exist for local authorities when outside entertainment takes place includes maintaining an adequate level of hygiene, adequate traffic control and policing arrangements and control of the level of nuisance to the neighbourhoods in the immediate vicinities of pop festivals. That is what the amendment tries to deal with. There are also problems of litter, which cannot be controlled while a pop festival is taking place, and that places on local authorities obligations that they have found difficult to carry out especially in the present climate of financial constraint.
    I hope that the Minister will accept the need to include pop festivals. Some exclusions have already been allowed, and it should be possible to include outside entertainment, thereby clearly defining the intention of Parliament to include pop festivals.
    I am sure that the right hon. Gentleman has received a number of representations from local authorities. I am told that South Yorkshire, Greater Manchester, Cheshire and Kent have local legislation and are able to restrain and restrict outside entertainment in the way that my amendment suggests. That should be an example to the hon. Gentleman and his Department in whatever consideration they may give to this matter. I hope that the Minister will see fit to accept the amendment.
    Dr. Summerskill: Amendment No. 72 covers the same ground as the amendment of my hon. Friend the Member for Workington (Mr. Campbell-Savours). At the end of our discussion in Committee the Minister said that he would look at this again in view of the feeling that existed.
    He wrote to me on 22 January informing me that he would not be producing an amendment on Report, but added:
    "We are seeking a mutually acceptable solution with the local authority associations".
    I understand that on 29 January the Association of Metropolitan Authorities, the Association of District Councils and the Association of County Councils went to the Home Office for a meeting on this subject and urged the Minister to include public music and dancing in the open air in the licensing scheme.
    I have carefully read the speech that the Minister made in Committee and I accept the civil liberties argument that village fetes and political rallies and marches would be covered if any music in the open air were included in the licensing scheme.
    The Minister's second argument in Committee was based on the difficulty of enforcement. That argument is not valid in respect of the GLC, which is carrying out enforcement. The right hon. Gentleman's civil liberties argument has some weight, but I suggest that the Bill should deal with pop festivals. That was the burden of the remarks of my hon. Friend the Member for Workington and it is the argument of the local authority associations. Several authorities already have powers to license these festivals, but under the Bill as it stands those powers will be lost. That is ridiculous. As we observed in Committee, it takes a great deal of money and time for a local authority
    494
    to obtain these powers. I ask the Minister carefully to consider making an alteration to the Bill to include open air pop festivals within the licensing scheme.
    Mr. Bruce George: I approach this issue with some ambivalence. I neither support the clause as it stands nor support the amendments in their entirety. I compliment the Government on introducing legislation fairly swiftly in this area. Over the past few years there has been much concern about pop festivals that take place in theatres.
    I first raised the issue of safety and security at pop concerts in an Adjournment debate in 1977. Many concerts were taking place in inadequate theatres. There were many instances of risk and death. Considerable risk was attendant upon those at the concerts.
    I ask for the Minister's indulgence, because I was not a member of the Committee that considered the Bill. I do so because I wish to ask him several questions. First, what will be the criteria for a local authority, police force or fire service in considering whether to grant a licence to enable a pop concert to take place in a theatre? Will it take into account public health considerations—for example, the number of toilets in relation to the number of people who will use those facilities, noise levels and security arrangements? Much concern has been expressed about the inadequacy of security arrangements for pop concerts, discos and dances, where people purport to be competent in acting as attendants, when they are grossly inadequate. They may create a crisis within a concert by their rough handling of clients, including young people. About two years ago the Daily Mail reported that there were 20 deaths in 1979 as a result of violence at pop concerts. I endorse the Minister's perspective of not extending licensing arrangements to outdoor events, although I strongly support the licensing of indoor concerts.
    What will be the position when concerts take place in partially enclosed areas such as football grounds? Three or four years ago there was a concert at Charlton Athletic football ground, at which the attendance was considerably in excess of what the promoters admitted, and there was a court action afterwards. Would such an event come within the scope of the original proposal? Is it an indoor or an outdoor event? Would licensing apply to concerts in football grounds?
    3 am
    Does my hon. Friend the Member for Halifax (Dr. Summerskill) recognise that the amendments pose civil liberties problems?
    Dr. Summerskill indicated assent.
    Mr. George: I am glad that that has been recognised. I have been in touch with the National Council for Civil Liberties, and it is worried that many types of events may be caught in the orbit of the amendment. Music is now increasingly played at political events. The organisers hire folk groups, pop groups or bands of one kind or another. I hope that the Minister has thought about this problem. If so, perhaps he will suggest ways of meeting the amendments and give his view on the matter.
    The point about enforcement is valid. We must distinguish between the lavish pop concert outdoors, organised on a commercial basis, which attracts thousands of people, and the more modest kind of enterprise, which emerges almost spontaneously, for which it would be

    495
    difficult to get any form of accountability from the people organising it. However, there must be some form of licensing.
    I support the amendments. I look forward to the Minister's response. I hope that this grey area between the original proposals and the amendments will be explored, if not here, in another place.
    Mr. R. C Mitchell: I did not serve on the Committee on the Bill, and I have not read in detail the report of the proceedings, but the hon. Member for Halifax (Dr. Summerskill) raised a serious matter. Am I right in saying that not only does the Bill not provide for licensing for pop concerts, but, where a local authority has obtained the power to license through a Private Bill, this Bill will supersede any such measure and the powers will automatically fall? If so, it is a serious matter. Is it not possible to have an amendment which would allow authorities which have obtained these powers through the Private Bill procedure to retain them?
    Mr. Raison: Broadly speaking, it is true that the powers obtained by local authorities will lapse with the passing of the Bill. That is one of the factors that we have had to consider. The Government do not necessarily agree that, because local authorities have obtained these powers through Private Bills, they should remain unaffected by subsequent legislation.
    We are aware of the complexity of the problem. Attempts are being made, in conjunction with the local authority associations, to try to find the right answer. I am sure that those efforts will continue, but so far we have been unable to solve these tricky problems.
    I shall try to pick up, perhaps in correspondence, the points made by the hon. Member for Walsall, South (Mr. George). I must say that the hon. Gentleman seemed to be under a misapprehension about what is going on. We are not introducing measures to control pop festivals. An amendment has been put forward from the Opposition Benches, but there is no Government scheme. The hon. Gentleman appeared to be asking for the ingredients of the Government scheme, but since we do not have a scheme it is difficult for me to answer his points.
    On the main point of the debate, the Government have never denied the problems caused by pop festivals or called into question local authorities' right to try to take action to lessen them. What we have grave doubts about as a basis for national legislation is the method embodied in this amendment of using a licensing system, and one, moreover, that would cover any and every public entertainment, however innocuous, which took place in the open air.
    The difference between the power exercised by the GLC and those which will be available elsewhere can be justified quite simply. Any pop festival held in London will be in the middle of an urban area and will disturb hundreds or even thousands of people. It will also take place in a well-defined and relatively small open space. It cannot move into the next field or on to an adjacent property. Not only is the need for strict control undeniable, but there are few, if any, problems of enforcement. All the evidence points to a different conclusion outside the capital.
    As I have said, we accept that pop festivals cause problems. The main problems, however, seem to be caused by unlicensed or informal festivals, and we are far
    496
    from convinced that a licensing system would catch the organisers of such festivals, who seem to prefer to be elusive. The local authorities disagree with this point completely, arguing that organisers can always be found where there are thousands of pounds' worth of equipment. Whether they can be found in time to apply the licensing conditions is another question.
    Our second objection is a legal one. We have consistently felt that it would be very difficult to distinguish between pop festivals and other open air musical events, and whatever the merits of controls over pop festivals, no valid arguments have been put forward to control the mass of other outdoor entertainments that take place. The local authority associations acknowlege that they do not want to control them, but have not so far put forward any proposals for controls relating to pop festivals only.
    The difficulty of distinguishing between pop festivals and other outdoor events is now being enhanced by a new development. Political rallies now commonly devote considerable amounts of time to music so that, for instance, a CND rally may be entertained by several rock bands between speeches. Possibly the music will predominate and undoubtedly larger crowds will be attracted if there is the prospect of free entertainment. Local authorities say—and I accept what they say completely—that they would never use their licensing powers to prohibit a rally on political grounds. Any restrictive action they took, however, would be seen by those of a different political leaning as evidence of bias.
    To give them blanket powers, in effect, to prohibit political rallies would be unacceptable; to insert into licensing power an exemption for political rallies would invalidate that power from the start, because organisers would make sure they had a political link, however tenuous. The last development seems to me a particularly cogent reason for leaving pop festivals alone.
    As the hon. Member for Halifax (Dr. Summerskill) said, there was a recent meeting between officials in my Department and representatives of the GLC and the local authority associations, but so far it has not brought us any futher forward. The local authority interests have made it plain that they are interested only in ensuring proper control of and proper facilities at pop festivals.
    These amendments do not achieve that purpose, and I therefore hope that they will not be pressed. I recognise that there is a problem here. If the local authorities come forward with any proposals that will meet the problem of how to control pop festivals without interfering or controlling other activities, and if we can find a way round the political point that I have just ventilated, we shall listen sympathetically. So far, however, we have not found an acceptable answer and I therefore cannot advise the House to accept the amendments.
    Mr. R. C. Mitchell: May I ask the Minister why it is necessary to take away the powers that local authorities have already gained? Why cannot he make some arrangement to enable the authorities to retain their powers until such time as he produces his alternative legislation?
    Mr. Raison: The answer is related to the particular nature of this kind of legislation. That is the way in which the provisions work. I understand the hon. Gentleman' s point and I will, without any commitment, have further

    497
    inquiries made on the point, but I think that there are practical and technical difficulties that are difficult to overcome.
    Mr. Campbell-Savours: The Minister could have been a little more positive. I was not altogether expecting him to accept my amendment. I tabled it as a probe to ascertain the Government's thinking.
    Do the Government fully understand that local authorities have no law with which to deal with pop festivals? Pop festivals are completely unrestricted activities, yet for many local authorities they are a major problem. For those authorities there is an urgent need for some legislation to give them the powers that they need.
    Many local authorities thought that this would be the Bill by which to do it. The Minister says that if they can prove at some time in the future that they have something viable he will consider introducing it, but in what legislation could it be introduced? As I understand the position, it can be done only in the form of a miscellaneous provisions Bill of this nature.
    Perhaps before the Bill gets to the other place the Minister will have consultations and try to find an urgent solution. Local authorities are looking to us to take a decision.
    Mr. Raison: With the leave of the House, may I tell the hon. Gentleman that I am not ruling out the possibility that there might be further attempts to deal with the problem in another place. But, as I have had to say once or twice during the debates today, it is not enough just to have a sentiment and a desire to do something. It has to be the right and wise thing to do. That is the problem that has so far defeated us.
    Mr. Campbell-Savours: I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Amendment made, No. 73, in page 40, line 9, leave out 15(4)' and insert 15 —[Raison. ]
    Mr. Campbell-Savours: I beg to move amendment No. 74, in page 40, line 24, at end insert
    'Provided that 14 day's notice of intention shall be given in respect of any application for an occasional licence in accordance with paragraphs 1(5) or 2(5) above.'
    Mr. Deputy Speaker: With this it will be convenient to take amendment No. 75, in page 40, leave out lines 30 to 36 and insert—

    '(3) An applicant for the grant renewal or transfer of an entertainments licence shall furnish such particulars and plans as the appropriate authority may by regulation prescribe and give the following public notices of the application

    (a) by displaying a notice in a conspicuous position on or near the relevant premises for 14 days beginning with the date of the application: and

    (b) except in the case of application for the renewal of a licence, by advertisment in a newspaper circulating in the area of the appropriate authority published not later than 7 days from the date of the application in such form as the appropriate authority may by regulation prescribe.

    (4) In considering any application for the grant, renewal or transfer of an entertainments licence, the appropriate authority shall have regard to any objection made against the application of which notice has, not later than 28 days after the date of the application, been sent to the appropriate authority and to the applicant, stating in general terms the grounds of the objection.

    (4) In considering any application for the grant, renewal or transfer of an entertainments licence, the appropriate authority shall have regard to any objection made against the application of which notice has, not later than 28 days after the date of the application, been sent to the appropriate authority and to the applicant, stating in general terms the grounds of the objection.

    (5) Before refusing any application for the grant renewal or transfer of an entertainments licence the appropriate authority shall give to the applicant an opportunity of appearing before and
    498
    of being heard by a committee or sub-committee of the appropriate authority and, if so required by him, the appropriate authority shall, within seven days after their decision, give him notice thereof containing a statement of the grounds upon which it was based. '.

    Mr. Campbell-Savours: The amendment deals with the licensing of public entertainment. Where occasional licences are being sought, 28 days' notice is required by the local authority, the police and the fire authority.
    Paragraph 1(5) gives the local authority power to grant occasional licences for music and dancing. Paragraph 2(5) gives local authorities power to grant occasional licences for boxing and wrestling.
    The amendment qualifies those paragraphs by reducing the time notice from 28 days to 14 days. I hope that the Minister will concede it, as I am told that it already applies in London. Perhaps in his reply he will comment on that.
    With regard to amendment No. 75, paragraph 1(3) of the schedule relates to the rights of applicants for and objectors to licences for entertainment.
    I now consider sub-paragraph (3)(b) of my proposed new wording to be no longer relevant—indeed, perhaps dangerous—in the sense that it would place a requirement on applicants to advertise and perhaps enter into an expenditure which by statute they should not be required to undertake. Therefore, in part my amendment is not satisfactory.
    Paragraph 4(4) says:
    "In considering any application for the grant, renewal or transfer of an entertainments licence, the appropriate authority shall have regard to any observations submitted to them by the chief officer of police and by the fire authority."
    Sub-paragraph (4) of my amendment requires that attention be paid to any objection by a member of the public to the allocation of a licence. Sub-paragraph (5) ensures that the applicant for the entertainment licence has the right to present his case and is given written notice of the decisions taken by the local authority. I hope that the right hon. Gentleman will see fit, if not to accept the amendment, to comment on it. I am sure that he will not accept it because of what I have said about sub-paragraph (3) (b).
    3.15 am
    Mr. Raison: The spirit of the amendment is already contained in paragraph 4(2) of schedule 1. I accept that there may be times when applicants for an occasional licence will be unable to comply with a 28 days' noticerequirement through no fault of their own. In such cases a local authority may be willing and able to dispense with the requirement, and paragraph 4(2) enables the authority to do so. No minimum notice is prescribed in the waiver and I do not think there should be one. The various authorities involved may need more than 14 days to carry out inspections of the premises and to report on them, and they should not be rushed into a decision when public safety is involved. If they need less than 14 days, they are quite free to grant a license at shorter notice. I am sure that it is in the best interests of licensing authority and applicant alike that the authority's discretion should be unfettered and I hope the hon. Gentleman will withdraw his amendment. In London 14 days' notice is required. A general waiver of the 28 days' notice was recommended, which we have adopted.
    The Government do not object in principle to the contents of amendment No. 75. It is perfectly reasonable for people living in the neighbourhood of premises for

    499
    which an entertainments licence is sought to be given an opportunity to object to the proposed licensing or the applicant. But schedule 1 already makes it possible for them to be given this opportunity. Paragraph 4(3) provides the licensing authority with power to make regulations prescribing the particulars which the applicant for the grant, renewal or transfer of a licence must furnish and the notices that he shall give. The authority is free to make regulations on the lines of the amendments proposed. I do not believe that we would be justified in imposing an extra bureaucratic procedure upon the licensing authority, and I hope that the hon. Member will withdraw his amendment.
    Mr. Campbell-Savours: I beg to ask leave to withdraw the amendment.
    Amendment by leave, withdrawn.
    Dr. Summerskill: I beg to move amendment No. 76, in page 40, line 42, leave out 'or (b)' and insert
    `and shall remit the whole or any part of such fee where in the opinion of the authority the entertainment in question—'.
    The amendment has been recommended to me by a charities organisation, which has concluded that this part of the Bill is based on schedule 12 to the London Government Act 1963. In that Act the exemption from the fee for charitable or other like purposes is mandatory and not discretionary as in the Bill.
    The organisation suggests that, because of the difficulties being faced by charities—both in raising money and in keeping the money that they raise, as costs are so high—the word "may" should be substituted by "shall". The provision, would be in ine with schedule 12 to the London Government Act 1963.
    Mr. Raison: The Government gave careful thought to a departure from the model of the London Government Act 1963. We realise that some educational and charitable organisations might lose a considerable proportion of their profits through having to pay a licence fee. I am sure that licensing authorities are as aware of that fact as we are, and I hope and expect that they will exercise their discretion to waive all or part of the fee in the proper spirit, but I see no reason why the licensing authority and, through it, the ratepayers should be forced to subsidise the wealthier chaities, particularly when the licence fee may be a tiny fraction of the cost of the entertainment.
    The amendment is defective, because is imposes an obligation on the licensing authority to remit the whole or any part of the fee. That would be met if the authority remitted merely a trivial amount. As the amendment is not likely to perform the function intended by the hon. Lady, I invite her to withdraw it.
    Dr. Summerskill: I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Mr. Pitt: I beg to move amendment No. 77, in page 43, line 10 at end insert
    'if authorised to do so by a warrant granted by a justice of the peace'.
    Under existing law the police are able to enter licensed premises to inspect for compliance with conditions attaching to the licence without first obtaining a magistrates' warrant. I believe that the Bill would perpetuate that position.
    There is a widespread view among a number of minority groups that certain clubs are the subject of
    500
    excessive attention by the police, going well beyond what would be required by routine licensing inspections. That appears to involve a degree of harassment, including, for example, the relative frequency of inspections for infringements of licensing conditions, the disproportionate number of officers sometimes involved and the recording in some instances of the names and addresses of all those in a club during an inspection. It may be that such views are held by more groups than I have been informed of.
    Such abuses could be discouraged if the police were required to obtain a warrant from a magistrate before entering licensed premises to check for compliance with the conditions attaching to a licence. The Bill specifies the need for a warrant when unlicensed premises are being checked to see whether an entertainment for which a licence is required is taking place. It seems logical that the principle should apply to licensed premises. I shall be glad if the Minister accepts the amendment, but I certainly hope that he will comment on it and perhaps consider discussing the matter further in another place.
    Mr. John G. Blackburn: I am not so much surprised as astonished by the amendment. It would create tremendous problems. Police officers have a vital role in visiting places of entertainment—without a warrant—particularly in view of the potential danger to young people in such places, quite apart from the possibility of offences being committed against legislation passed by the House. I oppose the amendment with all the power at my command. It would take us down a dangerous path.
    The schedule refers to:
    "An authorised officer of the fire authority".
    I was pleased to hear the comments of the hon. Members for Workington (Mr. Campbell-Savours) and for Walsall, South (Mr. George) on the pop festivals amendment. The idea of a fire officer having to get a warrant to check whether premises are complying with fire regulations is absurd. The attack made by the hon. Member for Croydon„ North-West (Mr. Pitt) on the police force was totally unwarranted. It should instead be given a vote of confidence.
    Mr. Raison: I am afraid that the Government cannot accept this amendment, although my hon. Friend the Member for Dudley, West (Mr. Blackburn) made some crisp and pertinent points on it. I cannot see any reason for providing that a constable or authorised officer should have to obtain a warrant before having the right to enier a licensed premises where public entertainment is being or about to be given for the purposes stated in paragraph 12(1). After all, no questions of privacy can arise and to obtain a warrant would be a meaningless formality, since it is hard to conceive the grounds on which an application could be refused. That is wholly different when an offence is suspected and the question of entry to what might be a private home arises. However, of course, in these circumstances, paragraph 12(3) makes it clear that a warrant is required.
    The essence is that a warrant is required when one is breaking into someone's privacy. These are not, in any meaningless sense, private, so I believe that this provision is wrong.
    Mr. Pitt: I am saddened to hear what the right hon. Gentleman says. No slur was intended on the police, nor, I hope, was one implied. I have good reason to believe that

    501
    the police do an excellent job. However, there is considerable evidence from many bodies that there is some police harassment as they see it; there is no specific evidence of that.
    It would be sensible and just to avoid these accusations if nothing else, if the police obtained warrants to enter these premises which, after all, are clubs. However, in the circumstances—having seen certain information—I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Mr. Raison: On a point of order, Mr. Deputy Speaker. Are we taking amendment No. 78 on its own or is it proposed to carry out a further grouping?
    Mr. Deputy Speaker (Mr. Bernard Weatherill)My Amendment Paper gives No. 78 on its own.
    Mr. Raison: I beg to move amendment No. 78, in page
    44, line 24, leave out
    'by the licensing authority'.
    This is a drafting amendment designed to remove an unnecessary reference to the licensing authorities; it is purely technical.
    Mr. Deputy Speaker: I now understand what the right hon. Gentleman had in mind. We cannot do that at this moment.
    Mr. Raison: I beg to move amendment No. 79, in page 44, line 37, leave out `(8)' and insert `(9)'.
    Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 80 and 81.
    Mr. Raison: Again, these are purely drafting amendments.
    Amendment agreed to.
    Amendments made: No. 80, in page 45, line 16, leave out from second 'be' to end of line 17 and insert 'free of it'.
    No. 81, in page 45, line 19, leave out from 'expired' to 'until' in line 22 and insert—
    (9) Where an appeal is brought under this paragraph against the imposition of any such term, condition or restriction, the licence shall be deemed to be free of the term, condition or restriction'.— [Mr. Raison.]

    Schedule 3
    STREET TRADING
    Amendment made: No. 82, in page 48, line 29, leave out from "held" to end of line 31 and insert
    "under a grant or presumed grant or an enactment or order".—[Mr. Raison.]
    Mr. Raison: I beg to move amendment No. 83, in page 48, line 36, leave out from "trading" to end of line 46 and insert
    "which—

    (i) is carried on at premises used as a petrol filling station; or

    (ii) is carried on at premises used as a shop or in a street adjoining premises so used and as part of the business of the shop;".

    The purpose of this amendment is twofold. First, it enables a shopkeeper to place wares which are part of his business as a shop on the street immediately adjoining the premises without finding himself subject to street trading
    502
    controls. Secondly, it removes from subparagraph (e) references to planning legislation which is separate from street trading and irrelevant to it.
    Mr. Gary Waller: I have some slight worries about the wording of this amendment. However, I welcome the fact that schedule 3 is intended to extend the power of control or prohibition of unauthorised trading to motorway service stations.
    The practice of unauthorised trading on motorway service stations is growing and causes not only annoyance to motorists but also commercial damage to the operators who pay the Government a great deal of money for the privilege of selling petrol, food and other goods on them.
    The unauthorised trading occurs not only at the Hartshead Moor motorway service station, but at many others throughout the country, especially in the period before Christmas. Because the itinerant traders generally disappear quickly when challenged, it is usually impossible to contemplate civil action of any sort. I have corresponded with my hon. and learned Friend the Under-Secretary of State for Transport and with my right hon. Friend the Minister of State, Home Office about this matter and I am delighted that action has been taken promptly.
    I am slightly worried about the wording of the amendment, because its effect is to exempt trading "carried on at premises used as a petrol filling station." Although unauthorised trading does not generally take place in the service area where the pumps are situated, it might be argued that the whole premises are exempt from the effect of the schedule. Therefore, I hope that the schedule will, if necessary, be reconsidered before enactment to ensure that our intentions are not frustrated.
    3.30 am
    Mr. Campbell-Savours: I do not want to split a hair on this issue, nor do I wish to appear petty, but there is a problem. If people hired external companies to come on to motorway service stations to tow vehicles away—as often happens, because of the high cost of hiring towing vehicles from motorway services stations—would those companies be infringing the schedule, because they go on to the service station to practice their trade? If so, that will upset many people, including me.
    Mr. Raison: I am stumped by the last point made by the hon. Member for Workington (Mr. Campbell-Savours). We will investigate the matter and write to him.
    Just because there is a petrol filling station on one part of a motorway service area does not make the whole service area a petrol filling station within the meaning of amendment No. 83. The exemption for trading on premises used as a petrol filling station applies only to trading within the perimeter of the filling station. I hope that that information is of some help to my hon. Friend the Member for Brighouse and Spenborough (Mr. Waller).
    Amendment agreed to.
    Mr. Raison: I beg to move amendment No. 84, in page 49, line 1 leave out from 'sale' to end of line 6 and insert `as a roundsman'.
    Mr. Deputy Speaker: With this, it is convenient to take amendment No. 85, in page 49, line 4, after `occupiers', insert 'or occupants'.
    Mr. Raison: On looking again at the exemption from street trading control granted by paragraph 1(2) (f), we

    503
    decided that it was unnecessarily complex. The amendment merely seeks to simplify it by making clear our original intention that the exemption should extend to roundsmen.
    Dr. Summerskill: I was waiting to hear the Minister read out the reply to my amendment, which he is desperately looking for. In view of what he has said, I shall let him off reading it, unless he has found it.
    Mr. Raison: I am not sure how to respond to that act of extraordinary gallantry. The Government amendment makes it clear that the exemption from the street trading controls applies to roundsmen who are free to deliver goods to anyone on the premises, whether they are occupiers of occupants. Amendment No. 85 is, therefore, unnecessary.
    Dr. Summerskill: I was just about to say that.
    Amendment agreed to.
    Mr. Raison: I beg to move amendment No. 86, in page 55, line 9 leave out 'that existing licence' and insert 'it'.
    Mr. Deputy Speaker: With this, it will be convenient to take Government amendment No. 87.
    Mr. Raison: Both of the amendments are purely drafting amendments.
    Amendment agreed to.
    Amendment made: No. 87, in page 56, line 18 leave out
    `its holder may trade in accordance with, and insert 'the holder of the street trading consent may trade by virtue of'.— [Mr. Raison. ]
    Mr. Deputy Speaker: All the other amendments are Government amendments. With the leave of the House, I shall put them all together.

    Schedule 4
    HIGHWAY AMENITIES
    Amendments made: No. 88, in page 59, line 17, at end add—
    '(3A) In this Part of this Act "frontagers" means the owners and occupiers of any premises adjoining the part of a highway on, in or over which an object or structure would be placed or on which facilities for recreation or refreshment or both have been, are being or would be provided; but frontagers have an interest under this Part of this Act only in proposals to place objects or structures or provide or operate facilities wholly or partly between their premises and the centre of the highway.'.
    No. 89, in page 60, line 9, leave out from second 'the' to end of line 13 and insert 'frontagers with an interest—

    (i) to the placing of the object or structure;'.

    No. 90, in page 60, line 34, leave out from 'the' to end of line 37 and insert 'frontagers with an interest—

    (i) to the placing of the object or structure;'.

    No. 91, in page 61, line 3, leave out from second 'the' to end of line 5 and insert 'frontagers with an interestmdash;
    No. 92, in page 61, line 29, after 'undertakers' insert `or sewerage authorities'.
    No. 93 in page 61, line 36, after '115B(1)', insert `to (3)'.
    No. 94, in page 61, line 40, leave out from beginning to 'of in line 42 and insert—

    '(i) for a purpose which will result in the production of income;

    (ii) for the purpose of providing a centre for advice or information; or

    (iii) for the purpose'.

    No. 95, in page 62, line 3, leave out from second 'the to end of line 7 and insert—
    ' frontagers with an interest—
    (i) to the placing of the object or structure;'.
    No. 96, in page 62, line 15, leave out from 'the' to end of line 18 and insert 'frontagers with an interest'.
    No. 97, in page 62, line 37, leave out from beginning to 'their' in line 43 and insert—

    '(a) in relation to permission to use an object or structure provided by a council, the aggregate—

    (i) of the cost of providing it; and

    (ii) of such charges as will reimburse the council their reasonable expenses in connection with granting the permission;

    (b) in relation to permission to operate facilities provided by a council for recreation or refreshment or both, the aggregate—

    (i) of the cost of providing them; and

    (ii) of such charges as will reimburse the council their reasonable expenses in connection with granting the permission; and

    (c) in any other case, such charges as will reimburse the council'

    No. 98, in page 63, line 38, leave out subsection (2)' and insert subsections (2) and (3)'.
    No. 99, in page 64, line 8, leave out '(a)'.
    No. 100, in page 64, line 9, leave out from 'London' to end of line 11.
    No. 101, in page 64, line 14, after 'authority', insert—
    'and the local planning authority'.
    No. 102, in page 64, line 16, leave out subsection (3) and insert— '(3) Where—

    (a) a highway to which this Part of this Act applies is situated outside Greater London; and

    (b) there is no pedestrian planning order in force in relation to it,

    subsection (1) above shall have effect in relation to the highway as if the requirement to consult the highway authority were a requirement to obtain their consent to the exercise of the power or the granting of the permission.'.

    Schedule 5
    MINOR AMENDMENTS
    Amendments made: No. 103, in page 65, line 33, at end insert—

    '2A. In section 160(3) of that Act (which provides in certain cases for the recovery of a sum in respect of disinfecting a public conveyance) for the words "in a summary manner" there shall be substituted the words "summarily as a civil debt".

    2B. In section 267 of that Act (application to ships and bows of certain provisions of Act), in paragraph (a) of subsection (3), after the words "county, of the" there shall be inserted the words "port health authority or"; and at the end of that section there shall be added the following subsection:—

    "(6) In determining for the purposes of subsection (1) above, what provisions of this Act specified in subsection (4) above are provisions for the execution of which local authorities are responsible, no account shall be taken of any enactment (whether contained in this Act or not) relating to port health authorities or joint boards or to any particular port health authority or joint board or of any instrument made under any such enactment".'.

    No. 104, in page 65, line 39, at end add—
    '4. The Town and Country Planning Act 1971 shall be amended—

    (a) by inserting the words "and paragraph 8 of Schedule 16 to the Local Government Act 1972" after the word "Act" in section 10(7); and

    (b) in the provisions specified in the first column of the Table below, by substituting the corrected text set out in the third column for the portion of the text indicated in the second column.

    505

    TABLE

    Provision of

    Present text

    Corrected text

    1971 Act

    Section 7(4)

    (3)(a)

    (1A)(a)

    Section 15(3)

    The words from the beginning to "the provisions of"

    Subject to subsection (4) of this section and to section. 15A of this Act,

    Section

    mentioned in subsection

    specified in subsection

    15A(6)

    (4)

    (7)

    Section

    (3) above

    (6) of this section

    15A(7)

    Section 23(9)

    served

    issued

    Section 177(2)

    88(1)

    88(2)

    (a)

    Section 242(3)

    section 88(5)(a) of this Act

    paragraph (a) of section

    (f)

    88B(l) ofthis Act or to

    discharge a condition

    or limitation under

    paragraph (b) of that

    subsection.

    Section 242(3)

    The words from "under

    to grant listed building

    (h)

    subsection (5)(a)" on-

    consent under para-

    wards.

    graph (a) of section

    97A(4)of this Act or to

    discharge a condition

    or limitation under

    paragraph (b) of that

    subsection.

    Schedule 4,

    Subject to section 15A(3)

    When'.

    paragraph

    of this Act, when

    12(2)

    No. 105, in page 65, line 39, at end insert—
    '4. In section 48(2) (b) (iii) of the Health Services and Public Health Act 1968 (which requires a copy of a certificate to be sent in certain cases to the proper officer of the relevant port health authority constituted in pursuance of section 2 of the Public Health Act 1936) the words "constituted in pursuance of section 2 of the Public Health Act 1936" shall be omitted.'.

    Schedule 6
    REPEALS

    No. 106,

    in page 68, line 32 at

    end add—

    '1972 c,70.

    Local Government Act

    In Schedule 16, para­

    1972.

    graph 9(2).'

    No. 107,

    in page 68, line 32, at

    end add—

    '1974 c.37

    Health and Safety at Work

    Section 63 (1) to (4).'.

    etc. Act 1974.

    No. 108,

    in page 68, line 39 at

    end add—

    '1980 c.65

    Local Government,

    In section 88(2)(b), the

    Planning and Land Act 1980.

    words from "in", in the

    1980.

    second place where it

    occurs, to "proposed)"

    and the words "in each

    subsection".

    In Schedule 14, para­

    graph ll(a).'

    No. 109,

    in page 68, leave out

    lines 40 and 41.

  Title
  Amendments made: No. 110, in line 10, leave out
  506
  'byelaws' and insert 'section 8 of the Public Utilities Street Works Act 1950 and sections 171 and 174 of the Highways Act 1980'.
  No. 111, in line 10, leave out
  `to amend section 163(1) of the Highways Act 1980'.
  No. 113, in line 13, leave out from 'make' to 'and' in line 16 and insert
  'corrections and minor improvements in certain enactments relating to the local administration of health and planning functions'.— [Mr. Raison.]
  Motion made, and Question proposed, That the Bill be now read the Third time.— [Mr. Raison.]
  3.36 am
  Mr. Christopher Murphy: Before the Bill receives its Third Reading, it is right to consider what the measure is intended to achieve when it becomes law.
  The basis of many of the clauses collected together under the all-embracing title is that of protecting the citizen from certain encroachments upon his freedom which may prove detrimental. The Government should be congratulated on tackling a number of important issues, which necessitate difficult choices, to achieve the essential safeguards for the individual.
  At this stage of the parliamentary process it is also right to consider how the Local Government (Miscellaneous Provisions) Bill has developed in its passage through the House. I shall make an analysis in terms of a check list: licensing of sex shops—good; not tackling glue sniffing—not so good; more realistic closing hours for take-away food shops—good; not licensing open air festivals—not so good.
  It is also to be hoped that the consultation methods necessary in achieving some of the goals will prove adequate and fair, bearing in mind the new powers that local government may now wield over entrepreneurs and the public alike.
  Before wishing the Bill godspeed to another place, I urge the Minister to review what action might be taken on the outstanding local government issues that have been raised in consequence of the measure and that we continue to keep to the concept of minimum governmental interference consistent with maximum personal independence.
  Question put and agreed to.
  Bill accordingly read the Third time and passed.

  Title

    Northern Ireland
    3.37 am
    The Minister of State, Northern Ireland Office (Mr. Adam Butler): I beg to move,
    That the draft Electricity Service (Finance) (Northern Ireland) Order 1982, which was laid before this House on 19th January, be approved.
    I am conscious of the lateness of the hour, but I know that some hon. Members wish to make a contribution to the debate.
    On 5 March 1981 the Prime Minister announced that the Government would take steps to bring Northern Ireland elctricity tariffs more closely into line with those in England and Wales and to keep them there. The purpose of this draft order is to give continuing statutory authority for the payment to the Northern Ireland Electricity Service of the subsidies that are necessary to implement that important commitment in this and subsequent financial years. As an interim measure payments have already been made to the electricity service under the authority of the Appropriation (No. 2) (Northern Ireland) Order 1981, and as a result the new tariffs necessary to implement the policy have been in force since last May, when the increase in charges was limited to 5 per cent. rather than the 35 per cent. which would have been necessary without assistance from the Government.
    It may be helpful if I sketch out the background to the Government's decision on electricity tariffs in Northern Ireland. The problems inherent in a small electricity generating system combined with Northern Ireland's excessive dependence upon oil —about 80 per cent.—for electricity generation and the failure of electricity demand to grow as expected have meant that the electricity service has been faced with recurring financial problems. In order to break even without assistance on a considerably greater scale than had hitherto been made available, the electricity service would, as a result of the oil price increases of 1979–80, have had to increase its charges to unacceptably high levels—in the Government's opinion.
    In recognition of the latest situation, the Government in 1980 set up a comprehensive review of their policy towards electricity matters in relation to Northern Ireland. On 5 March last year the Prime Minister announced the main conclusion of that review that electricity tariffs in Northern Ireland constituted an unreasonble burden on the Northern Ireland community and that they should be brought more closely into line with those in England and Wales, and significantly, kept there. As a result, the electricity service was asked to limit its tariff increases in 1981–82 so that charges to industrial consumers were made equal with the highest in England and Wales and charges to domestic consumers were set at not more than 5 per cent. above the highest in England and Wales. That was in May 1981, for the financial year 1981ߝ82. In 1982ndash83 and subsequent financial years, all charges to industry and domestic consumers will be kept in line with the highest charges in England and Wales.
    The main provision of this order is article 3, which gives the Department of Commerce power to pay grants to the electricity service in respect of this and succeeding financial years. The payment of grant is to be subject to the approval of the Department of Finance and may not exceed the deficit on revenue account of the electricity service in the year in question.
    508
    The House is already aware that the total public expenditure support required for the electricity service in 1981–82 has been estimated at about £88 million. A sum of £44.9 million was provided from the Contingency Reserve, which enabled the Government's commitment to the service to be met without reductions in other Northern Ireland services. A figure of £70 million has been earmarked for support to the service in 1982–83. The final cost will, of course, depend in part on tariff decisions for that year yet to be taken by particular area electricity boards in England and Wales, and on final consumption.
    These are large amounts of money, and I am very conscious of the importance of ensuring that proper control is exercised of the charge to public funds arising from the commitment to keep tariffs in line with those in England and Wales. To this end, a programme of measures is in hand.
    For its part, the electricity service is considering how best to adapt its existing generating capacity in response to a situation of lower demand and reduced forecasts of future demand. In addition, at the request of my right hon. Friend, the electricity service is carrying out a series of studies of longer-term options for future generating policy in Northern Ireland. These studies include consideration, for instance, of the merits of converting oil-fired power stations to use coal, of interconnection with Great Britain and of newer generating technologies. We wilt give careful consideration to the results of these studies.
    On the Government side, we have established a system of regular monitoring of the performance and finances of the electricity service. The service's corporate plan for the period 1982–83 through to 1986–87, which is being prepared in close consultation with the Government, will provide the basis for establishing future financing needs and for performance criteria.
    The Government's announcement was described in the annual report of the Northern Ireland Electricity Service for 1980–81 as good news of major importance for electricity consumers and the service. I warmly echo that comment. Householders and industry in Northern Ireland have many problems to cope with. The continuance of payments under this order will ensure more equitable treatment in comparison with Great Britain, and will remove an unfair burden from their shoulders.
    I therefore commend the order to the House.
    3.44 am
    Mr. Harold McCusker: It is a shame that we have to discuss this order at this time of night, because it is of real significance to Northern Ireland. I believe that the decision that the Prime Minister made about 12 months ago was probably the most positive action that was taken for some considerable time and showed people in Northern Ireland that there was a political determination on her, part—quite apart from an economic determination—to maintain and sustain the Union. At that time attempts were being made to show once again that there was economic withdrawal from Northern Ireland, and the Prime Minister, by visiting the Province and making that announcement answered that allegation as well as she could.
    I have not complained that Northern Ireland business is normally handled late at night, but what we are doing now exposes the nonsense of the way in which Northern Ireland is governed from this House. In the light of current events, I hope that it will not be too long before such

    509
    matters are given an airing in the Province, where representatives from the Province will be able to express their views and have it adequately reported to their supporters.
    I would be churlish not to welcome the order and what it heralds, but I have a question. If there was movement in this direction, why did the Government have to peg prices in Northern Ireland to the highest tariffs in England and Wales? Is there not a good argument that the price of electricity in Northern Ireland should be pegged to that in a comparable region in Great Britain? The North-East of England, for example has many things in common with Northern Ireland: old, decaying industry—shipyards and so on—and substantial dependence still on textiles, which are in decline as well.
    It would have been much more equitable and beneficial to the Province if some account had been taken of its circumstances and problems. The Government could have said "If we are looking for equity or parity, we should perhaps peg electricity prices not to those in the region with the highest prices in Great Britain but to those in a comparable region." If they had been pegged to tariffs in the North-East of England there would have been an even more significant improvement than is already being achieved.
    This action was crucial, both for the Province's industrial development and for the alleviation of a heavy burden on the domestic budgets of people in the Province. I think, too, of the closure of Courtaulds and ICI. In drawing up their long-term plans, those two companies, heavy users of electricity, must have been influenced by the thought that if they were to invest in the United Kingdom, why invest in a Province where it seemed electricity prices would always be substantially higher than in any other part of the United Kingdom? That question would have been faced increasingly by other industrial concerns in the Province. This action will have gone some way to improve the position.
    The Northern Ireland Consumer Council in 1980 commissioned a study to compare energy prices in Northern Ireland with those in the rest of the United Kingdom. It showed that electricity prices in general were 25 per cent. higher than the average in Great Britain. Gas prices were 153 per cent. higher and coal prices in general were 8 per cent. higher. Is it any wonder that in the poorest region of this country a little over a year ago energy costs represented a 9.1 per cent. Share of household expenditure, whilst on the mainland they represented 5.9 per cent? A household in Northern Ireland had to spend 50 per cent. more on energy than did a household on the mainland. That must have been the reason that justified the Prime Minister in describing this as an unreasonable burden on the people of Northern Ireland. I do not want to appear churlish. If it is accepted that Northern Ireland has the highest unemployment and the greatest poverty, there is perhaps a case for seeing whether more can be done.
    The Northern Ireland Economic Council in its report for 1980–81 summed up what most people in Northern Ireland believe. It said:
    "During the past year the Government has taken some important steps to strengthen the regional economy. Bringing electricity tariffs into line with the highest levels in Great Britain will make a contribution to industrial costs and domestic living
    510
    standards which, to the extent that it is financed by an addition to the planned Northern Ireland budget, represents a significant advance."
    Everyone in Northern Ireland is grateful for that. I have remarked on previous occasions that we in Northern Ireland are trying not to beg all the time. If we are to receive additional expenditure, there is a responsibility on us to keep this extra subsidy to the minimum. We should ask ourselves what we can do to make it as small as possible. We have 20 per cent. unemployment. However, parts of Scotland and Northern England have 17 or 18 per cent. unemployment. The gap is not great.
    Northern Ireland has to be careful to avoid demanding more massive handouts for certain industrial undertakings when other parts of the United Kingdom might require the same consideration.
    If we want extra expenditure in the Province, we have to show the other regions that we want our extra expenditure to be a share of extra expenditure for all the underprivileged regions.
    What can be done to make sure that the subsidy is kept to a minimum? There is no doubt, as the Minister said that attention can be given to the proportions of fuel that are used to generate electricity. A heavy dependence on oil has created problems for Northern Ireland compared to Great Britain. The annual report to which the Minister referred paints a clear picture. In a reference to generation, it states:
    In a number of ways, the Service attempted to minimise the effects of higher fuel costs—particularly those of oil. Comprising as much as one-half of total expenditure, these were over £24.6 million greater than in the previous year, although less fuel was used, due to an increase of 27.2 per cent. compared to the previous year in the average delivered price of all fuels."
    The report gives the assurance that the development of the new fuel terminal enables the purchase of larger amounts of oil. Interchangeability is helping to reduce costs. It is conversion from oil to coal that will bring improvement. The report refers to Belfast West power station, which, if things had been going to plan, would presumably almost be closing today.
    The report states:
    "In maximising the use of coal, being the cheaper fuel for generation, Belfast West power station achieved an output of some 20 per cent. of total generation in 1980/81, while constituting only 11 per cent. of total installed capacity. This was made possible by a coal burn even greater than in the early years of this now ageing plant."
    I am not an expert, but if that load is being put on the plant at this stage of its life, it will burn out far more quickly than may have been expected. I assume that that injects a certain urgency into the need to convert some of our other generating units to coal firing. Can the Minister give us any more information about that? We have heard a great deal of talk about it. It was first mooted two and a half or three years ago. Has no real action yet been taken?
    The right hon. Member for Mansfield (Mr. Concannon) may not like my next question. Do we really need to take our coal from the National Coal Board? A few years ago I would have taken the view that we were obliged to do so, but if we are denied our share of natural gas we cannot be expected to use the NCB's high priced coal if we can obtain coal more cheaply elsewhere.
    The annual report states on page 13:
    "Coal delivered to Belfast West power station increased in price by 12.34 per cent. during the year due to increases in National Coal Board pithead prices and rail and sea freight charges."

    511
    The implication is that all the coal used was from the National Coal Board.
    If Northern Ireland importers could bring in cheap coal from North America, from Australia or from the Iron Curtain countries, why does the electricity service not use that? Early-day motion 150 expresses concern about the possible imports of cheap United States coal. if such cheap coal is available, I should like to think that the Northern Ireland Electricity Service was purchasing it.
    I can scarcely be criticised for saying that, when the people of Northern Ireland are denied access to other fuels that are far cheaper than coal. If we are denied that access, we are entitled to look elsewhere for cheaper prices for the fuels that we have to use.
    I hope that the Minister will tell us that some real effort has been made to convert Ballylumford or Kilroot to use coal in the future.
    The other area in which we can look for some improvement to try to keep the subsidy to a minimum is that of debt recovery. One cannot take much consolation from the annual report in this respect either. On page 9 the report states that
    "progress was made in reducing the number of consumers with amounts outstanding for more than six months by 1,360."
    There remained almost 25,000 with debts outstanding for more than six months, representing a debt of £5.3 million—an increase of 11 per cent. over the previous year.
    The report goes on to refer to a further £3.3 million in respect of "removed accounts". I do not know what they are—perhaps the Minister can tell me—but I assume that one is entitled to add the two figures together, making a total of nearly £9 million.
    I am glad ghat the report says that the electricity service intends to pursue those debts and to ensure that those people pay them, because it has a responsibility to the majority of consumers to do so. It is about time that it made some real effort in this regard. I remind the Minister that several years ago the Northern Ireland Electricity Consumers' Council criticised the service for pursuing some people in Northern Ireland for debts while conveniently forgetting others, perhaps because it was politically expedient to do so or because it was difficult to get at some people but not at others. I hope that the Minister is encouraging the Northern Ireland Electricity Service to go after that debt.
    Many older people in Northern Ireland living in poor circumstances refuse to be a penny in debt, yet many younger people are prepared to allow debt to grow. They get away with it. I do not want to inflict hardship on anyone, but everyone should be prepared to meet his obligations, not only people under financial pressure.
    The Northern Ireland Electricity Service should pursue the people in debt instead of the people we read about in this morning's newspaper. The service is accused of ruining companies in Northern Ireland by putting them to the wall and making them bankrupt. It has done so by insisting that they meet their energy bills. According to the newspaper report, many of those companies could have remained in business, sustained employment and eventually paid their bills.
    The Northern Ireland Electricity Service's response to the allegation is that if someone were to write, it would be prepared to explain. Perhaps the Minister will explain.
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    Unemployment in Northern Ireland is so bad that the NIES will have to give a better explanation than that on the front page of the Belfast morning newspaper.
    The third way in which we can help minimise the subsidy is through interconnection, not just North-South interconnection, but East-West as well. It is a long time since we were first told that some thought would be given to a North Channel interconnector. Has the Minister any more information about that? We know a lot about the North-South interconnector.
    I have with me a publication entitled "Understandmg and Co-operation in Ireland—Trade and Co-operation in Electricity and Gas". It is paper IV produced by a body interested in extending mutual co-operation. It shows that during the past 10 years the North-South interconnector cost Northern Ireland £16.2 million at 1980 prices and that the Republic lost about £12 million. In 1980, the last year for which figures are available, it cost the NIES £2½ million. I presume that the figure for 1981 will be £2½ million to £3 million. What are we doing to ensure a iavang of that £3 million so that it can be deducted from the £88 million mentioned by the Minister?
    In its own way, the report makes some damni ng criticisms of the Government. One would not expect authors such as these to make such comments. It,s said on page 25:
    "It is clear then that some consideration must he given to reinforcing the interconnector".
    That is telling the British Government "Get your finger out and do your job. Try to get the interconnector working and do something to protect it".
    The final sentence adds:
    "what we are effectively showing here is the price which people are having to pay for the absence of security".
    I could hardly believe that when I read it. This Irish Republic publication is saying to the British Government "This is the price you are paying because you do not have security in South Armagh".
    The report also says that the £12½ million accumulated or £2½ million per year
    "is also an indication of how much could justifiably be spent on securing the interconnector".
    In other words, it is costing £5 million—roughly £2½ million for each Government—yet we are not spending a penny to put it into operation or to protect it.
    I hope that the Minister will take seriously the criticism that is implicit in that and the criticism that was relayed to me by Ministers of the Irish Republic, when they spoke of the heavy responsibility that they had with the British Government to ensure that the interconnector worked. They were scoring points, because the bombs that blew up the interconnector were made in their territory. However, when we make an effort to protect it on our territory we shall be able genuinely to criticise the Republic for what it is doing on its territory.,
    I draw the Minister's attention to the letter that he sent to me on 25 November. I asked him about reports that rebates were in the offing for consumers of the various area boards in England and Wales. He replied:
    "The area boards have not yet decided whether to accept this recommendation"
    on how the rebates should be given. He added:
    "You may take it however that we are closely monitoring developments in England and Wales and will be considering the Northern Ireland position carefully in the light of whatever arrangements may be decided upon".
    Has any action been taken? Has the Minister decided what arrangements are likely to operate in Northern Ireland?

    513
    I hope that I have indicated that we do not want to hold out the begging bowl again. We are entitled to pay roughly what other electricity consumers in the kingdom pay. If that requires a subsidy, we want to try to minimise it. If the Government were to take action in the three areas to which I have referred, that would help to minimise it.
    4.7 am
    Mr. J. D. Concannon: As I sat through the night while the previous debate took place I condensed the speech that I intended to make. As a result, my contribution will be noticeably shorter than those that I made from the Government Dispatch Box when I was a member of the previous Labour Government and had responsibility for energy matters in Northern Ireland.
    The Opposition do not oppose the order. In 1977 the then Labour Government began the process of bringing electricity prices in Northern Ireland more closely into line with those in the rest of the United Kingdom. We are pleased that the Government have seen fit to continue the policy of subsidisation.
    We have some reservations about the implications of the order for future energy supplies in the Province. The subsidy that the Government intend to operate for the Northern Ireland electricity service differs slightly from the policy that was operated five years ago. In 1977 the Labour Government wrote off the capital debt of the electricity service and made an additional £20 million a year available for five years to reduce industrial and commercial tariffs. Our subsidisation was based on a fixed amount of additional money that was made available for a limited period. That policy was operated in conjunction with others. There was no point in having a good package of investment if there were continual complaints from industry. The greatest complaint at that time concerned the price of energy. We provided incentives and took action to reduce energy prices.
    The remarks of the hon. Member for Armagh (Mr. McCusker) about cheap coal going to the power stations would have incurred my wrath. The benefit that my right hon. Friend the Member for Barnsley (Mr. Mason) and I obtained for the electricity service amounted to about £160 million at one go. If the hon. Gentleman carries out further investigations, he will find that the NCB fixed a special rate for its supplies to Northern Ireland for the production of electricity. That was followed up by my right hon. Friend and myself. If the hon. Gentleman wants more interesting facts, I point out that we had the Second Reading of the Coal Industry Bill yesterday. If he reads the debate, he will find out how other countries manage to get cheap coal. They get cheap coal because they subsidise their coal industries more than we subsidise ours.
    The Government's proposal provides for an open-ended subsidisation of electricity costs. We have not been told what it will cost each year, and there does not seem to be any limit on the funds made available by the Department of Commerce. Nor is it clear where the money will come from in future. I am glad that the Minister has made it clear that the funds to keep down electricity prices in the Province will be additional to other expenditure, and not funny money. I do not think that the people of Northern Ireland would tolerate the allocation of resources from other designated expenditure to meet these costs.
    The long-term public expenditure implications of the order are not 100 per cent. clear. We do not dispute the immediate need to subsidise electricity costs in Northern
    514
    Ireland, but we are concerned that the Government have embarked on this long-term course, apparently without regard to what could be termed general energy policy considerations for the Province.
    The energy situation in Northern Ireland is characterised by high reliance on electricity as a fuel. It is also marked by the near total dependence of the electricity supply industry on oil as a power station fuel.
    Figures have been bandied about. It is worth pointing out that over 80 per cent. of the installed electricity generating capacity in operation in the Province is oilfired. That causes difficulties for Ministers when grappling with the problem. This high dependence on oil creates vulnerability in terms of prices and of supply. Should the world oil situation change radically, as it often does, Northern Ireland electricity would become exceptionally expensive, if it were produced at all. Subsidisation will help to cushion the effect of high oil prices in future, but it cannot provide electricity if oil supplies are severely restricted.
    I know the difficulties. Northern Ireland is not short of energy. If it were, it would make Ministers' decisions so much easier. We could plan our future energy resources much better. Northern Ireland possibly has too much energy. It had too much energy even with the Labour Administration's economic policies. There was surplus energy in Northern Ireland to about the year 2000. In view of present-day economic problems, I am sure that that surplus will go beyond the year 2000.
    When talking about energy in Northern Ireland one cannot ignore Kilroot. It is there. If it were not, Ministers would no doubt find it easier to look for new energy supplies in Northern Ireland and to diversify and plan for them. Unfortunately, decisions on these matters were taken long before direct rule. With hindsight, Kilroot would not have been Kilroot. The obvious thing would have been to diversify, as has been done in the rest of the United Kingdom, and to have had two or three smaller power stations. We could then have considered other fuels than oil.
    Of course, as the hon. Member for Armagh pointed out, it would have been better if the interconnector could have been put into use. I suggest that any Minister should seek to put that into effect at the first opportunity. Ministers—and the south—know the savings that could be made. It would be good for both communities in Ireland. I fail to understand those who will not allow it to be connected, because it could only benefit the people there. But I can assure the hon. Member for Armagh that in security terms it is not as easy as he suggested. The matter does not end with the interconnector, but goes on to other factors.
    We do not have time tonight to debate all the issues surrounding energy in Northern Ireland, but I must make it clear that we cannot continue writing blank cheques for the future subsidisation of electricity in the Province unless that is part of a wider energy policy based on diversification of supply. Even with the difficulties that I have described, we cannot leave energy there as it is now. I hope that we shall have the opportunity to debate Northern Ireland's energy problems at greater length soon, and that we shall not be confined just to making a few remarks in a gas order debate.
    The effect of the subsidisation that we are to approve tonight will be to bring electricity prices in Northern Ireland into line with the highest rate of charge in England

    515
    and Wales. The Province's domestic consumers will be paying 8 per cent. more than the average British price for electricity. The scale of fuel poverty in Northern Ireland is more extensive than in any other part of the United Kingdom, and even with the subsidy, electricity is still beyond the means of most low-income families, those on social security, and the ever-increasing numbers of people in the dole queues.
    Throughout Northern Ireland, thousands are suffering as a result of fuel debt and deprivation. We believe that consumers should pay their way. Electricity debtors on social security can repay through the debt collecting machinery by which there is a limit on the amount that the Northern Ireland electricity service can claim each week. However, debtors who are in low-income, non-public sector jobs have to repay through voluntary agreements where high payments are often demanded on pain of disconnection. I hope that the Minister recognises that the energy position in Northern Ireland needs far more to improve it than subsidised, but still high, electricity prices.
    We believe that it is time that a more sophisticated energy policy was developed for Northern Ireland. In September 1978 the Northern Ireland Economic Council prepared a paper entitled "Recommendations on Energy Policy in Northern Ireland", and one conclusion of that report is relevant to our debate tonight. Paragraph 43(c) reads
    "The recent subsidy arrangements introduced by the Government"—
    the ones I have been describing"—
    "to reduce electricity industrial and commercial tariffs were necessary and justified in the circumstances, but a subsidy from Government revenues is not a satisfactory long-term approach to a structural problem."
    We must ask the Minister to turn his attention to that structural problem and to produce comprehensive suggestions for the future structure of energy supply.
    Perhaps it is time to re-examine the suggestion made by my hon. Friend the Member for Pontypridd (Mr. John) two and a half years ago, that an independent energy commission should be set up in Northern Ireland to consider the future supply and demand and o make proposals.
    The Province does not yet have an energy crisis. I assure the Minister that I understand the difficulties. Speaking for the Opposition—I believe that the people of Northern Ireland feel the same—I suggest that more strenuous efforts should be made to get an energy policy for the whole of Northern Ireland. The hon. Member for Armagh made a fair point when he said that we cannot go on paying out the subsidy without examining the root cause. The proposal before us involves £88 million. There has been a £20 million a year write-off, and an overall sum of £160 million. There must be a better way. If we do not find a more sophisticated policy we are only storing up trouble for the future.
    The Opposition welcome the efforts being made in Northern Ireland. We understand the problems and know why electriciy generation is expensive. It is to a great extent due to the unfortunate happenings and to what has taken place at Kilroot. If the Minister is still getting the same information as I was getting, he will know that it will be rather expensive now to change the direction of Kilroot. If there is any possibility of doing it, I hope that the Minister will consider it.
    We gladly welcome the order.
    4.20 am
    Mr. Adam Butler: By leave of the House, Mr. Deputy Speaker, I should like to reply briefly to the debate. The Government welcome the reception given to the draft order by those who have spoken. There can be no doubt of its importance. It is correct that the share of household income that energy costs represent is substantially higher in the Province. It falls on those who on average earn less than people in Great Britain. Therefore, this act of Government policy can be seen as following a process—not begun by the previous Administration but pursued by them—of helping with electricity costs. That is seen as necessary.
    On the other hand, the costs involved are high. The figure is £88 million for the current financial year and £70 million set aside for next year. Therefore, I welcome the statement by the right hon. Member for Mansfield (Mr. Concannon) and the hon. Member for Armagh (Mr. McCusker) that we have to consider whether it is possible for the subsidy to be reduced or perhaps even substituted by some change of policy.
    The right hon. Gentleman called for a sophisticated energy policy. There has to be a policy, but I wonder whether somebody in this House or in another place called on the Government of the day for a sophisticated energy policy and was told that the investment should be in oilfired stations. At the time it was, I am sure, thought to be a wise and sophisticated policy decision. I am not, with hindsight, blaming anybody but simply pointing to it as a fact. It is as a consequence of that decision that we have many of our troubles today.
    The Northern Ireland economy is a very small one, but as far as possible in any economy a range of energy sources is necessary. I must not be drawn down that road but it is one reason why we shall continue to look positively at the possibilities of gas supply from the South, and at the possibility of conversion from oil to coal of one or more of the power stations. That is part of the review which is now being carried out by the electricity services. We must establish the cost benefit of what would undoubtedly be substantial capital expenditure. We have to look at the likely pay-back, but, as oil prices go up faster than others, an investment of that sort has to become increasingly attractive.
    We are looking not only at the conversion from oil to coal. There are other alternative sources, such as Strangford Lough. All these will be included in the review, as well as the possibility of an interconnector between Northern Ireland and Great Britain. We shall also be including in the review—the hon. Member for Armagh may be interested in this—the source of coal.
    There are some hopeful prospects for the use of domestic lignite. The possibility of importing coal from countries other than Britain must be examined. However, in order not to worry hon. Members, like myself, with coal mining interests in their constituencies, it stands to reason that if conversion takes place the total consumption of coal will rise and there may be a prospect of further sales by the NCB. That must be a matter for the electricity service and not for me.
    Debt recovery must also he a matter for the electricity service. It is clear from the report that the service intends to intensify its work in that area. The hon. Member for Armagh drew attention to a report in a newspaper this morning, which I have considered. The position of the

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    Northern Ireland energy service is the same as any other facility in the United Kingdom. In cases of liquidation or receivership, the service has a responsibility to recover debts, just as the liquidator or receiver has the responsibility to take appropriate action in his case. As far as one can establish, in only one such case has there been a threat to jobs, but that has been resolved satisfactorily.
    I must answer the question why we chose to restrict the tariffs to the board with the highest charges in England and Wales. It is important to remember that action had to be taken to prevent increases to unacceptable levels. Secondly, we had to provide stability and certainty against which industry and the domestic consumer could plan. Investors may have been put off by high, fluctuating tariffs.
    We need not be reminded that the sums involved are great. One way in which to limit the subsidy is not to take a comparative point lower than we decided. Why did we go for the highest? There is very much in the argument that, while it may be equitable to look to individual and corporate taxpayers to subsidise their equivalents in Northern Ireland, it would hardly be reasonable to look, for example, to the taxpayers in the London region, where the tariffs to the domestic consumer are higher. As an argument in equity, that is reasonable.
    The proposed reduction in bills in England and Wales are not regarded strictly as a tariff reduction but as a one-off exercise. We felt that it could not be said to fall within our tariff policy for Northern Ireland. We considered whether we should take comparable action, but we felt that what had been done for consumers in Northern Ireland was of substantial benefit. As the Government's policy was not implemented until May 1981, the consumers have enjoyed a benefit in the month before tariffs were raised, albeit by a smaller amount. There is no reason for complaint from the Northern Ireland consumers.
    I have been glad of the opportunity to say something about these matters. I regret that, as so often—tonight is probably a worse example than usual—we are having to debate important matters at the end of the day's proceedings in the Chamber. I would have welcomed a longer discussion, but I commend the order to the House.
    Question put and agreed to.
    Resolved,
    That the draft Electricity Service (Finance) (Northern Ireland) Order 1982, which was laid before this House on 19 January, be approved.

    Mr. Peter Westpfel
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]
    4.30 am
    Mr. Bob Dunn: I am grateful for the opportunity to present the case of Peter Westpfel, a constituent normally resident at 4, Silver Birch Close, Wilmington, Dartford, Kent, to the House and my hon. Friend the Minister of State, Foreign and Commonwealth Office.
    During what appeared to me a callous, unforgettable and horrific experience for Peter Westpfel, the help and encouragement given by my hon. Friend and his Department to me and to the Westpfel family was, and is, greatly appreciated.
    Peter Westpfel telephoned me a few days ago from Port Elizabeth asking for his case to be raised in the House and for me to seek to elicit answers to a number of significant and important questions that have arisen as a result of his experiences in Zambia. I consequently believe it necessary to give the House the right background to the debate.
    Peter Westpfel had been working and living in Port Elizabeth in South Africa for the two years prior to February 1981, when he informed his family that he intended to take a month's holiday in order to motor cycle from South Africa to Zimbabwe and on to Zambia and to make the return journey back to Port Elizabeth.
    Mr. and Mrs. Westpfel in Wilmington received a postcard dated 16 March from their son stating that he had rested up and was travelling to Zambia where he intended to take a short cut from Kariba to Victoria Falls. On arriving at the Zambian border, he was kept waiting for more than a day while the authorities decided whether he needed a visa. On 19 March he was finally admitted into Zambia and had travelled 120 kms up the road to Kafue bridge, where he encountered a road block manned by military forces. Every person who wished to cross the bridge was checked and searched.
    It was at that point that the authorities arrested my constituent. Two men approached him, one with a belt-fed machine gun and the other with an automatic rifle and accused Peter Westpfel of being a South African spy. He was taken to Kafue police station under arrest and was accused, according to the charge sheet, of being a
    "suspected South African commando holding a British passport".
    My constituent was arrested on Thursday 19 March and had still not been fed by Saturday when he was taken to Lusaka remand prison, where he was imprisoned with a number of political detainees.
    Meanwhile, Mrs. Westpfel was telephoned by the Foreign Office in London on 26 March and told that a telex message had been received stating that Peter Westpfel had been arrested on 19 March and was detained in Lusaka remand prison. He seemed physically well and in good spirits.
    Reverting to events in Lusaka, my constituent was kept in disgraceful conditions and was initially denied access to legal or diplomatic representatives. In a letter to me last year, Peter Westpfel said:
    "I wont go into detail as to how they treated me, but I was arrested and the charge sheet read 'suspected South African commando holding a British passport'.I was treated as a prisoner of war for the first couple of days. No physical violence was used, just humiliating body searches and hours of interrogation about South African defence forces. Twice they threatened to

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    shoot me if I did not tell them where the other commandos were. At no time during my month in prison was I ever fed by the prison authorities. I lost 221bs in weight. My money was taken from me soon after my arrest so I was not able to buy food. On one occasion I was put in a cell 8ft by 8ft with 14 prisoners for 12 hours.—there was no toilet—I do not have to say any more."
    My constituent gave me details of other disgraceful indignities, but, in view of the time, I shall not detain the House by listing them. Suffice it to say that conditions at Lusaka remand prison seem to be worthy of investigation by one or other of the international investigative agencies.
    After 17 days, from the time of his first arrest, Peter Westpfell was taken to court, but was returned without action after his lawyer failed to appear. Three weeks passed and on 7 April he was again taken to court and fined for illegally entering the country. With the assistance of the Foreign Office, moneys deposited with the Department were made available to Peter Westpfel and on paying the fine, he was released on 14 April.
    I shall raise many questions with my hon. Friend the Member for Shoreham (Mr. Luce) although I appreciate that he may be unable to answer them now. I hope that he will answer them and that meetings can be arranged between us in the future.
    Perhaps some indication could be given of the reference points and evidence that led to Peter Westpfel being viewed as a South African spy by the Zambian authorities. Secondly, was it necessary for him to obtain, as a United Kingdom national, a permit or visa to enter Zambia? Thirdly, if it was not necessary, as he was in possession of a valid United Kingdom passport, why was his entry, for he was fined, considered illegal? Fourthly, what is the nature of the arrangement by which Zambian authorities notify United Kingdom representatives that British nationals are being held on criminal charges?
    A report about my constituent said:
    "In the prison was a black South African interned eight years without trial who received regular visits from British embassy staff. On one of these visits the official heard of Mr. Westpfel, who had been denied access to a lawyer or the embassy."
    Was it only by chance that my constituent's case was brought to the attention of the British authorities?
    Fifthly, what arrangements can be made for the return of goods and money confiscated? May I enlist the good offices of my hon. Friend to consider securing compensation for my constituent?
    Finally, are there other British nationals in the Lusaka prison, and if so, how many? I realise that answers to those questions need to be found, and I hope that the Minister can meet me in the near future.
    I realise that many years have passed since the Don Pacifico incident, but it is perhaps a matter of great democracy that my constituent knows, that at this late hour his complaints are still being made known in the House of Commons and attended to. I again record the thanks of the Westpfel family to my hon. Friend and his Department and I assure him that the terrible effects of that experience on my constituent are still with him.
    4.40 am
    The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): I listened with great interest and care to the comments made by my hon. Friend the Member for Dartford (Mr. Dunn) on the unfortunate experiences of his constituent, Mr. Westpfel. I have carefully noted some of the points that the Foreign Office was not fully aware of and that have been brought to my
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    hon. Friend's attention more recently by Mr. Westpfel. Obviously, it would be wise for me to consider the points carefully.
    My hon. Friend posed several important questions and, as he suggested, I should prefer to respond later, perhaps in a letter. It might be helpful to have a meeting to discuss the matter further. The most helpful step that I can take is to paint the background of the case, so that there is a clear understanding of what happened and what the British Government could do. I am extremely grateful to my hon. Friend for his kind words about the Foreign Office's support in the difficulties that Mr. Westpfel faced
    We fully understand Mr. Westpfel's concern and that of his family in this country. Mr. Westpfel had been working in South Africa for some time and decided to travel on holiday by motor cycle to Zimbabwe and Zambia. As a resident of South Africa, he was required by Zambian regulations to obtain a visa in advance. That answers one of my hon. Friend's points. He appears to have obtained one. In addition, Zambian regulations require visitors arriving by road to complete Customs formalities at a border post and to declare on entry the foreign exchange they possess. The regulations also lay down certain requirements for the import of motor vehicles.
    The first we knew of Mr. Westpfel was when our High Commission in Lusaka learned on 23 March, when visiting Lusaka prison by chance, that he had been arrested on 19 March and that he was expected to be charged with a breach of the immigration regulations. He had retained a lawyer. Our consul in Lusaka immediately, on the same day, visited Mr. Westpfel in Lusaka remand prison. He appeared to be in good health and spirits and asked that his parents be informed of his arrest and reassured that he had no immediate requirements from them. This message was given to his mother on the same day.
    On 7 April Mr. Westpfel was found guilty of illegal entry into Zambia and was fined 200 kwacha, some £108. He was told that he would be released and escorted to the Zimbabwe border once his fine was paid. If not, he would have to spend three months in prison in default. On the same day, the Foreign and Commonwealth Office informed his mother of the position and, to assist her son, and to avoid any delay, offered to arrange the transfer of money for Mr. Westpfel, something which should normally have been arranged through banking channels. In addition to his fine, Mr. Westpfel had to pay his own lawyer and it was thought that the travellers' cheques he had brought into Zambia might be confiscated. As a precaution, therefore, we suggested that his parents might like to supply sufficient money for his return journey to South Africa. We transferred the money, and arranged for £100 to be available to him in Zimbabwe, immediately it was received on 8 April. On 15 April, Mr. Westpfel's lawyer confirmed that he had left Lusaka under escort that morning for Zimbabwe.
    There is no suggestion that the Zambian authorities did not act correctly and in accordance with Zambian law. That should be said. It is also clear that they acted with reasonable promptness both in bringing Mr. Westpfel to court and in releasing him on payment of the fine. It is also clear that the Foreign Office and its posts in Zimbabwe and Zambia could effectively and promptly help, as my hen Friend kindly said. Mr. Westpfel made no complaints to our staff in Lusaka about prison conditions at that time. That does not mean that now that he has raised this

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    question with my hon. Friend, I should not take a careful interest in his comments and should not examine all the evidence. It is important that his anxieties and experiences should be examined.
    There are certain procedures for notification of arrest. Zambia adheres to the Vienna convention on consular relations. Under that, a detained United Kingdom national is permitted to inform the consulate officer of his plight and the local authorities are expected to offer him every facility for doing so.
    We do not, as far as we are aware, have any other British subjects imprisoned in Zambia at present. We have not been notified of any. We have no record of any United
    522
    Kingdom citizen without other citizenship currently in gaol in Zambia, nor of any having been in prison during the three weeks that Mr. Westpfel spent in remand prison in Lusaka. We have not had any substantial complaints from United Kingdom citizens about present conditions in Zambia.
    That having been said, I shall look carefully at the points that have been raised by my hon. Friend on behalf of his constituent, Mr. Westpfel. I shall make a point of getting in touch with him as soon as I have had a chance to study the matter.
    Question put and agreed to.
    Adjourned accordingly at fifteen minutes to Five o'clock.

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Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES On the Woolsack.
Prayers—Read by the Lord Bishop of Carlisle.
The Viscount Cobham—Took the Oath.

Students: Disruption
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 what action they propose to take in respect of the decision of the National Union of Students to call for a weekof disruption in the universities, polytechnics and colleges.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Elton): My Lords, it is to be hoped that students will not disrupt institutions and courses and thus hinder their own academic progress; but the response to any incidents which may occur must remain the responsibility of the institutions concerned.
Lord Beloff: My Lords, while thanking the noble Lord for his encouraging reply, may I ask whether it is not the case that the organisation, the National Union of Students, which has given this excessively foolish advice is wholly financed out of public funds diverted from their proper purpose of providing student amenities in individual universities, polytechnics and colleges? Can the House be told what sum of money is involved?
Lord Elton: My Lords, the National Union of Students draws its income from the affiliation fees paid to it by student unions in individual institutions and universities. The question of whether they affiliate or not is for them to decide. The sum of money which the noble Lord asked about is not a matter of return to the Government, but press reports lead us to believe that it is about £1 million.
Lord Wynne-Jones: My Lords, will the noble Lord not agree that the action taken by the Government against all forms of higher education—
A noble Lord: Disgraceful!
Lord Wynne-Jones: —is one which inevitably draws a response? Will the noble Lord bear in mind that once the statement was made (I will not say it in the original French): " This animal is very dangerous; when attacked, it defends itself "?
Lord Elton: My Lords, if that was not another question, I would say that there is always a response
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to Government action; but there is proper response and improper response. Students go into universities to acquire knowledge and hopefully, in addition, to acquire wisdom. That is not always obtained by disrupting the institutions in which that activity takes place.
Baroness David: My Lords—
Lord Shinwell: My Lords, may I thank the noble Baroness for allowing me to speak first? May I ask what this alleged disruption is about? Is it not the practice of students always to cause disruption of one kind or another? Is this some new form?
Lord Elton: My Lords, I would not wish to dismiss that flippantly. The form, I think, varies from generation to generation of students, and so does the pretext—which at the moment is basically economic.
Lord Molloy: My Lords, does the noble Lord not agree that student protests and student rags are part of the democratic structure of this country? Would it not be much nicer to read the student protestations as student rags and not create a situation like that in Poland? Is it not dangerous to applaud what Solidarity is doing and then to kick our own students in the teeth for exercising the freedom to which they are entitled?
Lord Elton: My Lords, I see nothing illogical in defending the functions of institutions of learning from those who seek to disrupt them and to prevent them from doing what they set out to do. That is the only aspect of the demonstration which I have said is a matter of concern. The noble Lord may have as happy memories of other forms of student indiscipline as I have; and I felicitate him upon them.
Baroness David: My Lords—
Noble Lords: Hear, hear!
Baroness David: My Lords, I am glad that women get a look in at the end. May I ask the Minister whether he has looked at the document which outlines the NUS plans for action beginning on March 1st? Is it not quite a responsible document? No student is going to be involved in doing anything for the whole week, but, possibly, one day. Would he not agree that the students have something to be worried about?—their grant will be increased by only 4 per cent., which is well below the rate of inflation; the parental contribution is frozen at its present level and the minimum grant is frozen. They have something to take action about. Would the noble Lord not agree that this will be political experience for the students, and that political experience is something that students ought to learn and to go in for?
Lord Elton: My Lords, orderly, constructive demonstration was not the subject of the Question. The Question referred to disruption, and that is what I answered. The more orderly and constructive the way in which a body can make its opinion felt, the more effective in the end it will be upon those to

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whom it is addressed. Any move in this direction is welcome.
Lord Glenamara: My Lords, is the noble Lord aware that, under the Government's constraints, a great many students up and down the country are now suffering very real hardship? Is he aware that many students are not getting sufficient to eat? Is he aware that many students are not buying the books that they are supposed to be buying? Is he aware that this is affecting the middle income group in the main where the assumed parental contribution is not being made? Is he aware that, in this PR age, the week of protest is about the only way in which they can make their grievance felt?
Lord Elton: My Lords, the noble Lord's series of questions opens a whole line of responses. My response in that circumstance is merely to say that the Government's economic restraints cannot be applied less stringently to those who are not in work but are learning at public expense than it is to those who are in work.
Lord Robbins: My Lords, the original Question referred to " disruption " presumably of a disorderly kind. Is the Minister aware that when disruption has occurred in the past—as it has, unfortunately, on many occasions—the proportion of students involved has been fractional?
Lord Elton: My Lords, I am greatly obliged to the noble Lord for doing something to put the character of our national student body into a proper perspective. It is those who seek to deny freedom of speech—for instance to visitors—who bring it into disrepute. If I may add to that, I think those students merely demonstrate in a small, shrill way an affinity in one respect with Adolf Hitler and Joseph Stalin—that is, an instinctive fear of the truth.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, interesting though this subject is, I rather fancy that we have given it a fair run. Perhaps it might be for the convenience of your Lordships if we move on to the next Question.

West Cumbria: Apprentice Training Facilities
2.45 p.m.
The Lord Bishop of Carlisle: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will consider giving full financial assistance to the setting up of a craft apprentice training college/training workshop in West Cumbria, which would provide appropriate training to full apprentice standard.
Lord Lyell: No, my Lords. The existing facilities for apprentice training in West Cumbria are under-utilised, and the Government could not therefore give financial assistance in order to provide additional facilities.
The Lord Bishop of Carlisle: My Lords, I thank the noble Lord for that Answer. Is he aware that most of the apprenticeships in that area are connected with one large employer—British Nuclear Fuels; and does he agree that this makes the district dependent on the fluctuating demands of a single employer? As a consequence, their training is only in the skills which that one employer requires.
Lord Lyell: My Lords, the right reverend Prelate is perfectly correct to state that some of the apprentice opportunities are with British Nuclear Fuels. He is correct in what he stressed on that particular plane. I am sure he will also be aware that at the West Cumbria College in Workington as well as at the British Steel Corporation there are 110 training places for apprentices of which at the moment 45 are filled. I am sure that the right reverend Prelate will appreciate that there is spare capacity not just at British Nuclear Fuels but also in West Cumbria in this field.
Lord Peart: My Lords, will the Minister appreciate that this is one of the hardest hit areas in the country? There is high unemployment. The project that the right reverend Prelate has mentioned here today will help in some way. Will the Minister have another look at the situation, because things are very bad in this lovely part of the county of Cumberland which I used to represent.
Lord Lyell: My Lords, I shall certainly undertake a further examination of the point raised by the right reverend Prelate so far as British Nuclear Fuels are concerned. I am sure that the noble Lord, Lord Peart, will bear in mind the figures that I stressed to him of the apprentice opportunities available in West Cumbria in other industries.
Lord Rochester: My Lords, the right reverend Prelate referred to a large employer. Is it the intention that under the new training initiative more financial help should be given to large employers willing to give training to more skilled people than they themselves will later be able to employ?
Lord Lyell: Not necessarily, my Lords. I am sure that the noble Lord will be aware that our programme set out in the White Paper merely outlines the plans of the Government for the return of skilled training. This has to be carried out in association with employers. The Government can do only so much. We look for support from other employers as well as the major employers that were referred to by the right reverend Prelate.

Luncheon Voucher Concession
2.48 p.m.
The Earl of Kinnoull: My Lords, I beg leave to ask

1293
the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will consider, before the next Budget, adjusting the allowance of luncheon vouchers at least to equal the present cost of a single ham sandwich.
The Minister of State, Treasury (Lord Cockfield): My Lords, the luncheon voucher concession is not and never has been linked to the cost of a ham sandwich.
The Earl of Kinnoull: My Lords, I thank my noble friend for that reply. It was unusually indigestible and stone-hearted. Is my noble friend aware that over 1 million people use luncheon vouchers every day; another 2 million people benefit from concessionary canteen lunches well in excess of value of the luncheon voucher; and there is a strong case of parity to bring this old, well-trusted and popular concession up from 15p to £1?
Lord Cockfield: My Lords, I entirely appreciate the arguments that my noble friend advances. I can assure him that we give careful consideration to all the suggestions which are made in connection with the Budget. Nevertheless, I think that I would be misleading him if I were to give him the impression that the line which has been taken so consistently by so many Chancellors over so many years is likely to be changed in the next few weeks.
Lord Bruce of Donington: My Lords, is the noble Lord aware that when it comes to Customs and Excise duty the Treasury always put forward as a reason for introducing the invariable upward changes the ground that they have to keep pace with the rate of inflation? Is there not a very good case indeed for reviewing the position here? Will the noble Lord also bear in mind that those whose good fortune it is to be directors of companies, or even higher executives of companies, can obtain much more luxurious lunches than are covered by a luncheon voucher, in the boardrooms or restaurants carried on by their companies, and that these are obtained not only free of charge but free of any taxation upon the benefit that might be likely to ensure?
Lord Cockfield: My Lords, I must say that I am surprised to find the noble Lord not only supporting but advocating the expansion of large tax-free benefits to people in the upper income groups; but the contrary policy has been followed by successive Governments—not just this Government but their predecessor as well—and that policy has been to encourage people to pay remuneration in cash rather than in kind. I entirely agree that the luncheon voucher concession is not a very large matter. Nevertheless, to increase it would be to move contrary to the general policy which has been followed in this field.
Lord Boyd-Carpenter: My Lords, but is it not the fact that the luncheon voucher was introduced to give
1294
some help to workers in small concerns, as distinct from those in large concerns who enjoyed subsidised canteen facilities? Is not retaining the luncheon voucher at what is today a ridiculous figure tending to discriminate rather harshly against people who, on the whole, are in the lower incomes group, working for the smaller companies?
Lord Cockfield: No, my Lords, I do not think it is right to draw the conclusion that my noble friend does. The great majority of people have access to neither luncheon vouchers nor to subsidised canteens.
Lord Robbins: My Lords, would not the noble Lord agree with me that the principle involved is the principle of the reduction of inflation? Perhaps he might tell the House how soon it would be, at present rates of inflation, before the luncheon voucher buys half what it does at the present time.
Lord Cockfield: My Lords, while I am grateful to the noble Lord for the point that he makes, we have enough difficulty in dealing with the present value of the luncheon voucher without speculating on what its value might he in a few years' time.
Baroness Gardner of Parkes: My Lords, could the noble Lord the Minister comment on whether or not he is aware that the small firms are kept very strictly to the 15p per day luncheon voucher while many larger firms give vouchers greatly in excess of that to their employees? Although this is meant to be declared and one is meant to pay tax on an amount above a weekly total of 75p, every person of whom I have asked this question—and I have been following the matter for some time—tells me that in the big companies it is just more or less " lost ", and in the smaller companies it is strictly enforced as a precise amount of 15p per day.
Lord Cockfield: My Lords, I would not accept the view that there is a difference between large companies and small companies on this matter. It is open, as my noble friend suggests, to any company to give any amount of luncheon vouchers they wish. The tax concession relates to the first 15p of the voucher, irrespective of the amount. The PAYE records of companies, both large and small, are audited by the Inland Revenue, and if they find a failure to make proper returns they of course pursue the matter.
Lord Kaldor: My Lords, am I wrong in thinking that the expense incurred in maintaining a boardroom for catering purposes for members of the board is a legitimate business expense from the point of view of corporation tax, and that beneficiaries of the food provided there are not taxed on benefits in kind on their consumption?
Lord Cockfield: My Lords, the allowance for corporation tax purposes for the cost of meals supplied is subject to certain limitations which are written into the Act. Where those limitations are satisfied, the cost is not charged on to the individual any more than is the 15p of the luncheon voucher.

Conservation Area, London, EC1: Applications
2.57 p.m.
Lord Henley: 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 call in the application for the demolition of the unlisted buildings in the conservation area known as Little Britain, London, EC1, for decision by the Secretary of State for the Environment.
The Earl of Avon: My Lords, my right honourable friend the Secretary of State for the Environment is aware of the proposals referred to by the noble Lord and is presently considering whether to exercise his powers to call in the applications and determine them himself. If he does so, he would deal with them concurrently with the appeals already lodged in respect of applications to demolish certain listed buildings within the development site.
Lord Henley: My Lords, I thank my noble kinsman for that Answer. May I ask him to take it a little further and ask the Secretary of State to consider calling in the application for detailed planning permission for the redevelopment of the site, in view of the considerable public interest in the area and in view of the fact that the new plans include at 250 ft. office block and the destruction of the existing mediaeval street pattern? Also will he stress to the Secretary of State the importance of calling this in so that the matter may be considered by a impartial tribunal?
The Earl of Avon: My Lords, if my right honourable friend calls in the application then detailed planning approval would of course be taken into account.
Baroness Birk: My Lords, while I find the Minister's reply certainly rather hopeful, is it not true that at the Smithfield district plan inquiry the question of the road, Route 11, was outside the inspector's jurisdiction? Would he not agree that this proposed road stems from 1947, since when there have been considerable changes in traffic needs and conservation attitudes? Is not the only proper way for the Secretary of State, as the Minister rather intimated, to call this in and consider it together with the appeal which is before him for the three listed buildings, and therefore to consider both the road and the unlisted buildings application in what is now a conservation area in an historic part of the City of London?
The Earl of Avon: My Lords, I am grateful to the noble Baroness for bringing up yet another point in this very delicate issue. As I said, my right honourable friend is thinking of calling this in, and I am sure that that will be one of the considerations.
Lord Reilly: My Lords, may I ask the Minister whether he is aware that the Royal Fine Art Commissioners view this development with the utmost dismay
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and, further, that they feel very strongly that two at least of the unlisted buildings should be retained?
The Earl of Avon: My Lords, I am aware that my right honourable friend has received a number of representations about the proposals. I was not previously aware of that one, but it is now on the record.

The European Communities Budget 1982
Lord Denham: My Lords, with the leave of the House, at a convenient moment after 3.30 this afternoon my noble friend Lord Trefgarne will repeat a Statement that is being made in another place on the European Communities Budget 1982.

The Economic Situation and National Recovery
2.59 p.m.
Lord Beswick Lord Beswick rose to call attention to the economic and social effects of over-reliance on market forces in the shaping of our society; to the desirability of a more broadly-based policy for national recovery; and to the need for a wider consensus of opinion on these matters; and to move for Papers.
The noble Lord said: My Lords, the Motion I seek to move calls attention to the economic and social effects of allowing market forces to be the dominant influence in the shaping of our society. I shall seek to show that the economic emphasis of today cannot give us the sort of society we want tomorrow. I also submit that there is a growing awareness of the need to give up entrenched positions in the effort to get wider agreement on policies which genuinely would serve the common good.
It was with this thought in mind that I originally put down this Motion during last Session. I had read with sadness what the right honourable lady the Prime Minister had said in Melbourne. She is reported as saying:
" Consensus seems to be the process of abandoning all beliefs, principles, values and policies ".
I wonder whether any noble Lord here would support that attitude. If it were true, what would be the purpose of coming together to discuss these matters in a free Parliament?
I much appreciate being invited today to speak from this Box of the Opposition Front Bench, but I readily admit that the party of which I am proud to be a member has not always had a monopoly of the truth. I shall seek to show, however, that the Government's present economic policy is not giving—and just cannot give—the social results which a stable society requires. I ask the House to agree that in the modern industrial society, highly strung and highly sensitive with modern technology; when each of us with modern equipment can communicate easily with the rest of us; when a small group with responsibility can, if they so choose, do damage to all of us—then in that kind of society a broadly based policy, democratically agreed, is an absolute prerequisite for the solution of economic problems.
Yet it is at this time, in this kind of society, that the Government have chosen to turn back the pages of history, to emphasise the merits of individual self-seeking and to over-glorify the idea of private, as against public, enterprise. The benefits of this approach are not conspicuously obvious after half a Parliament, as Mr. Pym very tactfully reminded his colleagues on Monday, and as the CBI have said this week. We appear to be getting a consensus on that statement, at any rate.
The Treasury Ministers, however, appear to remain aloof from this rethinking. Though they have recently been given to talk about the average rates of inflation, Treasury Ministers have as yet been unable to invent another index which would show that the inflation rate is less now than when they took over. Even the control of money supply is not exactly a success story, and the tragedy of unemployment is so stark that I shall not dwell upon it this afternoon. But Ministers do now clutch at statistical straws which I think we should examine. They quote figures about the recent level of wage settlements and the improvement of output per man-hour which, they say, show that there is now a hopeful spirit abroad. I think that we should look carefully at these claims.
First, as to the level of wage settlements, it is true that the miners settled for an increase some 230 per cent. above the rate which the Government had suggested for the public sector. I do not think that it would be wise, for various reasons, to quote that as an example of the new spirit. But we should look at the general level of settlements. The CBI very reasonably say that the lower level this year—and I quote from their statement—is due to a combination of low profits, price competition and fear of redundancy. I do not think that fear is a good basis for hope. A director of one of our larger companies, Standard Telephones, put it rather more directly. Mr. Neville Cooper said:
" In so far as this moderation and peace is based on the near bankruptcy of our industry, it requires a permanent state of near bankruptcy for its maintenance. Hardly "—
said Mr. Cooper—
" an inspiring prospect "
Let me say at once that, in this last year or two, many old job practices and demarcation positions, which were built up in the struggles of the past, have gone and I hope that they will not return. But to say that recent moderation in wage claims heralds a new cooperation is just self-deception. Market forces can curb wage claims in times of recession, but if an upturn comes then, as my noble friend Lord Scanlon warned from this Box recently, labour's turn will come and the force of labour will have been encouraged, by this doctrine of free-for-all, to start the biggest catching-up exercise that we have seen. The sad thing is that, in the market place where everyone gets what he can, it is not necessarily the most deserving or the most useful who do best.
Three things might fairly be said about the contentious problem of an incomes policy. First, if we are to secure a genuinely stable and civilised society some broad agreement on a national incomes policy is essential. Secondly, while it will be very difficult, in any case, to evolve a policy which would be both meaningful and flexible, it will be quite unattainable
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if the concept of market forces dominates all other activities. We cannot have one rule for wages and a free-for-all elsewhere. Thirdly, as Sidney Weighell put it the other day, we do not want a formula cobbled up in a crisis. So I am suggesting to this House that we agree that now is the time for seeking a consensus on a policy which can play a proper part in a wider policy, manifestly shaped for the common good.
Other figures, which Ministers have put out very assiduously, purport to show that costs of production are down and output per man-hour is up. I agree, again, that there are notable cases where productivity has increased. Down at Llanwern at British Steel, at Coventry at British Leyland and in Britain's coal industry there are examples to be quoted. Those are cases where large new public investment is beginning to pay off and we should all be pleased about that. But in the greater part of industry, there is not the money for new equipment: costs have been cut; research and development, on which the future depends, is the first to be cut; maintenance is delayed, training is curtailed and that much applauded de-manning is leaving a workforce that is not always properly balanced for future efficiency.
There was a very relevant letter from Mr. Whiting of the Manchester Business School in the Financial Times. The MBS knew of a firm which could show precisely that 7 per cent. improvement in man-hour productivity, which the Government quoted with such relish. But, said Mr. Whiting, these figures for man-hours actually worked were swamped by the fact that the company was working only 50 per cent. of capacity and overall productivity of capital employed had " slumped disastrously ".
" It is disingenuous ",
said Mr. Whiting,
" to pick out labour efficiency only, as a cause for rejoicing, when capacity working is a cause for greater misery ".
One might also say that it is equally disingenuous to boast, as Ministers have done in this last week or two, that short-time working has decreased, when the explanation often is that the short-time worker is now on the dole queue. It is only fair to add that, in the most recent Treasury report, the authors admit, though Ministers have not, that labour productivity is only one measure and not always the best.
To take another example, noble Lords opposite were cheering with less than their usual restraint the other day, when they were told how many new small businesses had been started as a result of Government action. They were, I fear, not looking at the facts either fairly or closely. The Daily Telegraph, on 22nd January, delicately phrased a rather fairer view. They said:
" That plank of Mrs. Thatcher's platform has a touch of woodworm ".
They quoted results from a survey which showed, said the Daily Telegraph:
" although new companies may be created at a record level, the recession has reached a stage where it is killing them off at a record level as well ".
The survey had shown that surviving companies had probably cut 800,000 jobs. Sadly, 44 per cent. of the survey said they would need to be cutting investment in 1982, and 9 per cent. said they would be selling out

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or closing down. Some market force over-enthusiasts may say that this proves the theory of the survival of the fittest, but a more objective view suggests that it is the slaughter of the innocents.
In that slaughter the use of one weapon has been tragically effective. I mean the high interest rate obsession. The noble Lord, Lord Cockfield, told us on 27th October of last year that interest rates " represent one of the major weapons in getting inflation under control I want to submit that this central feature, this major weapon, is now more of a cause than a cure of inflation. More than that: it is beginning to distort the shape and the structure of our society.
The certainty with which some authorities in the western world insist on high interest rates is I think equalled only by the certainty with which the authoritative Cadman Committee recommended our return to the gold standard in 1924. According to the Treasury, servicing the national debt in 1981–82 will cost £11,100 million, or 13·3 per cent. of all the Consolidated Fund expenditure. In 1980–81, debt interest payments are an estimated £4,363 million, or 16.5 per cent. of all local authority expenditure. Only last week a Treasury Minister said that gross debt interest now ran at £250 for every man, woman and child in the country.
Of course, some will say—some of my friends say —that as a proportion of the GNP the volume of the debt is less than once it was, and the Government themselves justify cutting essential public services and investment by talking of the need to reduce borrowing. But it is not borrowing as such that is wrong; it is not necessarily how much that matters, but what for, and at what rate. In 1946, after six years of desperate war, Britain was borrowing at 2·5 per cent. Today the Treasury commits itself to repay by way of interest the amount borrowed every seven or eight years, but the initial liability will still remain. All money now borrowed simply goes to pay interest on money already borrowed. Neither Governments nor businesses can face that situation for long.
In The Times letter column recently there was a cry from the heart of the chairman of the Council for Small Businesses in Rural Areas. Mr. Vincent said:
" Proprietors of small firms … are now using life savings [on which] they hoped to retire to service debt, and for all that they are sinking fast ".
I could, given the time, show that much the same can be said of some of the bigger firms as well. Useful industry cannot earn a fair return and provide a proper service if they carry an interest burden of the current order.
I have said that market forces in general and excessive interest rates in particular are distorting the shape of our society. I use the term " distorting " deliberately. Let me say why. At one time the skill and effort of the shop floor and the design office made all the difference in competitive pricing, but the present interest rate policy and the consequent movement of exchange rates mean that those efforts can be completely thwarted and can make all the difference to success in the export market. I notice that the Governor of the Bank of England was saying much the same thing last week.
At one time profitability came mainly from making
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and marketing goods, but today sophisticated techniques of using cash, depositing overnight or depositing on Friday afternoon instead of Monday morning can yield disproportionately high results and is diverting both skills and time. A farmer waiting one year for a return on his crops or three years on his cattle, or the manufacturer who may well have to wait five, seven or 10 years for a return on an investment are both grossly penalised if they have to borrow. In the world of double-figure interest rates it is the man who can make a quick buck, who can make a percentage point or two, who can move large sums of money around the world—they are the people who are being encouraged under the present system.
All that seems to be supported by what was said in the Treasury's monthly economic assessment last summer. They said that, while the undistributed income of non-oil companies fell by one-third,
" that reduction contrasts markedly with that of the financial companies and institutions whose undistributed income doubled within the same period ".
It is this distortion which gives us a society in which we need more houses, while half a million construction workers are kept idle and their families supported by Government money borrowed at 14 or 15 per cent. It is a society in which sewers are crumbling, in which we propose to cut grants to universities like Aston and Salford by as much as 20 to 44 per cent. while at the same time we sit back and wait for breakfast time television. It is a society in which we tell nurses that economic conditions will not allow more than a 4 per cent. pay increase while the Playboy chairman, I read, gets £200,000 a year and another leisure company is offering £¾ million to an executive to change his job. I do not believe that most of us in this House, or in the country, are content to let society shape like this. It is a society, again I say, in which there are 3 million people officially unemployed and, maybe, 4 million altogether, denied the opportunity of earning a living.
We have to reverse recent trends and increase the possibility of reward to honest productive endeavour. Lower, much lower, interest rates are essential. We should examine again and adapt techniques used in time of war for the creation and the direction of credit. Maybe differential rates have a part to play. If all this means controlling more effectively from the centre and controlling the movement of money in and out of the country, then so be it. Let us face up to it. If I am told that in these matters you cannot get around the law of supply and demand, then I would say that at one time we were told you could not defy Newton's law of gravity but the aeronautical engineers showed that we were wrong. Where there is a will, there is usually the way.
Then to restore the balance as between real needs and the candyfloss, I believe we must all accept that public investment and public enterprise has a part to play. In this area I admit at once that both sides of the political spectrum have to change old attitudes. I do not believe that nationalisation as such is some infallible formula. I do not accept that incentive and enterprise is best encouraged if it comes under the direct control of some Government department. A more effective system of employee participation and, where appropriate, consumer participation could prove more effective than prejudiced party exchanges in

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Parliament as a spur to efficiency. As against that prejudiced criticism, of which I complain, I would like to thank the noble Lord, Lord Cockfield, for his kindly personal references to me the other day on my contribution to one of the public corporations. But I recall with bitterness and contempt some of the things which others have said about those who have accepted responsibility in public corporations. I qualify that bitterness only because of the memory that in younger days, some of my criticism of those appointed to serve was equally ignorant. That ignorance cannot help constructive effort.
I am ready to accept that Mrs. Thatcher has helped many people to realise that there is not an unlimited source of public funding. When she emphasises that the public sector should not be a soft touch for the union negotiator, she renders a service. But if we are to get the social and economic infrastructure that we need in health and education services, and in such things as transport and communications, then public enterprise has a crucial part to play. If we are to get the pump priming which the private sector needs, then public investment is required.
In all this public activity I say again, we can surely exercise the necessary discipline without the sick and demoralising prejudice which calls all public investment a subsidy and all public servants a burden on the taxpayer. In the society of the future we shall need deliberately to encourage the full potential of public service. In the economic new deal which the situation calls for, the overriding and powerful incentive must be the feeling that one is helping not only oneself but the common good. That satisfying incentive is valid equally in the public as well as the private sector.
I have tried to set out some of the things which are wrong in our political and social policy. As a nation we have a lot going for us. The fashionable talk of long decline, in my view, has been much overdone. Since those days when the world maps in the school classroom were coloured one-third red, there is a lot that we have achieved. The development of North Sea oil is not a tale of decadence. The post-war growth of the gas industry is a marvellous story. No other major industrial country has our self-sufficiency in energy, and against all the financial frustrations no decadent industry could have maintained its export trade as Britain has done. We now need a new deal; a new economic deal and a new social purpose. That purpose must be enthused with something warmer and more human than the cold, crude, concept of market forces. I ponder over those words spoken in the Communion Service:
" Though we are many, we are one body ".
If we could get more of the real meaning of that into our affairs, then Britain—which led the way in parliamentary democracy—could yet show the way to the true meaning of economic democracy. I am grateful to your Lordships for the patience you have shown, and I beg to move for Papers.
3.24 p.m.
The Chancellor of the Duchy of Lancaster (Baroness Young): My Lords, we are all grateful to the noble Lord, Lord Beswick, for providing the opportunity to debate this wide and thought-provoking Motion.
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His Motion has three parts and I shall deal with each in turn as well as saying something about Government policy. The first part of his Motion implies that over-reliance on market forces has contributed to our social and economic problems today. I believe that in fact the very reverse is true. As a party we do not advocate, and never have advocated, complete dependence on the market. Indeed, it was the Conservative Party which, in the nineteenth century, was first to see the need to protect society from unbridled industrialisation. But we do recognise that it is the energy and innovation of the entrepreneur which has been the motive power of economic growth and the source of new jobs.
There are those who will argue that wealth can be created not by market forces, but by the state. But, my Lords, the state does not create wealth by itself. It distributes what others have produced. Indeed, the economy today is far from a free market economy. Let me name three constraints on the operation of a free market. The first comes from the trade unions. These are powerful bodies, uniquely privileged in British law. And there are many examples of the benefits they have won for their members. But their power has been all too often used to perpetuate over-manning and restrictive practices. It has been used to force pay settlements which have exceeded what the market could stand. The result, tragically, has been lost competitiveness, lost orders and lost jobs.
The second constraint on the market is the powerful position of large national and multi-national corporations. I would argue that so far as the private sector is concerned, the operation of the Monopolies and Mergers Commission adequately protects society from the dangers of abuse. In the public sector, society also needs protection from monopoly corporations. I suggest that these observations will command themselves most forcefully to those struggling to work today in spite of the strike of train drivers; and to those in the private sector who have lost their jobs because their companies had to compete in the deteriorating world situation and at the same time face rates bills, fuel bills, post and telecommunications bills which have gone on rising remorselessly.
But the major rein on the operation of market forces is that applied by Government. I have already cited the operation of the Monopolies and Mergers Commission; and one might well put in as well the protection of the environment. But perhaps the most important role which Government plays is in redirecting a large proportion of the wealth created in industry and commerce in order to pay for defence, law and order, health, education, social security and all the other functions of a modern welfare state. And we cannot escape the fact that the quality of our public services ultimately depends on the health of the economy—on the wealth earned by industry.
We have learnt from bitter experience that too heavy a burden of public expenditure damages profitability in the private sector and so reduces its capacity to finance those improvements in welfare which we all wish to see. It is not easy to face up to the painful reality that the creation of wealth must precede social improvements. I was most grateful to the noble Lord, Lord Beswick, for what he said at the end of his speech about this particular point, because I believe that it is

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a very difficult point for the public to understand. Short-term injections of money may give some temporary relief, but they can only postpone an inevitable and even harsher day of reckoning. This Government have had the Courage and wisdom not to practise such a deceit.
At the heart of Conservative philosophy is a desire to see all the people of this country better off, and to see the disadvantaged well cared for. We, too, want to see education, health care and proper housing denied to no-one. We want adequate defence and law and order on the streets; good roads and efficient railways. To achieve these aims we need greater public understanding of the realities of life and the support of all political and social groups to obtain a real and sustainable economic growth, so that we may achieve increase in the quality of our public services.
I turn now to the process of wealth-creation itself. There are many who will be speaking in this debate today and many outside who will argue that the state can improve upon the market in the efficient allocation and utilisation of scarce resources. I would argue, my Lords, that the facts do not support such a proposition. For example, since 1972 the real rate of return earned by the nationalised industries has never significantly exceeded zero. In some industries —coal, steel, railways—the return has been substantially negative; yet the nationalised industries account for over 13 per cent. of the total industrial investment in the United Kingdom.
In the area of industrial intervention in the private sector costs and benefits are even less clearcut. In the last decade, over £5 billion has been spent on regional aid to industry. Yet, sadly, the regions of the United Kingdom which were poorest in the 1960s are still the poorest today. The Government are devoting £3 billion every year to industry, including the nationalised industries. Much of this is into the traditional industries—cars, steel, shipbuilding—which have grown inefficient by being protected from the market. We are determined to turn these industries round. We are forcing them to compete. It was heartening to hear that Sir Michael Edwardes has announced that overmanning, so long inherent at British Leyland, will soon be ended; that last year productivity in the BL car division increased by nearly one-third; that BL is now, once more, in a position to raise private capital, and that next year the company hopes to break even. Productivity has also improved in many sectors of British Steel; output at the Llanwern plant is now equal to the best in Europe. These are the signs that, given sufficient determination, Government investment in the public sector can bring with it the discipline of improved productivity through competitive practices. These are hardly the actions of a Government committed only to the operation of market forces.
My Lords, the Motion calls for a more broadly based policy for national recovery than our own. This frequently means a call for more money, and indeed the noble Lord, Lord Beswick, said as much. Our national income measured in money terms is currently rising at about £25 billion a year. If we can make less of this pay for inflation and imports, more will go into output and jobs. We believe that it can be done. We must see wage and working practices decided
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by the discipline of competition. We must see demand boosted at home and abroad by customers, not by Government.
Recovery does not need devaluation. Today, the pound is 10 per cent. below its 1975 level, though manufacturing competitiveness has worsened by some 35 per cent.; the reason is pay settlements unmatched by productivity well above those of our competitors. When it plunged in 1976, industry did not become conspicuously competitive. We need to convince overseas investors that the British Government have a firm control over inflation. Only then will we have a stable currency.
Recovery does not need reflation. We do well to remember the words of the last Labour Prime Minister. He told his party in 1976:
" We used to think that you could just spend your way out of a recession by cutting taxes and boosting Government spending. I tell you in all candour that that option no longer exists, and that, in so far as It ever did exist, it worked by injecting inflation into the economy. And each time that happened, the average level of unemployment has risen. Higher inflation followed by higher unemployment. That is the history of the last twenty years ".
There are a good many people now who appreciate those words.
My Lords, real sustainable recovery is under way. It is painfully slow. It has to be. There are no quick and easy solutions to Britain's industrial problems. But it is worth remembering how often we have talked of the need for export led recovery. It has always eluded us in the past. Yet now the possibility is a real one. The volume of exports at the end of 1981 was nearly 4 per cent. higher than a year ago, and daily we hear of more large export orders being won by British companies. I commend to your Lordships the direct part which the Government have played in facilitating much of this improvement, by creating the climate for economic recovery.
Of course, the Government want to do all they can to mitigate the effects of distressingly high unemployment, both through direct measures and through the stimulation of the private sector. In the current financial year we are giving £3 billion to industry to assist in restructuring and the preservation of employment capacity. We have introduced 72 measures to promote small businesses as a major source of employment. The sum of £329 million has been spent on encouraging industry to adapt to and realise the full impact of new technology.
The particular problems of the young unemployed will be helped by the new Youth Training Scheme. Also the Youth Opportunities Scheme will guarantee every school-leaver a full year's foundation training. Together with the Youth Opportunity programme, spending on special employment measures and training schemes will be some £1½ billion in 1982–83. These are hardly the actions of a Government that would abandon the fortunes of their people to the forces of the free market.
Finally, I turn to the call for " consensus ". My Lords, I have sympathy with those who long for our country to unite in the face of economic crisis. The patience of the British people will be tried by the slowness of the upturn in our economy. Last to respond to the recovery, sadly, will be the unemployed. The unemployed pay the highest price for past over-

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manning and past uncompetitiveness. We are all concerned about this. But it is an international problem. Today in the European Community alone there are 10 million people without jobs. Across the OECD countries, youth unemployment is rising at twice the adult level. The United States, West Germany and Sweden are all contending with levels of unemployment which are rising faster than our own. The many and varied political beliefs and approaches to social and economic policy in these countries do not suggest that there is some broadly-based consensus which we could import to solve our economic difficulties. Neither do they suggest that Britain's unemployment problems are simply a domestic product of the policies of this Government.
Those who offer apparently simple solutions to our present economic difficulties do the cause of consensus very great harm. The noble Lord, Lord Beswick, talked of an incomes policy, but is there a fail-safe incomes policy which can win agreement from both sides of industry? Can central planning and controls on prices and imports do any more than inflict severe damage on industrial and commercial profitability? Could capital expenditure on employment schemes produce sustainable jobs without destroying the real sources of employment in the private sector? I do not believe that there is a consensus of opinion or a single untried solution among all these proposals.
What I do believe is that there is a need for a consensus of commonsense based on an understanding of the facts of economic life. I believe we are seeing signs of this understanding, with productivity rising strongly, the number of industrial disputes at their lowest level since 1941, and excessive wage demands being defeated by the simple commonsense which puts jobs before any short lived boost to the pay packet. We have come a long way and, having come so far, we must build on these achievements. It would, I think, be a mistake even to consider a return to the policies of the past, when we are still struggling with the consequences of their failure.
My Lords, I believe that there are real grounds for hope; not that everything can be put right immediately, but that we are beginning to see the signs of a reversal of Britain's slow economic decline. I, for one, would not be prepared to throw this away at this time; nor do I believe that the British people would want to do so, either.

The European Communities Budget 1982
3.40 p.m.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): My Lords, with your Lordships' permission, I shall now repeat a Statement being made in another place by my right honourable friend the Lord Privy Seal. The Statement is as follows:
" With permission, I shall make a Statement about the problem which has arisen because of the difference of view between the Council and the European Parliament on the adoption of the 1982 Community budget. When I reported to the House on 27th January about the meeting of the Council of Ministers
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on 26th January, I said that the Council had taken no final decisions on this matter. I am now glad to be able to report to the House that the Council has subsequently decided that it should institute proceedings before the European Court of Justice concerning this budget; that meanwhile member states will pay in full the sums resulting from the budget as adopted; and that the Council will open discussions with the Parliament and the Commission as soon as possible to resolve the problem.
" We hope that these discussions will succeed. At the same time, we have to protect our legal position, and ensure that, if an answer is not found by discussion, we shall have a ruling of the court. By far the best way of doing this is through an action by the Council as a whole. As some other member states were in fact willing to accept the budget as adopted, and were reluctant to go to the court, the presidency proposed, as a compromise, that the Council should take the matter to the court but that all member states should pay their contributions on the basis of the budget as adopted. We accepted this.
" Because, in our view, that part of the budget added by the Parliament after the second Budget Council on the 24th November was not legally adopted, we cannot treat it, as we do the rest of the budget, as a direct charge on the Consolidated Fund on the basis of Section 2(3) of the European Communities Act 1972. We shall therefore make a separate payment of our part of this extra sum (about £2.5 million per month). The authority of Parliament will be sought for this payment in a supplementary Estimate for the current financial year and in a main Estimate for 1982–83. Meanwhile the payment will be met by means of repayable advances from the Contingencies Fund. Once the issue has been resolved, preferably through discussions between the Community institutions, but, if not, through a judgment of the European Court, we shall know the amount which we are obliged to pay. We shall then either receive a repayment or be under a firm Community obligation to pay the full amount ".
My Lords, that is the Statement.
Lord Bruce of Donington: My Lords, we on this side of the House would like to thank the noble Lord for repeating that Statement so far as it goes. The Statement, of course, makes no mention of the principal points at issue. We do not know the full extent of the difference of view between the Council as a whole and the European Assembly and/or the European Commission other than through the reports, which may or may not be authentic, that have been put out in the national press.
As I understand the position—and I speak subject to correction by the noble Lord—the origin of this dispute between the Assembly and the European Council occurred principally because of the Parliament's insistence, in agreement with the Commission, on the non-obligatory nature of certain expenditure under Title No. 9 of the Commission's budget, as a consequence of which the total volume of what is called non-obligatory or non-compulsory expenditure in the year has been enlarged, and thus the application of the

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maximum rate of increase under Article 203 of the treaty has been correspondingly enlarged. I also understand that there is some dispute as to the amount of the Regional Fund.
I would therefore be grateful if the noble Lord could explain a little further what is the nature of the dispute. If it is over the question of the designation of food aid under certain items of Title No. 9 of the Commission's budget, I am bound to point out that under Article 155 of the treaty, the Commission is the custodian of the treaty itself and is required to ensure its compliance. I should have thought that it is not without significance that under Title No. 9 the various subsections that I think are in dispute have been stated quite clearly in the Commission's budget and in the explanatory documents and in the annexes to it over the last five years, as being non-compulsory without any query from the Council at all. So we are a little in the dark as to real nature and significance of the dispute.
In the meantime, I hope that the noble Lord will take into account that one of the basic reasons why members of his party—and, indeed, many of my own—advocated direct elections to the European Assembly was so that the powers of the European Assembly could in that way be legitimised. I sincerely trust—as, indeed, many of us do in this House—that no action will be taken that will diminish that particular sentiment which is held, I believe, very widely in the House.
Lord Gladwyn: My Lords, we, too, would like to thank the Minister for repeating the Statement. I should like to ask him three questions. In the first place, are the Government fully satisfied that it is legally in order for one institution of the Community to take another institution to the court? If it is in order, then can the noble Lord say or confirm that it would be in order, for instance, for the Parliament or indeed the Commission to take the Council to the court for not abiding by the terms of the Treaty of Rome? And if that happens, as I imagine it might happen, would the Government please tell us whether they would accept the verdict of the court? In any case, could we be told how many, and preferably which, members of the Council were prepared to accept the EEC budget as adopted by the Parliament?
Lord Trefgarne: My Lords, first let me say to the noble Lord, Lord Bruce of Donnigton, in thanking him for his acceptance of the Statement, that this matter is a very complicated one legally. As I understand it, in essence—and I confess that I come as something of a novice in these matters—the budget is proposed by the Council and may then be rejected in toto by the Parliament if they think fit; indeed, on one occasion a year or so ago the Parliament did reject the budget. In addition, at first sight of the budget the Parliament are entitled to propose, but not to insist upon, increases, and then in the last resort they are entitled to insist upon certain modest increases to the non-obligatory side of the budget itself. What has happened on this occasion is that the Parliament chose to propose an increase—a small increase over and above what is provided for in the treaty—to the non-obligatory side, and
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that was what caused the Council to take the view that they did.
In reply to the noble Lord, Lord Gladwyn, I would like to say that the purpose of the legal action is not to punish or pillory anyone, but to seek a declaration of the legal position with regard to the determination of the budget so that the Commission, whose job it is, of course, to implement the budget, can be properly advised.
Lord Taylor of Gryfe: My Lords, the Statement makes provision for the Government paying £2.5 million per month. The proceedings of the European Court have frequently taken a very long time. Can the Minister give us any indication of the time scale of these proceedings and what the total commitment is likely to be until the proceedings are resolved?
Lord Trefgarne: My Lords, as the noble Lord says, it is, of course, the case that the proceedings before the European Court are likely to take a very long time. I would not want to put a figure on it in terms of months or years, but certainly it will be a long time. The figure of £2.5 million per month equals, if my mental arithmetic is right, £30 million a year but, of course, each of the payments will have to be authorised by an appropriate estimate approved by the other place. However, I want to say that the Government very much hope that the matter can be resolved by discussion between the institutions before it comes to the European Court, and in which case, of course, the financial implications would be much less important.
Lord Shinwell: My Lords, can the noble Lord explain why this matter has been referred to the European Court? I was under the impression that the function of the European Court was to deal with the legal aspects. Is the European Court dealing with legal aspects, if there are any, or is it a court of arbitration? Is it to arbitrate as between the members of the EEC who are in dispute about the budget and about what each should contribute to the budget? Is it to act as an arbiter in the matter?
I should like to ask one further question. After all these years, we discover that they cannot settle a matter of this kind, about which the public must be wondering and, indeed, must be bewildered. Is it not about time that we were furnished with some information about the excessive expenditure of the EEC on the Commission, on those employed by the Commission, on all the directives that are undertaken and on the vast amount of paperwork in which it is engaged? Ought we not to have a little more information about that? Could not the Court of Justice deal with this question of excessive expenditure?
Lord Trefgarne: My Lords, may I deal with the first point raised by the noble Lord. As regards the matter on which the court will be asked to adjudicate in due course—if that is what happens, because, as I said, we hope that it can be resolved by negotiation before then—it will not adjudicate on the merits of the proposals within the budget, but upon the legality of them. The question that the court will be asked to decide is whether the Parliament is empowered, under the Treaty of Rome, to make the increase in the budget provisions

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which it made when the matter was before it recently.
As for the wider matter which the noble Lord, Lord Shinwell, raised about the budgetary dispositions of the European Community, I suggest that that is a matter for another day.
Lord Bruce of Donington: My Lords, in that connection, will the noble Lord confirm that all the documents enabling Members of Parliament—either in this House or in another place—to consider this matter are freely available by application to the Printed Paper Office on the various yellow forms that are sent out to every Member; and that the particulars in support of the items in the budget of the European Community are revealed on a far more significant scale and in much more detail than even our own supplementary estimates in the Parliament at Westminster?
Lord Trefgarne: My Lords, I am not aware of any problem in connection with the distribution of documents through the Printed Paper Office. If there is any difficulty, I shall certainly look into it. As for the difference between the detail put forward by the Commission and the detail put forward by successive Governments in respect of budgetary and other considerations in another place, that is perhaps another issue.
Lord Gladwyn: My Lords, perhaps I may repeat the question that I asked, to which the noble Lord, Lord Trefgarne, did not reply. In the Government's view, would it be legally possible for the Parliament to take the Council to the court for not abiding by the terms of the Treaty of Rome? If it did so, would the Government be prepared to accept the verdict of the court?
Lord Trefgarne: My Lords, with respect, that is a hypothetical question, and I think that it would be a mistake for me to offer a definitive legal view on a rather knotty legal point of that nature.
Lord Taylor of Gryfe: My Lords, I apologise for delaying the House, but I did not hear the reply to the point raised by the noble Lord, Lord Bruce of Donington, as to the difference between the budget as established and the budget of the Parliament. Is that quantified? What is the difference between the budgets, and will the payments of £2·5 million per month be limited to that particular amount?
Lord Trefgarne: My Lords, it is, I think, a fairly simple mental arithmetic exercise to arrive at the answer for which the noble Lord is looking. Despite that, I am afraid that it is beyond me, on my feet at this moment, but I shall ascertain the total figure involved and convey it to the noble Lord, if he will allow me to do so.
However, the point at issue—if I may amplify what I said to the noble Lord, Lord Bruce—is that the Parliament, I think in conjunction with the Council, is allowed to increase the non-obligatory part of the budget by a total of just over 20 per cent. It has chosen to do it by a fraction more than that, at least in our view. It would naturally disagree with that, because I think there has been some discussion as to quite what constitutes a " non-obligatory " item in this context.

The Economic Situation and National Recovery
3.57 p.m.
Debate resumed.
Lord Rochester: My Lords, perhaps it would be for the convenience of the House if we now resume our debate. From these Benches, I should like to join in thanking the noble Lord, Lord Beswick, for having introduced this Motion and, in doing so, to give him a large measure of support. Next, I must apologise to him, to the noble Lord, Lord Cockfield, and indeed to the House in general, for the fact that I shall have to leave before the end of the debate in order to fulfil a long-standing engagement elsewhere this evening. I think I can claim that this is the first time that I have misbehaved in this way, so I hope that for this once I may be forgiven.
I was perhaps a little disappointed that the first phrase of the Motion in the name of the noble Lord, Lord Beswick, was couched in somewhat negative terms, because in my experience if you seek a consensus, it is best, not so much to emphasise the differences, as to identify and build on areas of agreement. If that is not done, then those perceiving themselves to be under attack immediately attempt to hit back, and, in her charming way, that is what the noble Baroness the Leader of the House was doing just now.
I should perhaps begin by reminding the House that Liberals start with a certain predisposition in favour of competition and against monopolies. Having said that, we also believe that in the complex international society in which we live it is no longer sufficient simply to create what may be thought to be a fitting climate in which industry can flourish. In our view, there is also need for the Government to have a positive strategy which, as resources permit, aims to encourage the growing points of our mixed economy, as Governments do in successful industrial countries such as West Germany and Japan.
I of course recognise that it is not easy to develop such a strategy. In the essential restructuring of our basic industries, to which the noble Baroness referred—industries such as steel, shipbuilding and motor manufacturing—scarce resources are used up and employment problems arise. Indeed, perhaps here it is pertinent to recognise that for the foreseeable future. whatever the political complexion of the Government of the day, these problems of human and financial resources will remain, and we might as well all acknowledge that fact.
It is not customary to mention Members of another place by name, but I should like to add that for my part I admired the Lord Privy Seal for having the honesty the other day to spell out what this means in terms of jobs and living standards. If as a nation we continue to award ourselves increases in pay which grossly exceed improvements in productivity, so much the worse will it be for us all.
My Lords, one of the most damaging features of the last 35 years has been the absence of continuity in national economic and industrial policy exhibited most clearly by the incessant battle between socialists and the adherents of so-called free enterprise. My

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party—perhaps here I may speak also for Social Democrats within our alliance—would like to see much less time spent on squabbling as to where the public sector should end and the private sector begin and more on making the first more efficient and the second more profitable.
That anyway is at the heart of the work of the joint commission which has been established by our two parties to study problems associated with employment and industrial recovery. I have a great respect for the firm of Marks and Spencer, led by the noble Lord, Lord Sieff, not least because of the attention that that company pays to human relations in their successful day to learn that they have given £5,000 to help finance the work of the commission to which I have just referred, despite the fact that I understand that they also subscribe indirectly to the Conservative Party. This seems to me to be an excellent example of practical support for work directed towards the solution of industrial problems irrespective of party political considerations, and in my view the country could do with a lot more of it.
In the debate on the gracious Speech last November I said that it was,
" our greatest national need that ground should be marked out on which people of any political persuasion and of none can come together in a common endeavour to solve our problems ". [Official Report, 11/11/81, col. 250.]
That is easily said, but on what basic objectives can we agree? I should like to suggest three which may commend themselves, I will not say to all noble Lords but at least to many irrespective of where they may sit in the House. The first is to control inflation; the second, by improving our productivity, to become more competitive; and the third to find new and constructive job opportunities. In discussing the measures needed to achieve those ends, we shall then, to some extent, have to part company, but not perhaps as much as might at first sight appear.
For example, in relation to the need to control inflation I was delighted to hear what the noble Lord, Lord Beswick, had to say on the subject of incomes policy. Incidentally, there are certain phrases which, in the interests of seeking consensus, I try to avoid. One of them, if I may digress for a moment, is " industrial democracy " because of its connotation with the ill-fated Bullock Report and the concept of workers' control. In my view the words " employee participation " are much to be preferred, and sometimes they even produce smiles on the faces of noble Lords opposite.
In the same way I endeavour, but I am afraid sometimes forget, to talk of the need not for an incomes policy but for the establishment, after appropriate consultation, of long-term arrangements for pay determination that are widely understood and accepted. I know that that never seems to cheer the noble Lord, Lord Cockfield, up very much, but it does ring a bell with certain members of the CBI and with so-called moderate trade union leaders. However, I will not pursue that matter further now, for your Lordships will be all too familiar with my views on the subject.
Even in the controversial area of the extent to which the law should play a part in the regulation of industrial
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relations, there are points on which many of us may be able to come together. For example, in the debate on the gracious Speech I warned the Government that in my view they would be most imprudent at this moment to mount any general attack on the immunities that trades unions have from being sued for damages. It is plain from the Employment Bill that has just been published that no such general attack is now contemplated, and for that at least I am grateful. For my part, I would have been happier if, before the introduction of further legislation of this kind, more time could have been given to see how the 1980 Employment Act was working out in practice and only then to remedy any remaining abuses that had been clearly identified.
My fear is that the Bill will do nothing positively to improve our industrial relations but may instead prove a happy hunting ground for mischief makers. Of course, when the Bill eventually comes to this House we, on these Benches, will endeavour to treat it in a balanced way, but in my view it is a matter for regret that it is likely to hinder more constructive developments that would now be opportune and indeed are sorely needed in this field.
For example—here I am looking for support particularly from the noble Lord, Lord Jacques—has not the current rail dispute clearly demonstrated the urgent need for an agreed code of practice aimed at achieving the more widespread introduction of negotiating procedure agreements, under which all disputes concerning the interpretation of existing agreements would be settled in the last resort not by conciliation that merely splits differences but by arbitration that both management and trades unions would agree in advance to accept?
This leads me to reaffirm that, in my view, the more broadly based policy for national recovery and the wider consensus of opinion sought in Lord Beswick's Motion will be achieved only when enough people have gained a shared understanding of the effects of alternative uses to which money is put, and the relationship between productivity, investment, pay, prices and employment. If I may say so, it seemed to me that this was largely what the noble Baroness, Lady Young, was herself saying, and I am glad on that point to agree with her.
But beyond that I continue to feel that our economic and industrial problems are now so deep-seated and so intractable, and the measures needed to solve them will prove so painful and so controversial, that they can be tackled successfully only when elements in all the major political parties are prepared to confront them together. That is surely the message which for some years now, but especially in the last few months, the British people have been trying to convey to us as party politicians. Who knows; the outcome of the next general election may show that they have at last succeeded. If so, I for one shall be delighted.
4.10 p.m.
The Lord Bishop of Lincoln: My Lords, I appreciated much that was said from both sides of the House by the noble Lord, Lord Beswick, and the noble Baroness the Leader of the House. When I was an industrial chaplain and in daily contact with people at all levels of factory life, I found I needed to coin for myself a definition of the word " justice "—because it was too

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abstract a word—and the definition I coined, and I think I would still stand by, is that justice means taking everybody's interest seriously, so long as you mean everybody and so long as you mean seriously.
It seems convenient for there to be some interests that one does not have to take seriously—because they do not have a voice or power—and that gives one elbow room, and in the short term being able to bypass those interests may seem to have results which are effective and efficient. But in the long term it is probably immoral and certainly inefficient because that sort of short-circuiting of interests always comes home to roost; they have a voice and they find power. I should have thought history showed that to be so, the history of industrial relations, race relations and north-south relations, let alone the history of every revolution that has ever happened.
In our national struggle for survival, I believe that in the short term we are tending to lose sight of that principle—of the need to take everybody's interests seriously if in the long term we are really going to survive—and my motive in speaking today is primarily not political; I want to think it is ethical, though I would be the first to recognise that the two get totally mixed up. If there are any principles that we can look to in order to get somewhere near something like the good life for our society, then ethical principles obviously come into the debate, and certainly seem to me to have a place in today's debate.
I wish to make three points. The first, is that taking everybody's interests seriously means that those concerned must do just that; they must maintain contact and have communication with one another so that they can hear each other, listen, talk, argue and negotiate with each other and the rest. That is how we take other interests seriously, by recognising that they are there and that they have a point. The extent to which that is not happening at present between the Government and the trade unions seems to me to be very serious indeed. It is serious for the country that such a gap as seems to me to exist should be allowed to develop. Something must be flying in the face of justice in those terms whenever a Government feel they must adopt a policy that is so extreme as to make conversation virtually impossible with a large section of the community. Whenever that happens, and I think it is happening at the moment, it must be going strongly against the grain of what actually enables a society to tick.
It can happen the other way round. Certain trade unions also can get out on a non-communicating limb. And, indeed, the public as a whole—public opinion, including the opinion of the Churches—often withdraws from political conversations into confusion and apathy. All those things are dangerous and damaging to our society, and the present Government have some responsibility for trying to bridge a serious gap which has grown up in the respects r have suggested.
The other two points I wish to make relate to unemployment. First, it is obviously understandable for a Government, when faced with an extreme crisis, to feel they must inflict pain on some to get out of that crisis. There is nothing new about that. But surely a Government so placed, if they are to get their politics right and do not struggle to get just the economics right, must do something for those who are most hurt.
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I have no doubt it can reasonably be said that the inefficient, the over-manned and those who resist necessary change, and probably others, need to be " hurt " because of the damage they are doing to the economy. But I believe that millions are being hurt who have done nothing to deserve it, and indeed have done everything to deserve a fair reward for sometimes a lifetime of honest work, with too little being done to relieve the pain they are having to feel.
I have in mind the ending this year of earnings-related unemployment benefit and the fact that the long-term supplementary benefit rate for sick and disabled people is 25 per cent. above the ordinary rate, yet unemployed people—who are, after all, suffering from a social sickness and disablement as great as any—remain on the ordinary rate. No doubt things can be said to counter that for certain categories, but it is the symbol of that that matters, the symbol of apparently not seeming to mind; and the Government need to look at the symbolic effect of some of the things they are sometimes not doing.
Of course, I am aware of the big new training initiative which the Government have started as an attempt to meet the pain and pick up the wastage among one section of the unemployed, and I greatly welcome it. The young catch everyone's imagination. The imagination is less sensitive for the 45-year-old low paid, unskilled, manual-working married man for whom the hoped-for recovered economy will probably not provide a job. The Manpower Services Commission Blueprint for Training certainly recognises the training needs not just of the young but of the long-term older unemployed also but its scales are not tipped greatly in the latter's direction. It is worth noting that remarkable things can be done in terms of retraining unskilled manual workers who are not young men.
My third point relates to that. If we are to have 1 million or more long-term unemployed for some time, then we are in a new game, a new society, altogether. So far, I see that the only thinking being done is that which belongs to the society we have been used to since 1945, thinking that belongs to cyclical rather than structural and long-term unemployment. If we are to take everyone's interests seriously, we must think in new ways with new imagination and with a new recognition of new moral priorities. I plead with the Government to put some real political horsepower behind this and to think long term and new, and especially to think in some detail about the huge range of work of, I suppose, a service nature of one sort or another that clearly could be and needs to be done if we had the finances to finance it.
I plead with management and trade unions in industry to see here a quite new motive for being far more urgent and morally responsible in sorting out their industrial relations problems and getting on with their job of production so as to create the wealth on which any extension of service industry must depend. In the end, it is only the employed who can come to the rescue of the unemployed; and Government, Parliament, management, trade unions and public opinion, including the Churches, must create and sustain a context of urgency to press and support them in their task.
In his remarks, the noble Lord, Lord Beswick, quoted words from the Prayer Book, and he showed

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how progressive he is by quoting this from the Alternative Service Book:
" Although we are many we are one body ".
He did not finish the quotation, which continues:
" Because we all partake of the one bread ".
It is that which we have not got right yet, and for which we must work.
4.19 p.m.
Lord Harris of High Cross: My Lords, I join with other speakers in congratulating the noble Lord, Lord Beswick, not least on the moderate-seeming terms of his Motion, which although presented as a call for Papers, was really in some ways a call for Mrs. Thatcher's head on a platter. I am afraid that I must start by expressing my regrets that the nearest thing that I personally face to a three-line whip requires my attendance at a meeting of the Political Economy Club later this evening, which means that I shall probably miss what might prove to be the bitter ending of this debate.
I should like, in a short space, to try to explain in very general terms why I profoundly consider that Her Majesty's Government are so far from deserving the well-worn strictures as a band of extremists hell-bent on turning the clock back to the heyday of 19th century liberalism. I believe that these charges show the danger of politicians being mislead by their own rhetoric, and sometimes by the rather robust rhetoric that we have from some members of the Government.
Over many years we heard a popular fiction, which the noble Lord, Lord Rochester, touched in his gentle way, a fiction especially dear to Liberals and Social Democrats: that since the war public policy has oscillated between the opposing poles of two distinctive ideologies. From where I sit on the Cross-Benches, it seems nearer the truth that, in the balance between market and Government, the pendulum that we used to hear about has increasingly been replaced by the ratchet.
Since 1945—I would argue in many respects since 1906—party politics have seen a cumulative, if you will, a progressive, shift away from the dispersed initiative of ordinary people in the competitive market, and towards an increasingly centralised direction of bureaucratic control and pervasive state power. To my imagination politicians often seem like mediaeval knights, with multiplying bands of retainers, all clad in such a weight of armour as to be deprived of the flexibility necessary for effective action. Thus in office they appear to wield great power, and yet so often in practice have proved impotent to achieve their most basic aims.
I think it right that this House should pay attention to the wisdom of the past, and therefore I bring your Lordships some words written more than 200 years ago by Adam Smith, in which he warned politicians against excessive intervention, in attempting which he said:
" they must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient … ".
On this issue of the general superiority of the market it is not sufficiently understood that Keynes was more
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frequently in some agreement with his classical forebears. Significantly for this debate in 1926 he wrote an essay entitled, The End of Laissez-faire, in which he stated:
" Capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative yet in sight ".
That was in 1926. Lest it be thought that his General Theory changed all that, I should like to quote from his great work in 1936, when he wrote as follows:
" The advantage to efficiency of the decentralisation of decisions and of individual responsibility is even greater perhaps than the 19th century supposed; and the reaction against the appeal to self-interest may have gone too far ".
If that were true almost 50 years ago, how much further have we now strayed down the wrong road? So I would ask: where is the excessive reliance on market forces that haunts the Labour Benches? Take the labour market. It is perfectly true that the ending of prices and incomes policy has permitted much more flexibility for managements and men to adapt to changing economic realities. But there remains a fearful incubus of trade union monopoly power and legal privileges, added to what now appears the hollow mockery of employment protection, wages councils, rent controls, and, above all, the confused and conflicting operation of high taxes, social benefits and all kinds of subsidies that make it profitable for thousands of people to choose unemployment rather than work.
On top of all that, approaching a third of the entire labour force is locked up in the public sector. They are tucked up in the public sector—not tucked up in bed—but they are certainly mostly cushioned from the invigoration of market forces, and we know the results for over-manning and inefficiency are increasingly visible and indeed widely acknowledged. Before the eruption of Mr. Wedgwood Benn, the Labour Party saw itself essentially as a moderate movement. Yet by 1979 it had brought about far more extensive nationalisation in Britain than applies in such model social democracies as Sweden or West Germany.
I want to concede that the essence of a market economy is not simply the private ownership of industry, as some of its defenders imagine. The essence of a market economy is that production is guided by competition between alternative suppliers to serve the changing demands of consumers at home or abroad. The real fatal flaw of nationalised industry is that Governments, for political expediency, seek to shield it from competition, knowing that the domestic consumers or taxpayers can always be made to pay, no matter how high costs may rise—
Lord Raglan: My Lords, will the noble Lord permit me to ask a question? How is it, in his opinion, that the Renault car company in France—which I suppose is one of the best run motor-car companies in the world and the most profitable—works so well, even though it is nationalised?
Lord Harris of High Cross: My Lords, the Renault company is pressed into service very frequently, and I would advise the noble Lord to go to France and discover that they manage many of their arrangements

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far more effectively than we have been able to do. I believe that there is much less of the prejudice that has developed in this country as a result of the Labour Party's perpetual denigration of private enterprise.
The contrast between public and private industry stands out more starkly today than ever before. At a time when private industry—as the noble Lord has acknowledged—has been compelled by the hated market forces to transform productivity, we see a lagging performance in many of the nationalised monopolies; I would say in railways, coal, and postal services—and as a matter of fact I am not enamoured of gas and electricity. An instructive contrast is that where even a nationalised industry is faced by market forces in the form of foreign competition—as in steel, motor cars, or shipbuilding—determined management has been able to achieve some of the glittering prizes being won by private industry.
I readily agree with the critics here and elsewhere who say that market forces do not operate with anything approaching perfection. But I would strongly argue that the well-intended effort to remove every blemish has invariably led to a far worse situation. In a fastidious endeavour to cure a skin rash we have spread a bubonic plague of bureaucratic regulation into every crevice of the economy. One result at the end of the day is a standard tax rate, including national insurance, of 40 or 50 per cent. on wages as low as one third of average earnings. A quite different kind of outcome, which we shall witness in this debate through the early evening and perhaps into the night, is the politicisation of every aspect of economic affairs, with increasing contention and bitterness which in the world outside has led to a declining respect for politicians and indeed for the law. Of course, it is true that the market economy requires a framework of law for its operation, but that is a far cry from the present legal straitjacket into which it is clamped in so many respects.
I therefore conclude by saying that if the Social Democrats really want to break the mould they might start ostentatiously by burying the old consensus that has got us into so much difficulty. They might then join the intellectual vanguard of economists and others, including many disillusioned socialists, who are endeavouring to redefine a new public philosophy of limited but effective government that works with the grain of market forces. My Lords, market forces are only another way of describing ordinary men and women as consumers and producers, co-operating in competition to their mutual benefit. When noble Lords are not in this House to tell us about the cold and crude concept of the market, they go about their business as part of these market forces outside.
I conclude, so far as the Government are concerned, by urging them to continue moving more decisively towards the market, which is not only most fully consistent with individual freedom and responsibility but, as a direct consequence, offers the best springboard to lasting economic recovery.
4.31 p.m.
Lord Kaldor: My Lords, I, too, should like to begin with an apology that owing to a long-standing engagement I shall not be able to be here if the debate lasts until eight o'clock or longer, as it looks to me now, with the number of speakers, it well might. I should
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like to say that it was a pleasant surprise to me to hear such a moderate speech from the noble Lord, Lord Harris of High Cross, whom I expected to be anything but moderate. He declared that he is not a follower of 19th century liberalism; he admitted that markets are not perfect; and he admitted (if I heard him aright) that there are some things at least that the state can do better.
In that way, I think he was in line with the great economists of this country in the 19th century as well as in the present century. He quoted some remarks of Keynes in favour of the market mechanism. I could quote many other things by Keynes in a different direction, but I should like to quote the greatest of English economists of the late 19th century, namely, Alfred Marshall, who went out of his way to demonstrate that the doctrine of maximum satisfaction—which means that leaving things to the market leads to the best solution—is not true without strong qualifications. His greatest pupil in Cambridge, Professor Pigott, devoted his whole life to exploring the qualifications and the limitations of that doctrine in a systematic manner.
All I can do today is to illustrate by one or two examples how market forces can produce the worst results even in respects in which they are expected to produce the best results. The clearest example which springs to mind is what came to be called some 10 years ago the Dutch disease. I am not referring, of course, to the disease of elm trees, which is no doubt familiar to many of your Lordships. I am referring to the unfortunate and wholly unexpected consequences of the discovery of a great deal of natural gas under the sea near Groningen. On any rational grounds one would expect that this discovery would have been a great boon to Holland, just as the discovery of North Sea oil was supposed to have been a great boon to Norway and to Britain.
However, the reality turned out to be quite different. Gas was a new, additional source of income which added greatly to Holland's exports—90 per cent. of it was bought by other countries. But these exports had to be paid for, which made the guilder a highly-sought-after currency, driving up its value in relation to Dutch industrial costs sufficiently to make it possible for foreign countries to pay for their gas by increased exports to Holland and reduced imports from Holland. So the market mechanism, which automatically tends to bring exports and imports into balance, automatically also causes an improvement in the energy balance to be offset by a corresponding deterioration in the balance of trade in manufactured goods.
As a result, from 1965 onwards Holland experienced rapid de-industrialisation—even more rapid de-industrialisation than we are experiencing today—and industrial employment fell by 30 per cent., having risen substantially by 2 per cent. a year ever since the end of the second war. The result was that the growth of the national income, the growth of the GDP, very much slowed down. It was growing less fast than before gas was discovered. The huge income from gas served as a substitute for other sources of income—and an inferior substitute, to boot—and not as an addition to other sources of income, which it should have done. And since gas production, unlike manufacturing, requires

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hardly any labour, Holland became a country of heavy unemployment and declining real wages.
Many of us were afraid that we should catch the Dutch disease right and proper once North Sea oil came on stream, and that is precisely what happened. In terms of real GDP, oil brought no net benefit at all to this country. As the value of oil production went up, so the value of manufacturing production went down. Employment in manufacturing industry alone fell by 3 million—from nearly 9 million in 1965 to just under 6 million in June 1981, and it may have fallen by another 150,000 to 200,000 since. Manufacturing output, which reached its peak in 1973, has since fallen by 17 per cent.
All this is due to the same natural tendency of the free market to substitute one source of production for another, even if the new source is more in the nature of a new inheritance—something which in a properly functioning economic system should be a net addition to wealth and not, as in the British case, the cause of a net reduction. Given the fact that there was nothing that would expand total demand in line with the increase in productive potential which occurred just when a socialist Chancellor thought that an expansion of demand is the very devil, the net result of the oil and gas discoveries in Britain, just as in Holland, was that in the field of manufactures less and less was produced at home and more and more was procured from abroad.
That this sort of thing is not inevitable but simply the result of bad government—and I do not mind whether it is a bad Labour government or a bad Tory government; unfortunately, in this country we have had both—is shown by a comparison with a third country, Norway, which is governed on Keynesian principles and not on Thatcherite principles. Oil and gas loom far larger in the economy of Norway. The gross value of their oil and gas production is equal to the value of the whole of their manufacturing output, which is about 25 per cent. of the GDP, whereas in Britain oil and gas production together is, I think, around 6 or 7 per cent. of GDP. But, whereas employment in oil production is less than 0·5 per cent. of total employment, employment in manufacturing in Norway is 20 per cent. I suppose the propagandists of the present Government would say, " Hooray!—productivity in oil or gas is 40 times as high ". Output per man is 40 times as high in oil as it is in manufacturing—just because oil does not require labour, or requires very little of it.
Despite all this, thanks to a devaluation of the kroner (which the Government carried out in face of a very strong balance of payments and of strong currents driving up the kroner) and then to its subsequent maintenance at a low level in relation to costs, through extensive market intervention by the Norwegian Central Bank, in Norway manufacturing output and employment were maintained. Now at 2 per cent., Norway is the country with the lowest unemployment in Europe, if not in the whole world. It is only slightly exceeded by Austria which also kept unemployment very low as a result of a Socialist government in contrast to the high unemployment of right-wing governments.
Norway's example shows that there was no need to
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undergo the miseries of de-industrialisation or having millions of unemployed. All that it was necessary to ensure was that effective demand was high enough to utilise the available resources to the full—and the available resources were enlarged by North Sea oil and gas. That simple proposition no one in Whitehall could understand.
What we should do if we were rational and clever would be to build up our export capacity in manufactures by a large-scale industrial investment programme, a major programme of industrial regeneration and modernisation, organised from the centre, on much the same lines as in Japan. The central Government there organised post-war industrialisation. Investment was carried out in businesses run by private enterprise, but the whole thing was planned by the Japanese Government. Private industry without central planning (what the Japanese call administrative guidance and direction) cannot be expected to undertake this. On a narrow view, it does not appear to be a profitable thing to do. But the interests of the nation and of the shareholders of the companies are not identical; or, rather, they do not appear to be so. Each company acting separately and individually may be justified in thinking that a major programme of modernisation and capacity extension would not pay. It would be throwing good money after bad. But, if all companies undertook such a programme simultaneously, they might well be justified in terms of profit as well as of a higher and more secure employment in the country and a higher real income for the nation as a whole.
Moreover, our own problem of expanding and modernising our export industries is far more urgent than that of the Norwegians. Norway's proved oil reserves are sufficient for a hundred years to come at the permitted maximum output of 75 million tonnes a year—which they do not expect to reach until 1990. Some Norwegian oil experts say that since the greater part of the Continental shelf has not yet been explored, oil might last for another hundred years or even longer.
But this is not true with us. Our own oil reserves are expected to be exhausted somewhere in the early decades of the next century. Therefore, it is far more important that we should have something to replace oil in order to pay for our imports. That is to say, we should use this time when we could afford to build up and modernise our export capacity.
I have given but one example of the general proposition that you cannot rely on market forces to generate sufficient demand which alone can ensure the optimal use of resources. This is one thing that the markets cannot do. Nor can you rely on the foreign exchange market to secure a satisfactory balance of payments. Anyone who listened to the speech of the noble Lord, Lord Soames, in the debate in this House last week will have been convinced that, in the matter of foreign exchange, reliance on market forces is a total absurdity. Another major respect in which we cannot rely on market forces—and this is the last point that 1 shall make—concerns the stability of wages and prices. The present Government regard price stability as the supreme objective of national policy. Whether they are right in this—to give inflation or the absence of inflation such a high priority—is a matter of argument But, whether the priority is high or low, they haven't

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a clue of how to achieve it. They have an id¹e fixe, which perhaps is not as widespread now as it was a year ago, that in some mysterious fashion, which is completely unexplained, it will come about automatically through control of the money supply. In fact, as experience has shown, they cannot control the money supply. I am sure it would not have made any difference, even if they had succeeded.
The only way to make some real sense of their policy—one cannot assume that one's masters are half-witted—is to suppose that they believe in the curative powers of unemployment; that, if you create enough unemployment, the working classes will be hungry enough and the trade unions will be weak enough not to have strikes, not to have absenteeism or recalcitrance, and not to have wages rising faster than productivity. The example of ASLEF in the last few weeks has shown that 3 million unemployed are not nearly enough. It may need unemployment up to 5 million or 6 million to reduce the working classes to that state of obedience. And what a waste! What a lot of contrived misery on the large majority of the nation that depends on work for earning a living.
All this is because the Prime Minister and her friends are ideologically opposed to controls. I am convinced that their policies will fail. In our present era, the late 20th century, inflation has become endemic to the capitalist system. It is present in all capitalist countries and, moreover, it has now spread to communist countries as well. It cannot be got rid of without a consensus policy on income distribution which allows effective and comprehensive controls over prices and wages. The noble Baroness, Lady Young, said quite a lot about how impractical this was; but she did not tell us what her alternative is or whether she has an alternative.
My Lords, a final area in which it is hopeless to rely on market forces is foreign investment. This is only an aspect of the more general issue of whether private profitability is a good or a bad guide to national profitability. It may be profitable for a British or a multinational firm to transfer its activities abroad where labour is cheaper or the exchange rate more favourable; but it is against the interest of the nation as a whole. The Chancellor of the Exchequer in another place the other day argued against the view I have just put forward by saying that, if we controlled outward investment, we could not expect to get the benefit of inward investment. What he did not say was that this is a poor argument because United Kingdom investment abroad in manufacturing industry is 10 times as large as foreign investment in Britain; so that we do not get benefits from foreign investments which are comparable with the losses to Britain through investing abroad rather than in this country.
In other words, to restore the British economy, and with it the health and morale of the nation, we must adopt policies to look after both the supply side of the economy—that is, the capacity to produce—as well as the demand side. The present Government, with their blind faith in market forces, disclaim responsibility for both.
The papers are full this morning in trying to puzzle out the meaning of the Lord President of the Council's extremely pessimistic speech two days ago. Some say
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that it was to support the " wets " in the Cabinet and in the Tory Party and their call for a more expansionary Budget. Other papers say that, on the contrary, he was warning the country that we must tighten our belts much further—thus really supporting the very " dries ". My own explanation is much simpler: he was just describing what would happen if Mrs. Thatcher were re-elected for another five years.
4.51 p.m.
Lord Taylor of Gryfe: My Lords, I should like to apologise to the House for the fact that I must leave tonight by 8 o'clock. If the debate goes on that long I will for the first time in this House—like the noble Lord, Lord Rochester— have to exercise this discourtesy which I do not normally apply.
I should like to congratulate the noble Lord, Lord Keswick, on the temper and content of this speech. If that were the Labour Party policy some of us might not be on these Benches. The speech which he made this afternoon is much at variance with party manifestos and with some of the speeches that have been made in the past few weeks in another place. So I support him wholeheartedly in the Motion which he has put down. I condem the over-reliance on market forces. I support a broadly-based policy for national recovery, and we on these Benches with our friends in the Alliance hope to establish a national consensus on policies that will lead to economic recovery.
I travel almost every day past Linwood. It is a ghost city; it has something like 35 per cent. unemployment. There is a larger car factory nearby which is empty and the contents have just been sold off. The unemployment in Linwood comprises not only the young people who have left school, but the 40 and 50-year old men who have been discharged and see no prospect of further employment.
When there is unemployment to that extent in other parts of the country as well as in Linwood people begin to call the whole system in question. As a very young man, in 1932 and 1933 I lived in Germany. They had a situation in which there were some 8 million unemployed. The people began to say: " If this is what Weimar democracy means, then we need a new system ". It was not simply a new Government but a new system. I believe that if unemployment goes much higher more and more people in the country will be calling in question the system on which western democracy has been built.
It is for that reason that I joined the Social Democratic Party, because it provided some alternative to the doctrinaire views of Right and of Left. But time is running out. If we can get a broad consensus, not totally committed to any party doctrine, we may still save ourselves. The alternative is the system enshrined in Clause 4 of the contribution of the Labour Party, of general common ownership of all the means of production.
The example of countries which have applied that principle are not encouraging. Poland is perhaps the greatest example of a totally controlled state economy with its consequent lack of growth, its consequent centralised bureaucracy and, finally, its destruction of personal freedom. In the present situation we all have a responsibility for working out some kind of alternative basis for our society.

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It will not be cured by an over-reliance on the market forces. It will be cured by clearly defining the duties and limits of the state, which are twofold: one, to ensure that the state sector, which will always be a large part of our total economy, is efficient, well run and sensibly financed. Secondly, it will require to create the climate for economic growth in the private sector. That is where the real growth and the real dynamism should lie.
In our case we can do this in a number of ways—a large variety of opportunities for state intervention. But we must always be careful to limit state intervention and not dominate the economy with state direction. I hear people talking about the state directing investment of bank and pensions funds, for example. I regard that as a very dangerous doctrine, as well as endangering the prospect of pensioners who might have entrusted their savings to their pensions funds.
That was the only part of Lord Beswick's speech where I felt that he was less than fair—in his strictures on the financial institutions which conduct useful and profitable financial management to the advantage of the invisible exports of the United Kingdom. The state has a responsibility for establishing the conditions for growth. This can be done in a number of ways. For example, the rate of depletion of North Sea oil—which makes a massive contribution to the Treasury revenue today—is an important factor in controlling the exchange rate and interest rates. If we develop a substantial balance of payments surplus based on a rapid depletion of North Sea oil, that will have unfortunate consequences for interest rates and make business more difficult. That also applies in relation to the exchange rate.
In determining the interest rate one has not complete power. Very often the interest rate will reflect the world situation and world competition for money. Certainly the high interest rates of the United States are disastrous at this moment from that point of view. If we can induce our allies in the United States to bring in more sensible interest rates, it will certainly help the conditions for economic growth in this country.
We should try to create a climate for growth not only with incentives but in the financial field, exchange rate and interest rates. This has consequences, as I say, for North Sea oil and the effect on the balance of payments. Regional policies are another area in which the state has a valid role to fulfil, to ensure the maximum use of our national assets. Mergers and monetary control to ensure competition is another area on which the Social Democrats agree. We have to have a degree of free competition in the economy in order to generate efficiency and growth.
The big debate in politics, in the other place as well as in this House, in the next six months will be concerned about nationalisation versus privatisation. In my view, that debate will contribute nothing to the solution of the economic problems we have just been discussing. The only thing that can be said in support of the privatisation of some of the state industries is that it will take them out of the straitjacket of the public sector borrowing requirement. That is a very complicated way of taking them out of the external finance limits and the PSBR which have been laid down by the Government.
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The public sector in this country is a very important part of the total economy. Its output is £18 billion per annum, which represents 11 per cent. of the GNP; its investment is £5.8 billion per annum, which represents 16.5 per cent. of the total national investment in this country; and it employs 8 per cent. of the total number of employees. I am not talking about local government but about the public sector.
For one group of politicians in this country to say: " We are going to denationalise that tremendous group of assets as promptly as we can," and for another group of politicians to say: " When we get into power we will renationalise them," is total irresponsibility. These sectors are so important to the whole of our national economy and our national wellbeing that they should be taken out of the area of doctrinaire debate. What is happening at the moment is that the limits on investment by the nationalised sector and the failure of the Treasury to distinguish between revenue and capital investment in calculating the PSBR are stifling not only the nationalised industries, some of which have great potential for growth, but also a large number of private industries which depend on supplying the state industries—for example, Plessey in relation to the Post Office and Telecommunications industry, GKN and BICC, which the other day had to dismantle its expert team on electrification because there appeared to be no prospect of the railways investing in the immediate future in the electrification programme.
Therefore, what we are doing when we put the state sector into this straitjacket is stifling the whole health and wellbeing of large areas of engineering and technological industry in this country. So I would commend to the Government a document published the other day by a group of chartered accountants called The Hundred Group—chartered accountants, some of whom are in the state sector but who are mostly in the private sector. They made a survey of a number of countries which have large state investment, and they came to the conclusion that this was the only country in the world which applied the kinds of principles which are at present being applied by the Treasury in relation to nationalised industry investment.
To take France as an example, it has the largest nuclear development programme and recently built a new rail-line between Paris and Lyons and put a new train on it—a vast public industry investment—but they did not cripple it, stifle it or limit it by saying that it would offend the EFL or the PSBR. They permitted the state industries to have access to the market in order to finance that kind of investment. Strangely enough, among all the industries which have no access and no right to go to the market in this country only BL and Rolls-Royce, for some reason, are excepted. All other state industries come within the limits laid down by the Treasury. The One Hundred Group as well as identifying the difference in financing between the state and private sectors in all other countries—Italy, Germany, France, Australia and so on—also appealed to the Government to say that the methods of financing State-owned industry need radical reform in the light of modern economic and financial considerations. They said—and this is a totally non-party body —that the industries should have the normal commercial freedoms appropriate to major trading bodies, subject

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only to safeguards as necessary in case of market or production dominance.
The state-owned industries finance much of their investment internally, but the collective forecast of virtually 100 per cent. self-financing is quite unrealistic. Government borrowing places a heavy burden on the gilt-edged markets; yet the Government insist on this method as a means of funding state industries. This causes market distortions, and so I would appeal to the Government to look once more at the whole basis on which they organise the financing of state industry, examine the recommendations of the One Hundred Group, because this could have major implications not only for the creating of employment in the state industries but also for the related supporting and supplying industries.
One final point: The noble Lord, Lord Beswick, talked about consensus. May I make one suggestion in this regard? We have at the moment only one forum for the development of economic policies. There are a whole lot of little private groups and bodies which do a great deal of research and discussion, but on a national basis we have NEDC, in which the trade unions, the Government and the employers sit down together to discuss economic policy. I suggest that the Opposition and minority parties in this country should be invited to that forum so that we could try to devise policies based on consensus and a general acceptance of national targets in the national wellbeing. This may be a way of achieving some kind of common objectives such as are set out in the Motion before us.
I would also support the proposition that we must have an incomes policy, but we cannot develop that at great length tonight. What has been encouraging in the last few days, with the notable exception of the " suicide " leadership of ASLEF, is that we have had a response from working people who recognise that wage levels and productivity have some relation to employment and redundancy; and that has been accepted because it has been explained and understood. It may be that we are at the beginning of a stage where we could develop some kind of common understanding of the importance of an incomes policy. But may I say this: an incomes policy will not he accepted by the mass of the working people in this country unless they feel they are operating in a free and fair society; and some of the golden handshakes, for example, that have been paraded in the last few weeks in the financial press do not encourage understanding by working people—some of whom are accepting drastic reductions in their standards of living—of the responsibilities of a national incomes policy. So from these Benches, with our Liberal allies, we will continue to conduct a campaign to secure that national consensus, and we are encouraged by the by-election results to feel that people are responding.
5.9 p.m.
Lord Boyd-Carpenter: My Lords, the noble Lord, Lord Taylor of Gryfe, as he was speaking, recalled to me, as it may have done to others of your Lordships, the late Mr. Ramsay MacDonald. He has so attractive a voice that it is only after he has finished speaking that one comes to the conclusion that he really has not said very much. That was the characteristic of that great man in his later days and I hope the noble Lord, Lord Taylor of Gryfe, will allow me to say that
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of his speech this afternoon. He told your Lordships that he and his friends, for whom he indicated he was speaking, were all in favour of a great new development—of developing a consensus which would get this country out of all its problems. But I do not think I am alone among your Lordships in being no wiser now than I was when he began to speak as to what that consensus would actually set out to do.
I hope he will allow me to say—and he will confirm this when he reads his speech in the Official Report— that he confined himself to generalities of a very agreeable and civilised nature. But when it came really to indicating what he and his friends would actually do if they carried the kind of responsibilities that my noble friends on the Front Bench carry—day-to-day responsibility for handling the immensely difficult problems which face this country and any Government that it has—then, I am bound to say that he left me with the impression, either that he and his noble friends do not know what they would do or, for some reason or other, they prefer not to share that knowledge with us.
I could not help recalling as he was speaking, flanked by his noble friends, some lines of Kipling which I think apply to his party:
" Here we sit in a branchy row,
Thinking of beautiful things we know.
Dreaming of deeds we mean to do,
All complete in a minute or two.
Something noble and grand and good,
Won by merely wishing we could.
How we are going to, never mind".
May I turn now to the noble Lord, Lord Kaldor. I was interested, as I am sure the House was, in his analysis of the problems occasioned by North Sea oil, which, if he will allow me to say so, he described with great clarity if not with complete impartiality. But it did not seem to me, if he will allow me to say so, that he succeeded in doing what he was trying to do, which was to demonstrate that market forces were, in the language of 1066 and All That, a Bad Thing. The noble Lord, Lord Kaldor, knows better than most of us, perhaps even better than his noble friend Lord Balogh, who was here a moment or two ago, that market forces have not been allowed to operate in respect of North Sea oil.
We first had a system of Government licensing of the areas for exploitation. Then his political friends imposed the BNOC, with the additional advantage of including the noble Lord, Lord Balogh, in the membership of its board. Then successive Governments—and I would distribute blame fairly equitably between them—have imposed special and discriminatory taxation on the output of the North Sea. It is, at least, as arguable as what the noble Lord argued, that if Governments had allowed market forces to operate, this country, and British industry in particular, would have had the advantage, which they appear to have been denied, of cheaper energy than their European competitors.
We have not only North Sea oil; we have our own supplies of coal and gas and it is not wholly satisfactory that in that situation—and I must disclose an interest as being concerned with a part of British industry which is very energy-intensive—we have to pay more for our energy than do our Continental competitors, coming from countries that do not have these natural advant-

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ages. I will concede to the noble Lord, Lord Kaldor, that there is a criticism there, first of his own political friends who started this policy and, secondly, of mine who have continued it. But whatever else it demonstrates, it does not demonstrate that market forces have been allowed to operate and have created the damage to which he referred.
What are the market forces to which the noble Lord, Lord Beswick, referred so slightingly?—and so, indeed, have one or two other noble Lords. Surely, the essence of allowing market forces to operate is simply concentrating on producing those goods or services which customers are prepared to pay for, at a price which they are prepared to pay. I was recently on business in the United States and I visited a works in Pennsylvania. Up there in those works was a large poster which read, " Customers make pay day possible ". In the characteristically succinct American way, that makes the point; and it is no coincidence that the country in which that philosophy operates gives to ordinary people the highest material standard of living of any country in the world. The American economy is market force orientated. Those on both sides of industry—and they do not look upon it there as " both sides "—in whatever capacity they work, realise that their living depends upon satisfying the customer. That is what market forces means. It is more than coincidence that those who follow that policy enjoy the highest material standards that the world has seen.
So I come to the noble Lord, Lord Beswick, and his Motion. If he will allow me to say so, his Motion is infinitely less attractive than his speech and, indeed, there were moments in his speech when the exact relationship between the two was not immediately apparent. He began—and this can only be intended as a serious criticism of the economic policy of Her Majesty's Government—by denouncing over-reliance on market forces and suggesting that these have had bad consequences, social and economic. He then went on, blandly, to refer to a broad-based policy—I am bound to say that, so far as I can recall, he did not tell us what a broad-based policy is—and added that there should be a consensus.
Obviously, a consensus would he a good thing, if it were a consensus on a sensible policy. But a consensus, in itself, as an ideal, and completely unrelated to what the policy to which it relates is about, is surely a nonsensical concept. The right intellectual process is, surely, to try to work out what is the right policy for this country in its present situation, and then to use all your powers of persuasion, of argument and of dialectic to establish a consensus in support of it. But what the Motion of the noble Lord, Lord Beswick, is seeking to do is the other way round—to set up a consensus as the ideal thing, and then leave us, apparently, to accept whatever policy there can be a consensus about.
Of course, there could be very easily established a consensus on the lines of the speech of the right honourable gentleman the Leader of the Opposition at Cardiff last summer, in which he advocated that he would simultaneously reduce taxation, increase public expenditure and cut interest rates. The Leader of the Opposition did not explain to the audience at
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Cardiff how you could do that, or whether those policies were consistent. The only logical conclusion one can draw is not that he would, as one would have suspected, finance his proposals by borrowing, because if he was increasing expenditure and cutting taxation he could not lower interest rates; he would have to heighten them. Therefore, if he was going to do all three, all he could do would be to print money.
You could easily have a consensus on that. Every social service would be improved; every one of these terrible cuts of which we hear would be reversed; public expenditure would rise and taxation would be reduced, earning the gratitude of the taxpayer. You would have an enormous body of consensus on that until the hills came home in, perhaps, 18 months' time. We have been over this ground before. In a sense, it is the ground that we went over and which paved the pathway of the economic decline of this country almost steadily from 1964 to 1979, with a brief interruption when the IMF intervened in, I think, 1976 or 1977.
As I say, we have been over this ground before. We have seen that you can get a considerable degree of support if you will borrow or print money to maintain services and benefits at a level that you are not earning. But I cannot believe that the noble Lord, Lord Beswick, who has had a very distinguished career in government and who was the most effective head of a public corporation, is advocating that. However, I suggest to your Lordships that some of those who support the noble Lord have not applied their minds to this problem. We are facing—
Lord Beswick: My Lords, if the noble Lord is leaving this point of consensus, could he tell me whether I am to gather from what he has said that he agrees or disagrees with what his right honourable friend the Prime Minister said?
Lord Boyd-Carpenter: My Lords, if the noble Lord will tell me to which of my right honourable friend's many interesting, inspiring and stimulating observations he is referring I shall be in a better position to identify, but he will appreciate that, warm supporter as I am of the Prime Minister, I should not like to give him a completely blank cheque of that nature.
Lord Beswick: My Lords, I did take it that the noble Lord had listened to my speech and that he had heard me quote carefully, slowly and clearly what the right honourable lady the Prime Minister said in Melbourne.
Lord Boyd-Carpenter: My Lords, I thought that what the Prime Minister said at Melbourne made very good sense and was very rightly said at that place. If that is what is worrying the noble Lord, I can reassure him at once. If I may come to the point that I was on, this country is facing a situation of the very greatest difficulty. The Government are having to do unpopular things, and no doubt as a result of that are unpopular. This touches on a point of very great seriousness indeed which goes beyond our present troubles. It does not seem to me to be 100 per cent. certain that parliamentary democracy as we know it and a prosperous, free enterprise society can necessarily continue to co-exist. There is an inveterate temptation

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for politicians to meet the electorate's appetite for eating the seen corn. It is such a temptation. Those of us who have been in another place have all been subjected to the temptation to obtain support by not insisting upon resources being put by for investment and instead handing them out for good causes, like excellent social services—excellent things in themselves—but to an extent and a degree which prevents adequate resources being available for the necessary investment to provide for the future. That is the greatest problem of all and it rears its head very conspicuously at this moment.
On this point let me recall to your Lordships' memory a speech made in another place by a very great, perhaps the greatest parliamentarian of our generation, Mr. Aneurin Bevan. It was made when he was a dying man. On 3rd November 1959 he said this:
" There is one important problem facing representative parliamentary government in the whole of the world where it exists. It is being asked to solve a problem which so far it has failed to solve: that is, how to reconcile parliamentary popularity with sound economic planning.…
" I would describe the central problem falling upon representative government in the Western world as how to persuade the people to forgo immediate satisfactions in order to build up the economic resources of the country. Let me put it in another way. How can we persuade the ordinary men and women that it is worthwhile making sacrifices in their immediate standards or foregoing substantial rising standards to extend fixed capital equipment throughout the country? This is the problem and it has not been solved yet ".—[Official Report, Commons, col. 862.]
It has not been solved yet. In the light of that, I hope that those who criticise every reduction in public expenditure, be it on education, social services, housing or health, will bear those words of Mr. Bevan in mind. It is a fatally easy temptation to seek to suggest that there are resources for doing popular things which can be applied to those popular things without eating the seed corn. I find those words of Mr. Bevan, made, as I say, in rather dramatic circumstances—his last speech in the House of Commons—intensely moving and wholly relevant today. That is the problem which faces this Government at this time: How to secure that sufficient resources are moved into investment, into preparing for our future, and the extent to which therefore it is necessary to curtail otherwise popular expenditures. Such a situation was referred to, but I shall not weary your Lordships by quoting it, in very fine words by Mr. Denis Healey in 1976.
This situation imposes an enormous strain upon the Government and their supporters. It means that they have to face unpopularity, the exploitation of every grievance, the stimulation of every appetite and stand firm in the long term interests of this country. It imposes, above all, an extreme burden on the Prime Minister. Twenty years ago I had the honour of serving in the same department as she, and that experience convinces me that in this crisis she will neither falter nor fail.
5.28 p.m.
Lord Jacques: My Lords, first may I congratulate my noble friend Lord Beswick on the terms of his Motion but more especially on the quality of his speech. It was a pleasure to see Frank Beswick back at the
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Dispatch Box. I am to be followed by the noble Lord, Lord Thorneycroft. The last time we were in the same debate I followed him and had great fun. I understand that he is looking forward to following me.
In the post-war period, our Governments have been elected by a declining percentage of the electorate. I need not go into the reasons. We know the reasons. But there has been one compensating factor: a willingness on the part of the elected government to consult with other institutions within the State and to take their views into account. We had that willingness until 1979. Since the election of 1979, consultation has been at the minimum. Consequently, there has been less and less consensus. I would say to the noble Lord, Lord Boyd-Carpenter, that consensus at least has one inherent merit: it generates goodwill and it minimises friction, which is very, very important.
If a Government, elected by something substantially less than 50 per cent. of the electorate, act in the way which the present Government do, then they can have no grounds for complaint if in a few years' time we have an extreme left wing government which act in the same way. But I am sure there would be great protests. I can almost hear the screams which would be heard.
I would plead for greater realism in our policies, particularly our economic policies. For example, we talk—and we have done so this afternoon—and act as though we have completely free markets. But in almost every market, whether it be the markets for energy, transport, commodities, finance or labour, we have institutions which have considerable market force. Not monopolies, but certainly semi-monopolies. In these particular circumstances monetarism, not in my words, but in the words of Galbraith, has become a design for combining unemployment and recession with continuing inflation. That is the lesson which has not been learnt. If the present Government had given half as much attention to the retail price index as they have given to the money supply, they would have been much more successful in controlling inflation. The retail price index is a primary consideration in all wage negotiations. It generates future inflation. Because it generates future inflation, it is a factor that is greatly taken into account in determining the rate of interest—which again increases the retail price index.
Similarly it is often said that the Government cannot spend their way out of inflation. But every Government in a welfare state spend themself out of inflation, and they have no choice about that. At the present time, unemployment is costing us £12,000 million in unemployment pay and lost taxes. We are spending it, whether we want to spend it or not. It is not a question of choice—we have no choice. I would remind the House that unemployment benefit is not just a social security benefit. It is a cushion against deeper recession and against higher unemployment; because if there was no unemployment pay, demand would be less and consequently the recession would be far deeper. It has a dual purpose.
I would remind your Lordships' House, too, that a large part of the hard-core of the unemployed are not people who have combined together to price themselves out of the market. A large part of the core of unemployed comprises unskilled, low-paid workers who very often have had very poor conditions of employment. The choice is not whether we spend,

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but how we spend; whether we spend on keeping people in, very often, demoralising idleness, or whether we spend a little more and rebuild some of the social assets which we shall need badly in the future. Expenditure on those social assets would generate employment in the private sector. The public sector buys its materials and services from the private sector, and the people who are employed in the public sectors spend their wages in the private sector—and expenditure of that kind would generate increased employment immediately. What is equally important is that in the long run it would replace some of our social assets and put us in a better position after we are out of the recession. We have many social assets which require replacing; some of our sewers were put down in the 19th century and ought to have been replaced long ago.
We are in a better position for reflation than we have ever been since the war. Two factors are needed. First, do we have the spare capacity'? According to the CBI we have 16 per cent. spare capacity. More important still, what about our balance of payments? Our balance of payments is protected far better than it has been at any time since the end of the war because of the present and future North Sea oil receipts.
The risks in reflation are negligible compared with the perils of 3 million unemployed for a decade, and that is what we are faced with. We arc dividing our country into two nations; those who are fortunate enough to continue in work and who, because they are able to continue in work, have much the same real wages as they did before, and those who are unfortunate enough to be out of work and living on the poverty line. There is no stability in that situation and if there is one thing we need, it is stability.
In industrial relations also, we have a lack of realism. The question of the immunity of trade unions, the closed shop and similar questions are of fringe importance. They are negligible. The real issue is whether we as a society can settle industrial disputes by the civilised method of conciliation and arbitration which is binding. That is the real issue. That is the issue in which the public are interested, and not in the kind of things which are in the Employment Bill, which is before the other House.
I would direct the attention of your Lordships' House to an article in today's Manchester Guardian by Mr. Denis Landau who is at present the chief officer of the Co-operative Wholesale Society and who was formerly the chief officer of Cadbury Schweppes. He tells us there that the Co-operative Wholesale Society has had a closed shop since 1919. It has suffered a minimum of dislocation through industrial disputes because it has enjoyed good relations with the trade unions and it has agreed procedures for the settling of disputes. He goes on to point out the very considerable difficulties which his organisation will face in its industrial relations if the Employment Bill, which is before the Commons at the moment, passes into law. There is a danger that the Bill will cause friction and will make things much more difficult. There is one thing in particular which I should particularly like your Lordships' to bear in mind. It has been said, not by the TUC but by the chairman of the Conservative trade unionists, that the Government have no mandate for this Bill. If the Government have no mandate for it, I hope
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this House will bear in mind that when the Bill comes here it will not have the protection of the Salisbury doctrine. I am sure that if the other Party had been in office and those had been the circumstances, they would have said that it did not have the protection of the Salisbury doctrine. Indeed, they did that over the shipbuilding and repairing Bill.
I would commend the Government for what they are doing and are proposing to do about industrial training. but I cannot reconcile this with the cuts in universities and polytechnics. I should have thought that with the retraining that is necessary, the universities, and in particular the polytechnics, were necessary more than ever before. This seems to me to be a considerable inconsistency.
During the period of full employment, when we had entirely different circumstances, we had methods by which we gave a subsidy to investment; to investment which very often replaced labour. Most of it did replace labour, and we taxed employment. We are still continuing to do that. I would join with the noble Lord, Lord Boyd-Carpenter, in saying that these things must be reappraised; that we must have another look at them. What was good in the days of full employment are not good today, and certainly it is not satisfactory to subsidise moves which replace labour and to tax the employment of labour when we have 3 million unemployed.
I would make one final suggestion, not to the Government but to both sides of industry. It is likely that in the future there will be a desire for more shift work because of the very high cost of equipping factories. It has been the practice in the past to compensate shift-workers by higher earnings. I should like to suggest that in the future both sides of industry should look at the possibility of compensating shiftworkers by shorter hours. That would be much more satisfactory in our present state. For example. a four-day week of eight hours, making a total of 32 hours, with staggered rest days, is a good way of getting shift work and spreading employment.
In conclusion, I would agree with my noble friend Lord Beswick that there is not the slightest reason why this country should not be the richest and the happiest country of Europe. Only one thing prevents it, and that is that we are polarised, that sectional interests dominate rather than the interests of the community. My great criticism of this Government is that they have increased that polarisation.
5.42 p.m.
Lord Thorneycroft: My Lords, I welcome the chance to speak for a few moments after Lord Jacques and to agree very much with the final sentence of his speech, that if we can avoid polarisation in this country we shall make a substantial contribution to the solution of our problems. Which brings me to say to the noble Lord, Lord Beswick, that I start from a position of some sympathy with his approach. He asks for broadly-based policies. I agree with him. He speaks with moderation; he is not a man who searches for extremes, and I think all this is common ground between us. So I do not set out on the basis of picking quarrels with him. I will not use the word " consensus ", which seems to me too controversial and uncertain; but if I can find a consensus with him, not necessarily about the

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policies but about the facts of the situation, I think that might be quite a start. Where I part company with the noble Lord, as others have, Lord Harris and Lord Boyd-Carpenter and others, is the peg upon which he has hung his argument, the over-reliance in this country on market forces.
If the noble Lord put this Motion down in Poland he would have a very much better chance of carrying intellectual conviction. I say this not in criticism of the poor Poles, for whom I think everybody can only feel pity and compassion at this moment. But there was a country which for years under a Left-wing policy has failed to extract coal from the mines, food from the farms or goods from the factories, and provoked a revolution or counter-revolution, and has now swept back under a military dictatorship to the application of the market mechanism in the most ruthless form—prices 100 per cent., 200 per cent., 300 per cent. up—in order to wring the coal from the mines, to persuade the farmers to part with the food. If you want market mechanisms in a ruthless way, that is an example.
But, my Lords, the noble Lord is talking not about Poland but about here, and it seems to me that one might perhaps persuade him that the situation is a little different in this country—and not only under his party but under all parties. The market mechanism is a term of art in which buyers and sellers meet together and decide the price of something in what the economists call a situation of perfect competition. It is a lovely dream world in which they live—two pigs, one buyer, pigs cheap; one pig, two buyers, pigs dear. There is a delightful simplicity about the economists' theory. I always like to say that.
We in this country suffer from many ills, and I dare say the noble Lord and I would agree about quite a lot of them. But one of the ills I should have thought we certainly do not suffer from is over-reliance on market forces. He could have chosen almost anything else as a peg to hang it on but not that, and I hope to persuade him very shortly of the real limitations of the argument. Several noble Lords have argued the case of what happens in the real world. I think Lord Jacques was talking about wages. Do not say that wages in this country are subject to any recognisable system of market forces; the market is wildly distorted. For over a century not just the Labour Party but the Conservatives and everybody have been passing laws which have savagely tilted the bargaining weapon in wage negotiations, until you have a situation in which a great trade union can extract the maximum advantage to itself with the minimum cost, and to the maximum damage of everybody else concerned. That is under the law as we have established it; not just the Labour Party, but all of us have gone along with this. I am not saying things are right or wrong. I have got to that stage in life when I sometimes doubt whether I know what is right or wrong, and I am less confident than some about how to govern the country. I am talking about the facts as they are.
Whatever else that is, it is certainly not the use of market forces. It has disastrous consequences. The activities of ASLEF at the moment are probably losing more jobs than anything else in this country. It is doing terrible damage to young men. But that is the fact; that is what we have established. Take jobs in the ordinary world; take young men going into jobs,
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or anybody. They have a meeting of the National Wages Council. I happen to be familiar with the Catering Wages Council. They meet and they decide what wages should be. It is all right for big firms such as those I represent; Trusthouse Forte pay, and I suppose the customers pay too. All that goes up, with inflation and so forth. And hundreds of people in hoarding houses in Scotland are hurled out of work because nobody can afford to pay the higher wages. That is not market forces; it is part of this enormous system which we have built up, which is really relevant to an utterly different age from the one we live in.
Take the terms of employment. In the old days one could say, " Why not give Billy a chance, see if he is any good, get him into the shop and see how he carries on ". You do not find many small businesses doing that today. You have got this curiously termed Employment Protection Act where you have to pretty well marry the chap. Nothing to do with market forces, nothing whatever. I assure the noble Lord, Lord Beswick, that I am not saying this is the wrong way to run a country, and it is probably far too late for me to try to change it. Over the years I have been in public life I suppose I must have done a lot of these things by accident or not knowing, but that is certainly not market forces. I remember when a young married couple wanted to set up house, and they had not got a baby; they went and rented a flat. But we all came along and said, " We have got to control the rents; we cannot turn them out ". Successively we all did it. We pretty well eradicated rented accommodation in this country for the married couple; there is not any accommodation to go into. But that is not market forces. That is why it astonishes me that the noble Lord should have chosen this approach.
Take the question of starting a business. I should think there are more planning controls for starting a business in this country than anywhere else in the world—national regulations, local government regulations; it takes months to get through these. Let us take the example of building factories. I do not know whether noble Lords have ever seen a factory built in the United States of America—it goes up almost overnight. But not here: everybody is called in. There are people marching up and down measuring and recalculating; there are 18 sets of drawings, some for central Government and some for the Department of the Environment. Everybody is in on it. It is not the free play of market forces.
When it comes to profit and loss we subsidise. I think we plan to pay £2 billion next year for business; £2 billion for the manpower commission; and £2 billion for loans for nationalised industries and the rest. It is not wrong: it is part of the system. As regards the coal industry, I heard this morning that every household pays £27 for supporting the coalminers, and it is probably, quite right. We give them an artificial monopoly as well because we have stopped the import of coal. Against that they seem to have behaved extremely well; I think that the noble Lord would agree about that. It may be a very high wage, but at least they have rejected the more extreme advice. But none of this has very much to do with market forces.
I have spoken about a few of the matters involved. When it comes to the real life that people lead, we long ago abandoned market forces altogether. As

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regards the necessities of life, the idea that market forces should come in is simply out. I suppose that the type of thing that a willing buyer and a willing seller could always agree about would be the education of the children. Any number of parents would pay anything—not the noble Lord, but me, everybody—but for years education has been free, and very largely compulsory. Imagine the row that takes place if you catch anybody paying for music lessons. It is a shocking thing to pay for music lessons in this country; the most frightful issues of principle are involved. As regards employing a private doctor, I do not know whether the noble Lord wishes to abolish all private medicine, but some people go to great extremes. The SDP—if I may look at the Liberal Benches—wish to abolish even the possibility of subscriptions to educational charities. What a proposition! They really should look to some of their allies in matters of this kind.
I only mention those matters to indicate the type of world in which we actually live. I am not saying what is right or wrong or how we ought to do things, but I do say that as we are looking at the problem and trying to find a consensus about the facts, let us look a little deeper. Let us recognise that whatever else is the cause of our ills it is probably not that one and, let us try to look for some other one.
I shall not embark upon that matter this afternoon, but I want to mention one area of market forces that has not been mentioned hut which does seem to me to be the most relevant: world market forces. They do matter and for some reason we have not touched on them. World market forces matter a great deal. The Lord Privy Seal said the other day that we are in the middle of a deep and continuing recession. The President of the United States said it a fortnight ago; the CBI said it yesterday; the TUC have said it; and even I have said it—not that that perhaps makes very much difference to the situation. But almost everyone upon whom you can rely—let us put it that way—seems to have a fairly clear idea that there is a large and continuing recession in the world, and I think that the Government know that as well. It is not something that we can easily resolve.
It is true that we were very unfit to meet that recession when we entered into it. It is true that at present, thanks to it, and thanks to the policies and to the courage of Her Majesty's Government, we have made ourselves very much fitter in that situation than we were before. Businesses are infinitely more efficient, and I speak with knowledge of those with which I personally am associated.
As regards exports, it is incredible that over the years people have said, " Ah, these exports; they are doing all right at the moment but they will fail very quickly ". But they have not failed. British business and British workers have battled on and somehow, in the teeth of a world recession, they have managed to sell more and more overseas. It is a credit to all—unions and everybody concerned—that somehow or another labour costs have been held down. It is very difficult to do that in a boom: it has always been considered well nigh impossible to achieve it in a slump. Yet we have succeeded in doing those things.
So there is much going for us. I do not know how
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the future will turn out in this matter. I believe that we are going to stay in a very rough world for quite a long time and I think that it is right that we should say so. I believe that it would be helpful towards a consensus if we all agree that we are likely to remain in that condition for quite a time. While we remain in it we ought to talk together about the best steps we can take, but the room for manoeuvre is incredibly narrow. When the debates are over, when it comes down to the actual decision of what we can spend and what we cannot, very narrow limits lie in front of us. I myself think that in positions of very great difficulty Her Majesty's Government have got it about right, and I wish them well.
5. 57 p.m.
Lord Soper: My Lords, the House is grateful to my noble friend Lord Beswick for introducing a topic in which we are invited to think rather more in depth than perhaps some of these debates invite. I find particular satisfaction in the emphasis which I believe can be laid, and must be laid, upon the thinking in depth about a political situation which I believe is unprecedented, and I deplore—although I claim no profundity myself—the erosion of such thinking in depth.
It is a very long time since in the open air I have heard much about dialectical materialism and the labour theory of value. It is a very long time since I have heard much constructive theological debate on the emergence of " born again " people and so forth. Without emphasising the point too much, it seems to me that this has applied to the Labour Party in its various activities over the years, and it offers a good deal of the explanation as to why there has been a split and why some people have now gone off to the SDP.
This debate in depth would be valuable, I think, at all times. To me it is particularly imperative in the light of the problem, the evil it seems to me, which overshadows all the others. I would be untrue to myself if I were not to spend a moment or two in declaring my abomination of the present level of unemployment and the sorrows and distresses which it brings to so many people, most of whom are largely innocent, most of whom are inarticulate, and all of whom I believe present a moral problem to any society which would make the claim to be civilised.
What is even more disturbing to me is that it seems to me that this condition of unemployment is not only worldwide, but is endemic in terms of the kind of society in which we live today which in many respects is unprecedented. In the unprecedented condition of labour from the jig tool, to the donkey engine to the various issues that are now associated with the silicone chip, we have entered upon a world of which there is no antecedent and there is certainly no correlative information that we can derive from previous eras in our history. It would seem to me reasonable to suppose that, inasmuch as it is unprecedented, a great many of those proposals which were adequate, or semi-adequate in past times, need not necessarily have anything to do with the present situation and can contribute practically nothing to it. When you add to that situation the also unprecedented situation of power—in which we now have the capacity to blow ourselves to pieces as a human species—and other issues, which

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though they may not sound so important are also of great significance—the two-career family which has revolutionised much domestic finance and much domestic life—and if these are issues which are beyond dispute, then I look at the system which traditionally and in this House this afternoon has been advertised as in principle the system which can deal with them.
I was fascinated by what my noble friend Lord Beswick had to say about interest. It is significant to me that the point, which was made so majestically by Tawney in his Religion and the Rise of Capitalism, makes the difference between the negative " interest ", which was permissible in the days of the medieval Church and the positive " interest " which is now accepted existentially in the world in which we live today. It may interest your Lordships, if you do not already know, and I do not possess any particular ability to describe it in detail, but I remember from my own scholastic days that interest was permitted in the medieval world if there was a condition of lucrum cessans, which means that if your money was in peril, you were entitled to draw out some interest in order to keep that money up to scratch; and the other was that you were entitled to take interest if there was a situation of damnum emergent which sounds quite impressive in Latin and which is just the same if translated: that if you were in danger of losing money because you were lending it, you were entitled to utilise the processes of what they called usery and what we call interest. As everyone knows today, interest is a positive expression factually justified; after all, our capitalist fathers were the mother and father of existentialism, not Sartre—existence precedes essence, and you evacuate from the whole concept of interest the moral proposition which obtained in the years of the Middle Ages in particular.
It struck me as significant that the noble Lord, Lord Thorneycroft, admitted a Freudian slip when, in the midst of his exuberant explanation about the conditions which prevail in a society, which he was quite right in saying is not activated entirely by market forces, he turned aside and said that he did not really know which was right or wrong.
What has happened in the capitalist society is that the moral dimension has been evacuated and Tawney's claim, which I think is irrefutable, that what happened when the capitalist system became established is that instead of a basis of moral law, the capitalist regime makes its own laws in order to fit in with the habits which it increasingly committed. It is that which I believe would constitute the gravamen of the charge against the particular system of government and the particular system of political and economic operation on which we are invited to make our comments this afternoon.
I am a little distressed that throughout this debate so far the word " socialism " has not been mentioned. I find that peculiar. I happen to be a socialist, but I think that it is necessary to advocate at least that thinking in depth about what is the alternative to this morally debased system. I do not subscribe to the principle that you can derive a socialist philosophy from a mixture of Feuerbach and Hegel. I do not believe it means the totalitarianism of a state system as operates in Russia. I believe that there is a Christian socialism which is derived from an understanding of the
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Sermon on the Mount and I see no reason why, as a member of the cloth, I should not advocate that as the alternative to the morally debased system under which we now believe that something like market forces, laissez-faire, are to prevail just because they exist. I find that intolerable.
Therefore, I shall delay your Lordships a moment or two in order to say a little more about that alternative which to me offers the only hope for my grandchildren and anyone else's grandchildren for that matter. It is to complete what has been said, first, by my noble friend Lord Beswick and then by the right reverend prelate that, although we arc many we are one body because we partake of one bread. I would beg to remind this House that that bread is given. The essence of the socialist case is not nationalisation; it is the recognition of the family table and that the things which are required and necessary for the sustentation of life are those things which ought to be commonly enjoyed, particularly as the only society that as yet is worth calling a true society is the family table and the hearth fire. Here you have a revolutionary programme required for an entirely revolutionary age.
I know that in the advocacy of what I have just been saying I speak to a very small minority of people, traditionally nurtured in the Christian faith and now I think heavily in difficulty about the compromises and the maladjustments that have made the proclamation of this faith even more difficult than it has been in the past. But I do not believe that such a debate as this ought to be carried on without such a proclamation and, however badly I have said it, I am quite convinced that what we need is a revolutionary concept of politics in which the moral issue is brought back into the forefront. Whatever the hazards that can be prophesied by those committed to a monetarist programme, to care for those who are now denied the opportunity to give is the most economic proposition of all.
Only in so far as human beings can learn that the only creative activity we have is to impose our powers upon the raw materials we believe are God's providence and thereby create the wealth for our own sustenance, is the open door to the kind of world in which the immeasurable resources of science and technology can at last benefit all those who are the children of God.
6.8 p.m.
Lord Allen of Fallowfield: My Lords, I am sure that this debate comes at a time when a growing number of people in our community at large are very restless and seriously concerned about the present strategy being pursued by the Government. The noble Lord, Lord Thorneycroft, in a robust way, attacked the mover of the Motion for staging it in the setting of a debate about over-reliance upon market forces. All right, if one accepts that, may I say in plain, simple terms, that the debate is about the strategy of the Government and the disasters that that strategy is causing. That is what is understood outside by the term, " over-reliance on market forces ", if it is understood at all.
The longer I spend in trying to reconcile problems involved in our economic, political and industrial life, the more concerned I am at the failure of this Government—yes, with acknowledged difficulties, but still failure to date—to match promise in Opposition with achievement in office. Whenever I look—and I am

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sure that this applies to others—at the Government's present policy, which by implication is being challenged after close on two and a half years in office by a growing number of its leading personalities, I, like countless others in our community, am obliged to count the cost of what I can only term this ideological dogma and lost opportunity.
It is a deliberate and coldly calculated betrayal of working men and women in all walks of life by the attack on their living standards and job prospects. I use the term " betrayal " with a great deal of caution, but I was listening the other night, as I suppose were others, to the television programme " Two Nations ". There we saw a number of casualties of this strategy. One in particular was the wife of someone whom I would describe as being previously involved in middle management, who had been a casualty of the policies which are being supported by the Benches opposite. That lady used the term to the Secretary of State for Industry, " Your Government has betrayed us ". A harsh and uncompromising term, but in her mind no doubt true as she saw it.
A policy which denies over 3 million men and women who are willing and able to work the right to work cannot be right at any time in any healthy democratic society, irrespective of what Government are in office. Policies which are mainly responsible for this are wrong economically, socially, ethically and morally. Policies which seriously disturb and, in some cases, are totally destroying the family unit must stand condemned for all time. This world is about people, and people are the casualties. On that indictment alone a strong case is made out in my considered opinion—and I am sure in the opinion of many others, too—for a more pragmatic and less doctrinaire approach in our attitude towards the creation of wealth, the requirements of industry, both private and public, and of course to investment.
It is against that backcloth that I see no evidence of constructive purpose in the policies now being pursued by the Government; no genuine appreciation of the needs of our people; indeed, no hope for the nation for as long as the present policies are pursued throughout the life of this Administration. That surely must be the construction that the nation must place on these policies; an opinion which seems to have been reinforced by those who have recently been dismissed from the Cabinet, those who have resigned from the Cabinet, and those who are still of the Cabinet, if not expressly so, by implication.
People of the United Kingdom cannot accept that the Government are right when they try to run away from their share of the blame for the recession in our economy. If the Government of the day, irrespective of who that Government are, are not at all times responsible for the economic health of this nation, then I ask who is? Incomes policy was referred to in this House earlier today. This is not the time to debate the merits or otherwise of an incomes policy. I happen to come from a stable of the trade union movement which some would describe as being moderate. I want to say that if it is right to hold the Government of the day responsible for balance of payments surpluses, for inadequate spending here, there and everywhere, it is equally right to acknowledge that the Government have the right of a substantial
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input into how much goes into wages, how much goes into salaries, how much goes into profits and dividends, and I see nothing wrong with that apportionment of responsibility. My problem today is that there is no attempt in our economy at the present time to get to grips with those very real issues. There is, as I have said in this House before, a dialogue of the deaf, and I hope that in what I want to say later that this House at least will acknowledge that, that the Government will acknowledge that and take steps to try to apply a suitable corrective.
I do not believe that the Government can run away from their responsibilities, nor do the people in this great nation of ours. What is worse in the minds of many people, particularly among the casualties of these policies, is that they see a Government with so few fresh ideas and, above all, see their stubborn refusal to accept that there are alternative policies which they could take on board as suitable correctives to the present economic and social climate.
What is missing in our society today—and I hold the Government mainly responsible, and I emphasise " mainly ", for this deficiency—is the absence of any consensus. We have already heard comment about the term, " consensus ". Let me say what I mean by that term. I mean an element of agreement, consent, or understanding on implementation of what the noble Lord, Lord Boyd-Carpenter, calls sensible policies. It is a matter of deep concern to a number of people—and I count myself as one of them—that no such consensus is seen to obtain in Britain today at workshop floor level, but more particularly at the level of the tripartite National Economic Development Council that I had the privilege to serve for close on 17 years. I believe that there is a basis on which policies and alternative policies ought to be examined in depth, exhaustively, in an attempt to reach some consensus in this nation.
There are immense numbers of salt-of-the-earth people on both sides of this fence who genuinely want to see Britain succeed; who genuinely want to see a programme of economic recovery, not in a few years' time, but now. People are not happy with the thought: " It will be all right tomorrow; it will be jam tomorrow". They know that tomorrow, in the setting in which it is discussed, we are all dead. In that sense, it is totally inadequate to accept that people ought to believe that as a reason why they should support policies of which they are themselves the casualties in many respects.
I do not wish to comment on what I see as two important pillars which are central to any reconstruction in this nation of ours. First of all, I refer to the level of investment. No one will challenge the view that investment is about, and for, the future. This, of course, is a fact of life in the case of companies who borrow to finance their industries in the same way as public enterprises borrow to finance their activities. I hope that in looking at the public and private sectors we shall rid ourselves of the view that if you happen to be public in this society you are wasteful and inefficient, but if you happen to be private you are efficient and prudent. That is a piece of nonsense that needs debunking, and the sooner it is debunked in our society the better. It divides society; it does not consolidate it.

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Regrettably, the level of investment in the United Kingdom is significantly below that of Britain's major competitors. Investment in new capital equipment has slumped since the latter part of 1980. Indeed, manufacturing investment was projected to decline by as much as 18 per cent. in 1980. The major reasons for this, we are told, are the continued effects of Government policies, which have depressed demand, driven up interest rates and cut profits. Profitability, believe, is at an all-time low. It is clear that marginal improvements in cost competitiveness will not overcome the depressing effects of those factors.
One of the consequences of high interest rates and the course of lower profits has unquestionably been the high exchange rate. In this context I would say, as chairman of the Chemical Economic Development Council, that I have seen, heard and talked with representatives of well-established organisations acknowledged to have a tremendous record of achievement in this country in the chemical industry complaining bitterly of the effects of those policies on their trading practices.
I am of course aware that the Government have argued that the high interest rates will actually have positive effects on the industrial structure and improved productivity; as it will, so it is argued, encourage a shift to high technology and high value-added products. The logic of that argument is not clear to me. There is, however, clear evidence that the high exchange rate has squeezed profit margins as firms have struggled to hold on to market shares. That in itself has produced severe constraints on the ability of firms to introduce new technology as—we all know this—the British banking system has been reluctant in the past to lend high risk capital for that kind of development, and any noble Lords who doubt that should read the Wilson Committee's report on Finance for Industry, which committee I was able to serve for a number of years. All the evidence is clear that the amount of money for high technology of the kind we are talking about was not forthcoming for the reasons stated in that documentation.
My further supportive evidence for this view is a survey undertaken by Incomes Data Services in July last. They did not find any large-scale introduction of new systems in the present recession. In the few cases where technology had been introduced, it was planned in advance of the present recession. The significance of the failure to introduce new products and processes is that it assumes that the United Kingdom is already producing the right products in the right markets. All the evidence suggests that that is not so. Even if it were, many firms have so savagely cut back output by closing plants and reducing product ranges that there will be considerable problems in meeting any substantial increase in demand. Additionally, the nation will suffer from the severe effects of the recession on training, which will tighten that constraint. I understand that the industrial training boards report cutbacks of up to 50 per cent. over the past two years and a rapid increase in redundancies among apprentices during their training.
One could go on to categorise the strong objections one has and to pinpoint the damage being caused by the policies that are at present being pursued. In that setting one is interested and pleased to see that there
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are members of the present Administration who are equally doubtful about the value of those policies, now and in the long-term, as are others in this House.
I accept that we are in need of a new deal. I have been critical about the absence of any consensus and any fundamental aim and objective between the parties about the economic health of this nation. I firmly believe that yesterday a powerful and serious overture was made on behalf of the TUC to help create an agreed consensus with the Government and to end the dialogue of the deaf between them. I strongly appeal to the Government not to spurn discussing the package with the TUC in the manner in which it was put forward. It is clear that we need a sustained expansion, if for no other reason than to get our people back to work.
6.27 p.m.
Lord Robbins: My Lords, I wish to begin, with great respect, by correcting an important historical statement made by the noble Lord, Lord Soper. He was right in saying that the medieval theologians permitted damage incurred in respect of a loan, the famous damnum emergens. But he was wrong in arguing that they permitted lucrum cessans. Lucrum cessans was denounced by St. Thomas Aquinus and it was only with the development, if you like, of early capitalism in Florence and elsewhere that it began to be permitted. It was only at the Reformation, when Luther took St. Thomas's side, so to speak, and Calvin took the side of lucrum cessans and Molineous, who was a Catholic, that he made his celebrated plea that the prohibition of lucrum cessans was all nonsense.
Lord Soper: I can only suggest, my Lords, that there has been such wide disagreement among reputable theologians on this point that the issue is not necessarily as the noble Lord states. I would quote Dr. Laffan in my defence. I do not know who the noble Lord would quote in his.
Lord Robbins: My Lords, as the most easily accessible, I would quote De Rouver who is internationally famous as a specialist in the history of economic ideas in the Middle Ages and early Reformation. I cannot come to the main theme of my remarks without, in common with other noble Lords who have spoken, first expressing admiration for the introductory speech of the noble Lord, Lord Beswick. One may not always agree with him, but one can always admire his sincerity, moderation and his great record of public service.
I regret to begin on a slight note of disagreement. I find myself completely in agreement with the noble Lord, Lord Thorneycroft, in his objection to the term " over-reliance on market forces ". I do not propose to enlarge upon that because I think that the noble Lord, Lord Thorneycroft, certainly demonstrated that in all kinds of ways over-reliance applies not to market forces, but to the contrary acts of Government.
But, so far as the market is concerned, I am not sure that I know what definition the noble Lord had in mind. If he had in mind those thinkers who have placed exclusive reliance on market forces to the neglect of the essentials of law and the strong state, I would surely agree with him. I certainly, and the

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great classical tradition in which I was educated—I hasten to say not of Latinity, but of economics—would certainly have repudiated the conception of an exclusive reliance on market forces. That, after all, was the way of philosophical anarchism. Shelley's father-in-law, William Godwin, in his youth, perpetrated a book called Political Justice, in which he argued that if the law relating to property and the state were abolished, poverty would disappear, disease would be eliminated; and he even hinted that men might become immortal.
That is not the classical tradition; and the classical tradition which I should like to render explicit to your Lordships is well rendered in modern times by no less a person than John Maynard Keynes, whom the noble Lord, Lord Harris of High Cross, brought into play in a slightly different connection. Keynes' definition of the functions of the state, which incidentally is not frightfully different from Adam Smith's definition, was that,
" the functions of the state relate not to those activities which private individuals are already fulfilling, but to those functions which fall outside the sphere of the individual, to those decisions which are made by no one if the state does not make them ".
I would conjecture that among those functions which are made by no one if the state does not make them Keynes would have included, let us say, the planning of certain aspects of the physical layout, the relief of various kinds of distress, the creation of tendencies to equality of opportunity and broad stabilisation in the growth of aggregate national expenditure.
That being my attitude, I wish to argue that the existence of the market must play a vital and essential part in any healthy society. I am not sure whether the noble Lord would deny this. I hope he would agree with me that in all but the most primitive societies, or a society committed to total war (as I was during the Second World War), the market permits of decentralised initiative of both production and consumption; and decentralised initiative is extraordinarily important. Just think, my Lords, of the plight of the collectivist system of our day behind the Iron Curtain. Think how, for want of a proper system whereby prices and costs may be estimated, they get into the most hopeless muddles. Yet any attempt to imitate a truly decentralised initiative is rejected as being incompatible with the ethos of the system. The noble Lord, Lord Thorneycroft, made an allusion to Poland in that respect. I would make allusion to the even more frightful things which happened in Czechoslovakia.
I sometimes think that objections to the market system as such—I shall come to its deficiencies later on—rest upon ideas relating to the distribution of income. Well, the market as such is a mechanism which, on the consumption and the investment side, responds to whatever net distribution exists. It is true that consumption and investment, if they are not interrupted, determine the gross incomes which arise from the various productive services involved. But what determines the gross income, as distinct from the net, is the tax system, about which opinions may differ—and I am sure they do differ among your Lordships. It is certainly not determined by market forces in any straightforward sense of determination.
I admit that there remains a good deal of inequality
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after tax in the freer societies of this world, although the aggregate for redistribution can very easily be exaggerated. But it must also be remembered, and remembered in this particular context, that there is marked inequality between the rulers and those whom they favour in unfree societies. It must also be remembered that Stalin himself introduced piece-rates wherever that was possible.
My Lords, I freely admit that in our society markets do not always function well. There are straightforward evasions of the law, which the courts exist to punish. There are monopolistic restrictions, both of capital and of labour. So far as the monopolistic restrictions on the side of capital are concerned, we now have the Monopolies Commission and the law relating to restrictions—not always functioning pretty well, but a step in the right direction. But at present we deal with monopolies of labour very imperfectly. I do not think it is open to question that the law in this country gives greater latitude for socially-damaging practices than is the case in most other free societies, and the smooth functioning of the economy is continually endangered by that.
Then there arc the nationalised industries, which in some respects, not all, impair the workings of the market. I freely admit that some public control of the so-called natural monopolies is inevitable, and that presents very great and, up to the present, unsolved problems of policy. But in the mixed economy prevalent at the present day the complications are far greater. The nationalised industries, at any rate in this country, are protected from competition as regards prices. Moreover, the nationalised industries cannot go bankrupt; they are redeemed from the discipline of the market in this respect. Some of them are heavily subsidised; and the fact that this is possible gives rise to what I call the mythology of the bottomless purse. It is no accident, my Lords, that the degree to which, with few exceptions, earnings outrun productivity at the present day is much greater in the public sector than it is in the private sector.
This brings me to the last point that I wish to make. The proper functioning of the market depends on rough stability in the value of money. If prices fall, as in the 'thirties, there is one kind of misallocation of resources. If prices rise, as they have done since the war, particularly since the Heath Government, there is another, more complicated kind of misallocation. I do not wish to dwell on this fundamental platitude; so often in the last 20 years have I bored your Lordships with the evils wrought by inflation.
But in all friendliness I put it to the noble Lord who introduced this Motion that some at least of the frightful perplexities which beset us at this moment, far from being due to over-reliance on market influences, are due mainly to under-reliance on the prime essential of a successful market system; namely, the control of aggregate expenditure, the failure to achieve which, since the second war, rests fairly and squarely on Governments from both sides of your Lordships' House, and the remedying of which must inevitably involve very painful experiences.
6.48 p.m.
Lord Oram: My Lords, I was fascinated by the introductory exchange which the noble Lord, Lord

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Robbins, entered into with my noble friend Lord Soper about the historical justification for interest. Though fascinated, I do not claim fully to have understood. Indeed, that took me back 50 years, when, as a very immature student at the London School of Economics, I listened to my first lecture on economics from the already renowned Professor Robbins—and I must admit that even on that occasion I was both fascinated and failing to understand.
May I turn to the things of which I have some glimmer of understanding and which have been introduced into this debate by my noble friend Lord Beswick. I think he is to be complimented on having conceived the Motion. I do not accept the critical remarks about its terms which have been voiced from the Benches opposite. I also think—and I believe noble Lords on all sides of the House will agree with me in this—that he is to be congratulated on making the kind of speech he did in introducing his Motion to the House. In large part, I think that my noble friend was presenting to us what Mr. Edward Heath in an historic phrase once called the " unacceptable face of capitalism ". Mr. Heath was then referring to one of those financial scandals which from time to time reveal the worst side of the market economy and show that some practitioners of private enterprise—excessively private and excessively enterprising—can make or, at least, attempt to make massive private gains while keeping on the fringe of legality but operating well beyond the pale of social morality.
To me, it is not one particular face of capitalism or one particular manifestation of its principles which is unacceptable. As with my noble friend Lord Soper, it is the system itself which is unacceptable to me—and there are many reasons for this, many of which have already been expressed in speeches in this debate. But the outstanding reason, the one that makes the greatest impact on my mind, is one that is unfortunately and tragically topical: it is that capitalist society is proving itself incapable of employing its workforce. In economic terms, that is ruinous; in human terms, it is criminal. I believe that one of the most fundamental of all human rights is the right to work. A human being is endowed with physical and mental powers which need to find outlets of expression and, above all, must be expressed through an individual's opportunity, on the one hand, to ensure the economic and social wellbeing of himself and his family and, on the other, to contribute as an individual to the common wealth of society.
The system of society such as that in which we live which denies that freedom—not just to a few, but to 3 million of its workers—is a society which, in my view, stands condemned and a society that must be fundamentally changed. And a Government within that society whose leader and whose Ministers wring their hands in frustration and sympathetic despair while proclaiming that unemployment is due to some external recession about which they are powerless to act, is, again, in my judgment a Government which also stands condemned.
Let us recall that this Government was elected on the basis of a very special campaign, one in which the noble Lord, Lord Thorneycroft, played a very prominent part. In the course of that campaign, the virtues of private enterprise were presented to the
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electorate in their simplest and most naïve form. A picture was painted from the hustings of would-be enterprising businessmen being over-burdened with taxation, insufficiently rewarded for their efforts, trammelled and encumbered by the dead weight of bureaucracy, on the one hand, and by disruptive trade unionism on the other. The slogans were: " Let us set the business man free! Let us cut his taxes! Let us increase thereby his profits! Let us free him from regulations and curb the power of the trade unions which oppose him! If we do these things, all will he well ".
It was suggested that these enterprising businessmen will then prosper, that they will then invest their increased wealth in new enterprises and that the workers will benefit, too. They will join in the new prosperity and they will enjoy the rewards from the new economic miracle. We all now know, only too well after nearly three years, that the outcome is very different from that which was presented to the electorate during the election. Of course the tax cuts were received with thanks. But the new investment did not come about. Instead, there has been that dismal, almost daily, record of disinvestment in the form of closed factories. The workers, many of whom were led to vote in this Government on the basis of that false prospectus, 3 million of the workers, have become the direct victims of the worst unemployment crisis with which this country has been afflicted.
Yet, my Lords, despite this, despite the daily evidence, the Government pursue their doctrinaire path. They stick to monetarism, they insist on privatisation, they seek to weaken trade unionism both through unemployment and by legal curbs; and by these means, while no doubt quite genuinely believing that ultimately it will make things better—and I believe that is what they really think—it is, in fact, all too rapidly making things worse.
The Government, in particular, have adopted a destructive attitude towards public enterprise. They have seized upon the weaknesses of the public sector—and I acknowledge that there are weaknesses; and I will say more about that in a moment—and they have exaggerated them in the public mind and are pursuing methods of privatisation (or " denationalisation ", which was once the term) which, in the long term, cannot be but destructive of the essential infrastructure of the nation's economy. My mind went back to Orwell's Animal Farm in which the pigs taught the animals to chant, " Four legs good, two legs bad ". Likewise, and with as little justification, the Conservative Party tries to induce people to chant, equally thoughtlessly, " Private sector good, public sector bad ". Of course that is utter nonsense.
There are some industries and services which can be sustained only on the basis of public enterprise and I believe there are some industries and some services which can be sustained only on the basis of a state monopoly. And successive Conservative Governments since the war have accepted that this is so—not necessarily in their pronouncements and in their ideology; but, in practice, Government after Government have accepted that proposition. The practical situation today is that the public and private sectors of the economy are inextricably linked and the prosperity of the private sector depends to a large extent on the

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provision of basic services by the public sector. Where the present Government differs from previous ones is that this Government are recklessly undermining the public sector by selling off the most easily profitable parts, such as British Rail hotels or North Sea oil, leaving the most difficult parts in public hands; and then cramping investment in them and thus, by a downward-plunging vicious circle, threatening to bring whole parts of the economy to a halt.
I referred earlier to my acknowledging that there are weaknesses in the public sector. I should like to expand on that point for a few moments. Ever since the days of the Labour Government led by Clement Attlee, I have been an insistent critic of the Labour Party's methods, when in Government, of implementing the famous Clause 4 of its constitution—the point to which the noble Lord, Lord Taylor of Gryfe, referred in his speech earlier.
May I first remind your Lordships that Clause 4 does not, as is so often suggested, proclaim the need for the
" nationalisation of the means of production, distribution and exchange ".
It calls instead for the " common ownership " of those things. That can be something very different. Of course, " common ownership includes nationalisation, and I have always been a warm supporter since that Government of 1945 of the nationalisation of those industries and services for which that is the appropriate form of common ownership. But the public sector can be and should be much broader than the nationalised sector. It can and should be highly diversified. There can be state-owned and partly state-owned enterprises within industries still left largely in other forms of ownership. It can include co-operative societies both of consumers and producers. It can include locally and regionally organised as well as nationally unified services.
All those can be within a broader common ownership or public sector. Too much thought and attention has been given to the nationalised sector and not to the broader parts of the public sector. Referring to the nationalised sector, I have always thought that there have been two fundamental weaknesses in the various measures of nationalisation which we have seen since the 1945 Government. As I have indicated, I have always accepted the overwhelming case, as I see it, for the nationalisation of the fuel, power and transport industries. But, whereas those activities, through the instrument of the state, have come to be owned by the public, not nearly enough effort has been made in devising the proper internal structures or in the conduct of public relations to make the public conscious of its role as the new proprietor. The public does not feel that it is the owner of those nationalised industries and it ought to be enabled to come to that realisation.
In other words, in my view, both in terms of industrial democracy—that is, the role of the worker within the nationalised industry—and of consumer democracy, nationalisation has so far largely failed. Neither the workers as providers of the services, nor the public as consumers of the services, have been enabled to develop a radically different attitude to the enterprise from that which prevails in private industry. We see this in the present difficulties in the railways. It is still the bosses
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on the one hand (albeit a different kind of boss) and the workers on the other. The consumer is still the outside recipient of the service—good, bad or indifferent—rather than a participant in determining the quality of the service, as the consumer can and should in my view become an active participant.
I am not saying that the achievement of either form of democracy is easy. I have given a great deal of thought to this and I am very conscious that what I am suggesting is not easy. What I am saying is that no sufficient effort has been made by Governments or by the industries themselves to make these industries publicly owned in the fullest sense of the word. What I am urging therefore—and I believe this to be the implication of my noble friend's Motion—is that we should adopt a much more positive and constructive attitude to the problems facing the public sector of industry and rid ourselves of the destructive and negative attitudes of which the present Government are guilty.
In their dogged pursuit of freedom for competitive forces in the market-place the Government see trade union power as their principal obstacle. It says little—and certainly does little—about the behaviour of those who exercise irresponsible power over the use of capital and who through that power can determine the fate of whole communities. We see no proposal to diminish that power in current legislation, but Parliament is to spend much of the current session in a largely irrelevant and harmful attempt to detract from the power of trade unionists.
The intention is that the combined effect of mass unemployment and of legal curbs will he to force organised labour into a position of weakness. A major aspect of the competitive situation that the Government seeks to bring about is competition for jobs, with worker competing with worker, and in that process to reduce the labour costs of industry. But it is my forecast that this will not happen. Action in human affairs produces reaction. Men and women who have learnt the lessons of history, and in this particular case the lessons of trade union history, will not submit. They will fight. As one of my noble friends (I think the noble Lord, Lord Kaldor) was saying, it is not 3 million that will reduce the working people to an attitude of submission, it will have to be far more before the workers will get into such a situation. They will fight both against unemployment and against any attempt to deprive them of their collective power to defend their living standards. If—as I fear from the utterances of the Secretary of State for Employment—it is the case that the Government have made up their mind to confront the trade unions once again, they will not win. There will be no winner. It will no doubt be said that if in the coming months the trade unions resist the Government in the way I suggest, then they will be their own worst enemies. Their actions will further disrupt the economy. More factories will close. More jobs will be lost.
That may all be true, and it may be that we now face a summer of discontent. But in that event the blame will by no means be all on the side of the trade unions. The blame will rest still more on those in the Government who fail to recognise the changing role of workers in all economic enterprises. That is something which is inevitably coming about. The move towards industrial democracy is inevitable and Canutes in the Cabinet cannot roll it back. Working people will increasingly

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claim that their stake in any business is even more vital, and even more due to be recognised—in practice and in law—than is the stake of those who provide the capital. Until that is recognised our economy will not recover because no Government can bring about an economic and social revival in this country without the co-operation and goodwill of the trade unions. That may he an unwelcome fact to supporters of the Government, but I believe it to be a fact none the less, and the sooner it is recognised the better it will be for all of us.
Indeed, so far from depriving the trade union movement of any of its existing powers, as the present Employment Bill proposes to do, I believe that the trade unions should be given a fuller and more responsible role in industry. I recognise that it may itself be reluctant to take on an additional role but I believe that its members should become involved in the ownership as well as the control of industry. I believe that trade unions could with advantage employ their resources and their pension funds in the actual ownership of the enterprises in which their members work. Just as, on a small scale, groups of workers are forming their own workers' co-operatives and creating their own jobs, so on a larger scale and in larger factories I believe the workers and their trade unions should he involved in the actual ownership of enterprises. The TUC are bringing forward proposals for an investment bank, which may be a useful instrument for bringing this about.
Therefore, what I am asking for is economic democracy and for the recognition that in economic affairs the same principles of democracy should apply as have been established over the years with respect to political affairs. Power should rest in the hands of economically enfranchised workers—workers of all kinds: managerial, white-collar and artisan—and not in the hands of those whose function in industry has been merely the provision of capital.
Of course, it will be said that this is a will-o'-the-wisp and that to put power in the hands of ordinary working people is to court disaster, because they are incapable of understanding the issues involved. But those were the arguments which were used over the last two centuries by those who opposed political suffrage. It was said then that ordinary people were not capable of exercising their votes in a responsible way. It is true that they often make mistakes; they are led to use their political power for the election of unwise governments, and of course if they are given power in economic and commercial affairs they will make mistakes there too. But when one looks at the defects of democracy, whether in a political or economic sense, I believe that, despite those defects, alternative systems are inferior to the democratic method. I have no doubt that we face a long and difficult road before we reach that kind of new suffrage for ordinary people, just as the path to political universal suffrage was a long road and a long struggle. But I believe that in order to face the kinds of problems the nation is facing today, that is the path which we need to tread with determination and the will to win.
7.14 p.m.
Lord Alport: My Lords, the noble Lord, Lord Oram, has made, I think, one of the more controversial and indeed, from our point of view here, one of the
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more provocative speeches in this debate. If I had the parliamentary skills of my noble friend Lord Boyd-Carpenter I would be tempted to try to reply to it in kind; but I am sure the noble Lord will forgive me if I do not follow his arguments but merely content myself, to start with, by following the very courteous traditions of this House and saying that I am sure noble Lords on all sides are grateful to the noble Lord, Lord Beswick, for the opportunity he has given us of carrying out one of the roles with which we are entrusted: that is, to consider and discuss the wider problems facing the country. It certainly makes a change from the legislative treadmill which this House is so regularly required to operate throughout the year.
I do not think that any of us who will speak in this debate expect to influence directly the Chancellor or the Prime Minister. The most we can do is to try and create a climate of opinion in which the financial and economic policies of the Government are carried out; and we have the consolation of knowing that no Government in a democratic society are immune from the pressures of public opinion.
When the present Governent came into power, the principal anxiety in the public mind was certainly inflation. The official diagnosis of the cause of this was the inefficiency of British industry and the ever-increasing demands made on national resources by Government expenditure in general and the public sector industries in particular, especially the exorbitant demands for higher wages without increased productivity. We were at the same time treated to a barrage of criticism, alleging the inefficiency of British management and to some extent the fecklessness and idleness of the average worker. It is perfectly true that there was a serious need to tighten industrial discipline, for more entrepreneurial management and for the generation of a national effort to pay our way in a world in which Britain's historic advantages in the captive markets and sources of raw material of a worldwide Commonwealth, technological superiority and international political muscle had largely disappeared.
There was one factor in the inflationary process which until very recently the Government seemed reluctant to mention—I remember challenging my noble friend Lord Cockfield on this point—that is to say, the huge increase in the price of oil. However, the right honourable gentleman the leader of the House of Commons, and indeed the Prime Minister herself, have recently admitted that that was a major factor in the development of the inflationary situation. I do not think we should forget that it has also been a major factor in the maintenance of the surpluses in our overseas trade balances that we have enjoyed in recent months.
The fact is that, although inflation was a prime concern of the public when the Government came into power—since it was a phenomenon which this country had not experienced except in wartime since the 19th century—inflation did not undermine the social fabric of the country to the extent to which classical economists might have expected. The assumption that our troubles were unique and due to our industrial inadequacy was not borne out, since every industrialised country in the western world, and in the communist east as well, are experiencing the same troubles to a greater or lesser extent. In any case, we perhaps can-

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not equate the industrial and economic environment here even with that of our neighbours in Europe.
Somewhere in G. M. Trevelyan's study of Britain in the 18th century, he notes that the British worker congenitally expected a higher standard of living in exchange for less work than his French counterpart. It may be that was true, and that it is true today; but in the last 300 years that has not prevented this country achieving a record of historical and industrial success. I suppose I am a British chauvinist by nature, but I frankly do not believe that the British workman has any less integrity or skill than a German or Japanese worker, or that British management is inferior to American, or that this country with its splendid assets, inland and offshore, cannot, with the right leadership, continue as a prosperous country and a major influence for peace and progress in the world.
The first conclusion of my argument, therefore, is this. While the startling and, indeed, frightening phenomenon of inflation was understandably the first priority of the Government at their election, their diagnosis of the reasons for it was, perhaps, faulty and the consequences of inflation have been different from those which we were all at that time entitled to expect. It has not, as I have said, made a serious impact on the social fabric of the country; it has resulted in an unplanned, but I believe not unhealthy, redistribution of wealth; it has injected—most important of all—a much-needed realism into the whole field of material values, which had been distorted by the false financial climate created by what I would call the cult of credit. While it was right that it must be contained by prudent Government policies in the monetary sphere, it represents, as I have tried to argue, the world-wide process of economic adjustment which was made necessary by the political and technological changes which followed the Second World War.
I am given to understand that Ministers who decide the Government's policy on economic and financial affairs, have decided that the reduction of inflation remains the first priority of their policy. They fortify their view with the knowledge that some of the economic indices on which they rely are favourable. No one should deny us that consolation and, indeed, thank God for it! But if your Lordships read the Financial Times of last Friday, you will see a report from Paris which says:
" Optimism grows in French industry as recovery continues ".
Across the Channel, under a socialist Government, there are the same welcome signs that the situation is improving. There, as here, industry is more optimistic, production levels are gradually increasing and order books have been filling since November.
It would take a better man than I am to analyse all the reasons for this, but I personally have no doubt that there will be some upturn in the economic situation here, as in other western countries. It has always happened before, and what reason is there why it should not happen again? Indeed, from my experience it is always the same. When there is a slump, everyone thinks that it will go on forever; and when there is a boom, every thinks that there will be permanent prosperity. Each time we learn and we forget the same lesson. What is happening, as I have tried to say to your Lordships, is that the process of adjustment is
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beginning to work through national economies, which is largely independent of monetarist policies or political dogma or, indeed, the contemporary level of inflation.
What does remain, however, is that there are in this country 3 million people unemployed and, on the present projections, there are likely to be 3½ million or more out of work and dependent upon state support and relegated to a minimum standard of living for an indeterminate period ahead. I have confessed to your Lordships on more than one occasion that my political attitudes over the last 20 or 30 years have been power-fully influenced by the 1930s. I make no apology for this. All of us, I think, navigate our public careers by certain stars and, as one gets older, I suppose that some stars become more firmly fixed, and in other cases they disappear, perhaps forever, below the horizon. For me, the Commonwealth is a fading star; but the social consequences, the sheer waste of national resources, the human misery caused by mass and long-term unemployment, is a star which burns as brightly in my political firmament as it did 50 years ago.
The difference, I sense, is that the prospect of long-term unemployment in the 1930s for 2 million or, perhaps, 3 million fellow citizens, caused a feeling not only of anxiety and fear, but of guilt. Of course, I know that things today are different. There are many who will say that unemployment is the result of bloody-mindedness or inadequacy or sheer idleness—" work-shy " was the word used in the 1930s—and that, if the figure of the Manpower Services Commission of 3½ million by 1985 is reached, £14 billion a year will be spent on their maintenance, which, after all, some will argue, should salve our consciences. So why should we worry? Why should we feel any guilt? Or as the labour editor of the Observer asked on Sunday " Who cares? ".
In the Sunday Telegraph on the same day was one of the most brutally cynical pieces of journalism that I have ever read. The writer said:
" Enjoyment of leisure probably requires greater self-discipline and self-discipline is something which our society has rather lost sight of. But humans, no less than animals, adapt to their circumstances. Without this deliberate attempt to sanctify outdated guilts and anxieties, the unemployed would soon realise that apart from the grosser consumer satisfactions, the whole world is at their feet: music, literature, languages, philosophy, drama, all science, art and technology and even travel ".
It went on:
" This may not yet be the moment to urge them to behold the fowls of the air, which sow neither do they reap, or to consider the lilies of the field which neither toil nor spin.
" But politicians and leader writers might at least encourage them to try lotuses for taste ".
If anyone had written that in the 1930s, he would very probably have been lynched. That anyone could publish it today in a leading Conservative paper has a significance which is quite irrespective of the notorious irresponsibility of the particular journalist concerned.
What I am trying to say to your Lordships is that, unless the Government and those who support them, either in this Parliament or in the country, realise that the first priority for their financial and economic policies is tackling not inflation but unemployment, then they and we, as a country, will be in very great trouble. Happily, the ordinary man and woman who provide the raw material for the Gallup Poll have started to give a lead. Seventy per cent. Believe

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that the Government should give greater priority to reducing unemployment than to curbing inflation. The answer to the Observer's labour correspondent is, " Yes, people do care."
I have always felt that in times of prosperity and boom, the object of a Government should be to let the economic processes—market forces, if you like—go ahead without getting out of hand. But in times of depression, high unemployment and general insecurity it should, within the narrow limits of the options which any Government in a free society have at their disposal, seek to mitigate the economic, social and human consequences with which the nation, in those circumstances, is confronted.
I do not pretend that I am equipped to offer your Lordships any outline of a programme of action, but there are certain steps which, for the sake of argument, I shall put before you. First, the mitigation of the present level of unemployment must be tackled—and here I repeat what the right reverend Prelate and other noble Lords said earlier in this debate—by the Government, in partnership with the leaders of organised labour—the TUC, The policies and actions of individual unions have undoubtedly contributed, as the noble Lord, Lord Oram, said, to creating the present situation. If the Government decide to make the conquest of unemployment their first priority, then the trade unions must do the same. In my view, it is not simply a question of whether £1,000 million, £5,000 million or £8,000 million are pumped into the economy. Unless there is parallel action—co-operation; consensus, if you like—by the trade unions, management and Government, so that the trade unions on their side contribute to this by the modernisation of their out-of-date attitudes, of which we have a very good example today in the rail strike, by wage restraint and by reasonable flexibility, any sum of money that is provided from public funds for this purpose will, at best, be a palliative and, at worst, money down the drain. Of course—this is something which the CBI clearly understand—management and industrial leadership must play their proper part.
Under Government leadership, industrial management and organised labour must seek what Mr. Pym called " new approaches to the very concept of employment and a job for life "—a new work ethic. I believe that while the dialogue and negotiation proceed, some things should be done. I see no reason why there should not be differential interest rates to encourage industrial development. I would certainly concentrate tax reductions on encouraging industrial investment rather than reducing personal taxation. In particular, I would reduce the prices for energy used by United Kingdom industries to the equivalent of those paid by our European competitors. For electricity we are still paying up to 16 per cent. more than West Germany and 28 per cent. more than France. I would invest more in industrial training, education and research in high technology. I would direct defence spending to our own industrial production. Indeed, I would do anything I could to try to convince the nation that the Government are determined to use every instrument at their disposal to mitigate the social and human consequences of long-term mass unemployment and to make that the primary object of their policy.
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We must remember—in some ways the noble Lord, Lord Oram, going back into the past of his party, reminded us of this—that neither today nor in the past have the people of this country, at any rate within the last 100 years, been content to accept the idea that laissez faire, the market economy, Adam Smith, Gladstone, or what you will, should be left to determine solely their economic destinies.
If on the present basis we are committed to having 3 million to 4 million unemployed and we do nothing effective about it, they will seek to find a political solution for themselves which none of us in this House would be willing, today, to contemplate. The Chancellor's Budget and the policies of the Government over the next two years will be judged, I suggest to your Lordships, by the electorate as to whether they regard inflation or unemployment as the first priority. If they choose wrongly, your Lordships and I, at any rate, will know that at the next election our writs of attendance on Her Majesty at Westminster will still be forthcoming, though perhaps my noble friends and I may not be sitting on this side of the House.
7.33 p.m.
Lord Stewart of Fulham: My Lords, we are all indeed grateful to my noble friend Lord Beswick for having launched us on a stimulating debate of this kind. I fear that he may feel a little disappointd in not having reached much in the way of consensus, but at least I think we have got this far: we are all agreed that the allocation of resources and distribution of income in this country is determined to a large extent by market forces. We also agree that those market forces are mitigated and altered by acts of state in the interests of social need, greater justice or long-term interests which matter to the nation as a whole, but not, possibly, to the immediate generation of people in charge of resources. I think we would all agree that no only is this so but that it ought to be so. I think also, though with a little less certainty, we would all agree that the trend of policy of the present Government is to try to shift the emphasis to market forces and away from social and other considerations.
The point at issue is whether the Government are right in trying to do that. Some of them do it with a robust enthusiasm and talks about anybody who relies on non-market forces and who is so miserable as to live in a council house or to make use of the National Health Service as though he were a kind of parasite. Others of them do it in a more apologetic tone and, as they cut repeatedly the various social services, explain that it is not really quite so bad as we think and that they will try to put it right in time. That seems to be what is happening.
I will not attempt to try to set out a general programme for economic recovery. I want to take two particular fields where this line of Government policy, this shift towards market forces, has been in operation and to consider what are likely to be the social effects, in particular its effects on the general feeling of unity and mutual understanding in the nation. The two fields I have in mind are education and housing.
I think it will be admitted that in both of those services it is essential that market forces should be very considerably mitigated by public action: by the subsidising of health, of housing and of education.

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The noble Lord, Lord Thorneycroft, seemed to speak of the happy days before we had rent restriction. Whether or not you found those happy days all depended upon how much income you had. In fact, this country introduced rent control because it jolly well had to, since the situation of a great many of our fellow countrymen would have been impossible if they had not done so.
The same is broadly true of education. If we left it purely to market forces, the standard of education which many people get would he totally inadequate to the needs of society, and the degree of inequality between the education of the richest and the education of the poorest would be such as to produce a really dangerous cleavage in society. They are both, then, necessarily services in which you do and ought to interfere with market forces.
What have the Government been doing? Let us take education. Their very first step, the key to their whole policy, was to reduce taxation on the richest people in the country. This meant that they would be in a stronger position to buy private education. The problem in education is that there are a limited number of resources—of buildings, of trained teachers and so on—and that if there is more money made available to those who can buy private education it will be, in part, at the expense of the rest of the population.
Having taken that step on the one side, the next step which they took was to cut the public education service on the other. Then the Tory journalists get to work and say that more people are trying to buy private education. If you have given wealthier people a bit more money in their pockets and if you have tried to damage the quality of public education, there is likely to be an increased demand for private education. That indeed was the result which it was intended to produce. It will mean that there is a greater cleavage between the educational provision enjoyed by different classes and between, therefore, the whole way in which they look at life and feel towards their country. Then you put in an additional bit: You have what is called the assisted places scheme. I think we shall find that very few really poor parents benefit from it. It will be those who already are a little better off than their fellows who will get this extra hit of public money handed to them.
There is a similar development in housing. First, as I say, you reduce the taxation of really wealthy people so that some of them are able to house themselves more abundantly than before. After that, you cut housing programmes so that the plight of people right at the bottom in housing and on the waiting lists will be worse than before. Then you make it possible for some council tenants to buy council houses. But this will mean that among council tenants it will be those who are more prosperous who are able to buy. They will buy and therefore extract from the housing pool the nicer and the more attractive council houses. Again you will have put a wedge between the more fortunate and the less fortunate. Those who already were not doing so badly will be helped to become better off, while those at the bottom will be pushed further down.
You can justify all this by saying—if you can induce yourself to believe it—that this will stimulate people to work harder so that they will have larger incomes
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and can buy their children private education and themselves nice houses. One can believe it; as the White Queen said, if you try really hard, you can believe six impossible things before breakfast, and so I need not really bother too much about that. What the Government arc doing—and this is part of their whole philosophy—is widening the gap between the richer and the poorer and trying to create a general atmosphere that says that the really good people, the really top citizens, are those who do not need to rely on the welfare state at all. They do not think of it as a welfare state; they think of it as a last resort and a safety net. It is this that is socially damaging. Apart from the help that the welfare state gives to the poorest, it is a good thing in itself that one should try to make the difference of educational, housing and health provisions between the more fortunate and the less fortunate narrower—that one should try to bring people nearer to one another in their standards of these essentials of life. That helps to create a more united society, and we may find that the need for a more united society is very much greater in the years to come than we are aware at present.
The right honourable gentleman the Leader of the House of Commons, has told us that things are going to get worse. While there seems to he some argument as to whether he was wise to say it, there seems to be precious little argument about whether he was right. Everyone seems to agree that that was so. As he put it, standards are going to go down. Whose standards? To judge by the philosophy of the present Government so far, not the standards of the richest. Therefore, we rely on them to do all the investing and to make the wheels go round. It will not be the more successful and better-paid workers, because their trade union power will be too formidable. It probably will not even be the pensioners, because an injustice to pensioners is very soon observed and there are many of them, and they all have votes. It will tend to be the poorest people in each section; the badly paid with an over-large family. It will be those who are already pretty desperately up against it. It will be they who will be worse off. That is to say, the division that the present Government are already creating will get steadily worse. That can have some very unpleasant results.
I was very interested to hear the noble Lord, Lord Alport, quote the Sunday Telegraph. I hope that the noble Lord will acquit me of a charge of plagiarism, but I was going to do exactly the same thing myself, but not using the same article. When I was a boy, it was widely believed by many middle-class people that when building council houses, there was really no point putting baths in them because the inhabitants would not know what to do with them. One view was that they kept coal in the baths. A more charitable view was that some of them kept ducks. I assure your Lordships that this was seriously believed by a surprising number of people who had quite considerable educational advantages. I remember also when I was a boy seeing an advertisement on a bus for a firm of moneylenders saying that they arranged loans for ladies, gentleman and clerks of either sex ". This was not thought of as being in any way remarkable. That was how people looked upon their fellow citizens on those days. I should have thought that, in the terrible discipline of

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war and in the more generous atmosphere after the war, we would have got rid of that kind of thing. We now find it returning, and returning not in an organ of the gutter press but in the columns of the Sunday Telegraph—a paper with some pretensions to educational standards and sometimes even to moral standards. If I may take a minor example, an article supposedly dealing with local government finance stated quite calmly that council tenants do not pay rates. This was a piece of rubbish that people who do not like council tenants used to believe and say about 20 years ago, and now it is cropping up again.
More seriously, another article referred to a very unpleasant incident; the incident concerning a young woman who made a complaint of rape to the police and who was then subjected to extremely harsh and brutal questioning with the use of foul language. The article in the Sunday Telegraph pointed out that no one need make a fuss about this because ordinary folk—the kind who have not been to public school—usually use foul language when addressing their womenfolk, and so the girl would have felt quite at home and there was nothing to worry about. If noble Lords doubt what I am saying, they can look up this article in the Library. In a way it is comical, but it is also rather frightening that this kind of thing could be returning. I beg the Government therefore to consider that the objections some of us have to a society based increasingly on market forces is not a mere sentimentality but that the claims of justice, humanity and equality are as powerful in the long run as those of economic efficiency. It is this that the Government, to our great danger, are forgetting.
7.46 p.m.
Lord Underhill: My Lords, until a few days ago it was my intention only to sit and listen to this very important debate, but I am pleased that I am taking part, if only to congratulate and thank my noble friend Lord Beswick for initiating this debate, for opening it in such a constructive way and, if I may say so, for reminding us of the basic philosophy with which many of us joined the Labour Party. I am sorry that the noble Lord, Lord Taylor of Gryfe, is not here, but it was a socialist philosophy which enables us to keep in the Labour Party in order to work out policies which are relevant for the particular time.
I decided to take part in the debates because when on Friday I saw the publication of the Government's Transport Bill, I was incensed when I saw a provision (as in other Government Bills which we have debated in your Lordships' House) that the National Bus Company should set up subsidiaries with a view to disposing of them; and when I heard the Secretary of State's press statement that he had his eye on the National Express coach company services in particular—one of the profit-making areas of the National Bus Company which enable the National Bus Company to meet other commitments.
Carrying on this same fetish, there was a proposal to hand over to the private sector the testing of heavy goods vehicles and public service vehicles—a proposal condemned by a Select Committee in another place and which was almost unanimously condemned by the operators of road haulage and operators of road passenger transport, whether public or private. I will
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not go into the whole public ownership argument, because that subject was debated at some length a year ago, again on a Motion initiated by my noble friend Lord Beswick.
In the Labour Party, we stand for a properly balanced and integrated mixed economy. I should like to ask the noble Lord the Minister who is to reply a question I have asked before. What are the parameters which the Government and the Conservative Party accept for public ownership? What are their criteria for public ownership? I had a Question for Written Answers to which the noble Lord, Lord Cockfield, replied but, frankly, I did not get a proper answer. If one listened to some of the speeches made today, there is still this general feeling that public ownership is wrong and that people should do their best to discredit it. The Government's general position is seen quite clearly in Bills which have passed through this House over the past two and a half years and has been exemplified on our debates on British Telecom and the Post Office where, quite clearly, if any sections are to be hived off it will be the profitable sections, and the rest of the publicly-owned industry will have the bits and pieces_ One of the big purposes of public ownership is that we look at things from a community and national aspect, which enables us to separate services so that we can bring in those areas which otherwise might not he covered. This would be the situation if the Government had their way on public transport. It is only because we have publicly owned services that we have unremunerative routes financed by others.
To listen to some noble Lords, one would imagine that the publicly owned key industries were perfect prior to public ownership. Reference has been made to the gas industry. If noble Lords cast their minds back to what the gas industry was before we took it into public ownership, there were tiny units, many of them local authority owned, all higgledy-piggledy. There were works which were a disgrace. Now it is one of our thriving industries. Again, it is a tragedy that we find a thriving industry dealt with as the Government have dealt with the Wych Farm. There was an initiative; there was a discovery by a publicly owned industry. We are also waiting for the Government's decision whether to do away with the gas showrooms, which are a great asset to the consumer. Of course, as my noble friend Lord Oram has said, there are defects in public ownership, and none of us here would claim that everything is right. But public ownership comes under very close scrutiny. There is scrutiny in the other place through their Select Committee on Nationalised Industries and their Public Accounts Committee.
References have been made by at least one noble Lord to the car industry. One must pass the comment: how did British Leyland and Rolls-Royce come to the position that public ownership was necessary? That was not due to public ownership; it was due to other factors, well removed from public ownership, that it had to be done. Let us look back prior to the war to our thriving motor-cycle industry and ask why that went west. That was not public ownership; that was errors and faults in the private management at the time.
I should like to echo what other noble Lords have said, if we really believe that market forces are the only thing that should dominate our economy you just

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cannot exclude the question of wages. A reliance on market forces in wages means the devil takes the hindmost. It means that the lowest paid sections of society are left behind again. If we believe that market forces should dominate wages, how also do we deal with the non-producing areas?
I agree with some other noble Lords that we have to proceed, maybe slowly, towards consideration of some kind of incomes policy. But if we are to do this, it must not be confined to wages; it must take into consideration incomes of all kinds, and other factors. That is why I, without any apology, fully support the type of proposals that came forward with the Labour Government, and were successful for some two and a half years, with the social contract. That sort of understanding is vital. The proposals that are coming forward in the Government's Employment Bill will not assist an attitude of mind which can lead us to some consideration of incomes policy. It will do just the opposite.
My noble friend Lord Beswick referred to some of the resentment felt by sections of workers when they see some of the extravagances that are reported day by day in the newspapers. Naturally, none of us would support a policy of resentment and envy, but one reads of million pound houses, and of a chief executive of a big company receiving last year £477,100, which is almost double what a skilled man will get in 40 years of work. Then we have the case where one family is likely to receive £20 million as a result of the sale of a property on a hospital site at Hyde Park Corner. These things make people resentful. If we want to get the co-operation of workers for a sort of incomes policy and other matters we have to do our best to eradicate that sort of extravagance, which basically is immoral to any civilised society.
I listened to what the noble Baroness the Leader of the House said. I believe she recognises, although it was not apparent in her speech, that the improvements in productivity have been as a result of agreement with the unions. Otherwise we would not get that improvement. In many cases the unions and the workers have agreed to new technologies which have had the result of taking their own jobs away. This has to be acknowledged.
There is another aspect of market forces that I would mention to your Lordships. I saw in The Times only this Monday an article which referred to an editorial which appeared in the Lancet, urging tighter control over the growth of private health schemes. It referred to 35 private hospital schemes awaiting planning permission. It referred to a 100-bed private hospital at Southampton which is facing a National Health Service hospital. The Lancet in its editorial said that there was competition for scarce resources and specialist services, and that heed should be taken of where market forces are taking us. The same Times article referred to a change of view apparently in the Royal College of Nursing. That article said that the College used to believe that the private sector should be allowed to expand according to market forces. They are now getting increasingly worried as to what is happening to the National Health Service as a result of this. What we must ensure is that market forces do not lead us to a second-rate National Health
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Service, on which the great mass of the people depend.
I do not regard the Motion moved by my noble friend as in any way an attack on the private sector. What it is saying is that we must not have over-reliance on market forces. I recognise—I think all noble Lords recognise—that the one essential thing is consumer choice. It is one reason why we support a mixed economy. So often Ministers on the Front Bench opposite have referred to a mixed economy, but by their actions we have seen no acceptance of the position of public ownership in our society today.
I believe there will be general agreement that one of the problems over the years has been the failure to have adequate investment in industry. That is not just a Labour view; it is a view which has been put forward on all sides. If that is so, how can we leave that solely to market forces. I am sorry that the noble Lord, Lord Boyd-Carpenter, is not here. He referred to a quotation from Nye Bevan. I think you will find that what Nye Bevan was really urging was effective planning of the nation's resources; that is what he was really advocating, both investment and other things as well.
My Lords, we have available manpower, over 3 million of them wanting to work. During the unfortunate situation of the rail strike we have seen the efforts that people are making in order to get to work to carry on their jobs. We have available properties; we have spare capacity. What we have to consider is how we can use these resources for the benefit of the community. It is clear that we must stimulate investment, and it has to be stimulated where really needed, in industry, The noble Baroness the Leader of the House said that there is need to have trade boosted by customers. Surely, that means also that we have to stimulate demand—not a consumer spree, because that would be dangerous and would suck in imports.
What has the CBI said? In a survey mentioned in the press this week—a survey of some 1,700 manufacturing companies—93 per cent. of those firms said that a shortage of demand would limit their production in the coming period; 77 per cent, are still operating below full capacity; four in every five of those manufacturing companies have less than four weeks work on their books, and 42 per cent. of them expect to cut jobs in the next four months. Alongside that position in industry reflected by the CBI, we have the report in yesterday's paper, the annual survey of the National Housebuilding Council, that the number of new houses started in 1981 was 155,000, the lowest figure since the 1914–18 war. Yet we have a vast number of unemployed construction workers.
Yesterday, both the TUC and the CBI published their proposals. I shall not mention the details because all noble Lords will have read them. However, the TUC claim that their proposals—this is their claim—would result in 677,000 new jobs which would, they admit, lead to 1·1 per cent. rise in inflation, but also 4 per cent. growth. I believe that the policies that the Labour Party advocate will be those needed to cope with the situation. But we must deal with the situation as it is today. I am certain that no one who talks about consensus believes that all the political parties will give up their own particular views and aspirations and all agree on a consensus. But I believe that there are matters

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upon which we can agree now, even though we might go our different ways when the election comes.
It is clear that there are similar threads running through the CBI and TUC statements. It is also clear that there are sections of Members of Parliament on the Government Benches who have running through their views threads similar to those that are running through the CBI and TUC statements. I am certain that that is true of many noble Lords in this House. Therefore, I should like to see some sort of general agreement—not necessarily on all the TUC proposals—some sort of discussion as to what can be done, and where there would be proper spending investment on constructive works and not on those that would encourage a consumer spree. That would give jobs and work to the private sector as well as obtain materials for the private sector.
I believe that there must be a reduction in energy costs for selected industries. I was interested to see that the generating board only yesterday made certain proposals in this respect which I believe they have conveyed to the Government, but as regards which they are awaiting a reply. There obviously must be rather urgent efforts to deal with the interest rates which are preventing many industries from gaining their necessary finance and there must be the fullest development of investment for training and technology. However, last of all, if we really want to succeed there must be the fullest consultation with the trade unions in order to carry through a proposal of this kind, and in order to get their support on the technology changes which are so urgently needed.
8.2 p.m.
Lord Marsh: My Lords, the Motion of the noble Lord, Lord Beswick, for which all of us are grateful, places some stress on the need to achieve a consensus. If I may say so, at the risk of sounding impertinent, as a new Member in this House I am impressed with the speed with which the House has reacted to such an appeal. It is clear that on all sides there is no one in favour of unemployment. That does not surprise me because having had some experience of both Houses of Parliament I have never found anyone in British politics who was in favour of unemployment. However, at least having reached that degree of consensus it now means that we accept with it that there is not a greater degree of moral rectitude and compassion on one side of the House than there is on the other, that the problems we face are the problems which concern and worry all of us. As has been stressed, everyone is concerned—and there has been a consensus—about the state of the British economy. That does not surprise me either because in every debate that I have heard over the last 25 to 30 years politicians of all parties have been expressing concern about the state of the British economy.
The noble Lord, Lord Stewart of Fulham, made reference to various statements which appalled him. They were statements of great bigotry. I think that everybody would also express their abhorrence of those statements too. So in the course of one afternoon in your Lordships' House we have found this area of consensus. It is very easy; there are no problems at all. And if that were all that we were seeking to do this afternoon we would be able to go away not
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having solved any of the problems but all agreeing that our hearts are in the right place. However, I suspect that that is not simply the purpose of the debate and I find this a somewhat nostalgic occasion.
I joined the Labour Party at the age of 15 because I believed that a Labour Government would take control of the economy, that they would take it out of the hands of a small band of brutal capitalists who were determined to grind the oppressed workers into the ground. I had been influenced, as are many of your Lordships—all of us are at various times—by my own experiences. I make no boast about it, but at a time when some of my contemporaries in my former party were very worried about the behaviour of the staff and the jolly japes they got up to at their public schools, my father was unemployed for two years. We lived in a house which did not have a bathroom. Indeed, I never spent a night in a house which had a hot-water tap until I was 20. Therefore, one tended to judge politics at the age of 15 in the 1940s, by what happened in the 1930s. I think that you could get agreement nowadays by most people that you could find very little support for what happened in the 1930s on any side anywhere. I was only 15, which was a justification if you are only 15.
Then, in 1945 we were on our way. We arrived at the gates of the new Jerusalem. We won the election and I was enthusiastic. Great industries were taken into public ownership and there was enthusiasm throughout the land. We had a massive majority. But our policies did not work. After a period of time came the 1950s and the very workers who had elected us—I give only a personal view of history as I saw it—with a massive majority decided that whatever else we had done for whatever reason, we had not been able to meet the hopes and the aspirations of the people who had supported us. I say that as a fact because they then promptly invited the Conservative Party to return to office in our place, which I had really not thought would happen in the beginning.
However, I persuaded myself, as did many others at that time, that there were many reasons for the problems and indeed there were many reasons. The problems went back many, many years. They were not the problems of the Labour Government specifically: they were problems which sprung out of having been an imperial power, problems which stemmed from the war, and a whole range of other things. I persuaded myself that we would get another opportunity, that the workers had got it wrong and that it was only a matter of time before the Conservative Party was swept out and we could once and for all return to get down to the task of constructing a properly planned economy.
In the event it happened, but it took rather a long time. It was 13 years before we got back. But after 13 years of Conservatism the Labour Government then returned to office. In 1964 I was honoured I appreciated it—to enter a Labour Government and in 1966 I entered the Labour Cabinet. My colleagues in that Cabinet—many of them now in this House—like Ministers in most Cabinets in my experience, were sincere and were desperately anxious to be able to achieve all the things for which they had fought so hard and in which they desperately believed. At the lowest level they wanted to stay in office; at the highest

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level they wanted to achieve things and do things which were of value to the nation in which they lived. They worked in that Cabinet and that Government as hard as probably any other Cabinet and any other party has worked before. We tried to plan our way to an economy which would at least stand comparison with our overseas competitors in countries of similar size, in countries of similar resources. But again those policies did not work.
One of the extraordinary things that I have found about our debate this afternoon is that I have listened to speeches which make me wonder whether some of the meetings in which I sat ever took place. It was said by a number of speakers that it is important that we should get together a greater dialogue, a better working relationship with the trade unions. That is another area of the consensus upon which we can all agree. Nobody doubts that. It has proved a bit of a problem, but none the less we all agree. In fact, the Labour Government found that its relationships with the trade unions were, in reality, at least no better than they had been with previous Governments. We had all the problems which arose at that stage. We found ourselves forced to devalue; we found ourselves forced, by events totally outside our control, at meeting after meeting to sit down—as did our Conservative successors—planning how we could cut back on the plans we had drawn up for the social services. We were forced by events, not because we were wicked men, not because we were insincere men, but because we found ourselves increasingly faced by forces over which we had no control and before which we had to bow. We found ourselves saying among ourselves—as I am sure did other Governments—" Thank God for the International Monetary Fund ", whose officials forced policies upon us in public which we welcomed in private because we could not get them across of our own volition.
In 1970 we were again thrown out by Labour voters. No one who has left a political party will ever underestimate the degree of commitment which one has to individuals and to an ethos and environment in which one has lived. If we could not satisfy the very people on whom we relied, we had no purpose, because they were the people we were there for; they were the people who justified and made purposeful everything that we had been doing and saying. If we could not satisfy them, there was not much point in the exercise. The slogans and the oversimplifications with which some of us had indulged ourselves for years, were simply no longer convincing to ordinary people who worked in the shops, the offices and the factories.
It is a fantasy to believe that there is some great gulf with one side of the divide inhabited by rich, powerful capitalists, and on the other side the oppressed workers. In this country the electorate splits roughly down the middle, as it has at almost every election since 1945. There is as much a cross-section in the Labour Party of middleclass and wealthy people as there is in the Conservative Party. It is nonsense to look at 12½ million voters and retreat to a fantasy world, pretending that they are an alien race combining together to defeat the other half of the nation. It was, in fact, the very people for whom we worked who decided that they were disillusioned with us.
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It was at that stage that I, personally, decided to leave the Labour Party. Not because at that stage it had swung to the Left. Indeed, today the Social Democratic Party, in so far as I understand its policies, is to the Left of the Labour Party I left 12 years ago. So I resigned a safe seat eight miles from the House of Commons, with a place on the Opposite Front Bench, because, on the evidence that was before me, the policies which I had supported and in which I believed, the policies which constituted the framework of my political life, no longer seemed tenable.
I did not realise at that time that there was within such a decision literally hours of television time available; that one could waive one's conscience like a brave flag around the nation. It seemed to me that if you had fallen out of sympathy with the party of which you were a member, you resigned from it. It was much later that I discovered you turned this into a sort of religious crusade. At that stage it seemed clear to me that the determination to ignore market forces had reacted to the disadvantage of the great mass of the population; that an acceptance—and I make this point—of market mechanisms does not mean a total lack of Government intervention any more than a belief in personal freedom accepts the right of every individual to have total, uncontrolled freedom to do whatever he wishes.
The argument is bedevilled by people who seek to see in the argument in favour of a greater acceptance of the market mechanism, a greater degree of inhumanity. Nowadays, quite properly, no one will get political support who does not accept that there must be a basic standard of living for people; no one will get support who believes that you do not have an obligation and a duty to support people who are disadvantaged in various ways. That is not what the market mechanism is about. It is a belief that you cannot run a country on the same basis as that on which you run a corner shop.
Several noble Lords: Hear, hear!
Lord Marsh: My Lords, that is exactly why you cannot plan it like that. Complex organisations have to react to outside events, and there is very little convincing evidence to anyone who takes a dispassionate look at the British economy that attempts to manage it in detail—what I believe the Treasury mandarins describe in their wilder moments as the " fine tuning " of the economy—under either party, have been a conspicuous success.
But the other nonsense is to suggest that the economic problems which we face today are economic problems of the last two and a half years. Whether or not one agrees with the present Government, it is quite clear that the economic problems we face result from a consistently poor economic performance over the last 30 years, and under both Governments. Indeed, it has not been simply Labour Governments who have sought to plan the economy. Mr. Heath, as Prime Minister, was one of the most interventionist, enthusiastic planners we had. He was matched on the other side by Mr. Healey, who was one of our first monetarists. So both sides have had their spokesmen on this.
However, we still have suggestions that a change of Prime Minister or even a change of Government would

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make a major difference. I think that this is a total nonsense. The fact is that the problems that we have faced have arisen basically because, as someone said, the market is about customers, whether they be nations or whether they be individuals. We have not been able to sell; we have not been able to earn the sort of living which our competitors have had because of price, quality and delivery dates. In many cases we have been faced with gross overmanning. Before that is turned into a party argument, I am bound to say that as a former Minister of Power, as a former Minister of Transport and as a former chairman of British Rail, everyone of my colleagues, including those in this House now, enthusiastically supported as a priority the need to de-man the gross overmanning in some of the nationalised industries.
One of the causes of the size of unemployment today is that if you de-man by millions in the public sector, it is not surprising when you do that in contracting industries that many of those people are not mopped up by other jobs. But certainly all Governments were agreed on the need to reduce the manpower levels in those industries. In the last 30 years we have tried every conceivable method. We have tried pay freezes; we have tried price freezes; we have tried discussions with trade unions. One of the problems of which many noble Lords on this side of the House are aware is that general secretaries of trade unions do not have the power and the authority to deliver their members, and they know that when Governments seek to get their agreement to these matters. We have tried to ameliorate trade union pressures by using legislation to provide unions with privileges and protections unknown to any other section of society. The fact is that once again it has not worked.
We have poured billions of pounds of public money into declining industries and more millions into organisations designed to stimulate the growth of new industries. All this, not under one party, but under all parties for 30 years or more. Governments have enlisted the aid and advice of every eminent economist on whom they could lay their hands. I am bound to say that the efforts of all these gentlemen to find new and ingenious ways to reverse the economic and industrial trends in this country make the efforts of his late Majesty King Canute seem positively modest in comparison. It seems to me that the evidence is overwhelming that in a free society market forces will always prevail in the long run, whether one likes it or one does not. Indeed, that should not be surprising because the market is basically the customer.
I have some sympathy—and I finish on this point—with the Polish authorities even, because if you have a State-controlled society which seeks to control the market rather than to give people that which they are demanding, at the end of the day you can only impose that policy by force. To seek to have a centrally-planned economy in a free society is to seek a fairytale land, which was defined clearly by the noble Lord, Lord Beswick—and which is peopled increasingly by candidate-members for the Social Democratic Party.
8.21 p.m.
Baroness Lockwood: My Lords, like other noble Lords who have preceded me, I should like to pay tribute to the noble Lord, Lord Beswick, for enabling
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us to have this debate this afternoon and evening. I do not propose to follow some noble Lords and enter into the controversy about over-reliance on market forces—a subject with which the noble Lord, Lord Thorneycroft, had great fun and caused us all to have some welcome amusement. I want to concentrate on that part of the Motion which is concerned with shaping the future society of this country.
I think that all your Lordships would agree that we are really facing two parallel problems; separate but interrelated problems. The first is the short-term recession. Short-term, one hopes, despite the speech of the Leader of another place, which has been referred to during the course of the debate. The features of the short-term problem are high unemployment, Government expenditure cuts, and inadequate industrial development. The long-term problem is the process of changing over to a high technology industry capable of supporting the nation's needs.
The features of this problem are a smaller but more highly educated industrial workforce, high investment in automated systems and new technology, and the development of the supporting service sector. We cannot look at these two problems in isolation because inevitably they affect one another. For example, the present problem of unemployment is exacerbated to some extent by moves to more automated production and improved productivity. Equally, there is a resistance to entering into new methods of production because of fear of unemployment.
Again the economic squeeze means that there is not enough investment in the future development of our capital resources and our human resources. These are just a random selection of a few of the problems and inconsistencies which are facing us. But we must not forget that every time we employ a short-term economic remedy to current problems we inhibit our capacity to lay the foundations for a better and more prosperous long-term society.
There is therefore a need for a strategy that reconciles these two contradictory elements. I would suggest that there are two priorities involved in this. The first is to deal with the modernisation of our industrial infrastructure. There is a need here for capital investment, and there is also a need for investment in scientific and technical education and training. The Government can give a lead in both these respects. There is a consensus between the CBI and the TUC on the need for Government investment in the public sector of industry. Both sides of industry are of the opinion that an input of Government investment here would stimulate investment in the private sector.
Again, on a Government lead I would ask that we could reconsider the policy towards higher education in this country. Given the fact that we are already well behind the United States, Japan and most of our European neighbours in the numbers of young people who are involved in higher and tertiary education, it seems absolutely nonsensical that we should choose this time to cut our investment in higher education. I think that it was the noble Lord, Lord Boyd-Carpenter who referred to the appetite of the electorate to eat the seed-corn, but there is another problem; that is, casting the seed-corn aside. A time when we shall be reaching a peak in the numbers of 18-year olds coming out of the schools, is surely the time when we should be thinking

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of investing in them. They are the seed-corn of the future.
1 accept what the noble Baroness the Leader of the House was saying when she spoke about the need for industrial recovery to come first, before we could think of investment in the social services and the service sector. The second priority—and 1 would put it not far behind—is that we must accept that really the industrial and the service sector go hand in hand. They must proceed in tandem, and they must be developed in tandem.
I read recently that Japan has 10,000 industrial robots. Britain has only 500. But I also understand that GEC is to be one of the world's three leaders in the manufacture of industrial robots and automated factory systems. That means, one would hope, that not all the products of GEC will be exported but that some of them will be used here in this country. That of course has implications for capital investment. But apart from that, it raises the human problem that other Members have raised: what is going to happen to those industrial workers, those manufacturing workers, who would have been employed had it not been for the introduction of the robots? That is why it is absolutely essential that we should be examining just how we can develop the service sector.
There are two sides to the service sector. There is that part which is essential to industry and to manufacturing, and then there is the social part of the service sector. Both of them are of concern to us and need to be developed. We should be asking ourselves: What kind of an education system do we need for the future? While I accept that there is a need to concentrate on the scientific and technological side of education at the present time, nevertheless I hope that we shall not neglect too much the arts and the humanities, because the kind of society we are going to create if we neglect this aspect of education is a frightening one.
We should also be asking what kind of personal and social services need to be developed. I would suggest that many people are of the opinion that instead of spending money on redundancy benefits—and one has in mind the enormous sum that has been put on one side, or been allocated, for university academics who are likely to be redundant under the present system—and on unemployment benefits and all the other costs involved in supporting the unemployed, it would surely be more sensible to be looking at the development of the service sector to see how we might use the spare manpower resources which will be available to us and how we might meet the very real needs of the community—needs in terms of education, all the medical services, the care of children, the disabled and the elderly.
I would enter a cautionary note here. There are some who look on the future workforce as being much reduced in size and almost entirely male. They also look on the caring role in society as being a purely female role within the context of the family. I suggest there is no easy solution like that available to us; it is neither equitable nor practicable. The 10 million economically active women in this country rightly regard themselves as just as essential a part of the labour force as their male colleagues, with the same needs for access to higher education and training.
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What worries me, apart from the overall worry and concern about the cutback in higher education, is the fact that because our schools are not yet geared to turning out as many girls as boys with A levels in maths and science, the girls will lose out in relation to the reduced number of places that will be available in the universities and colleges of technology, because it is in the areas where the girls are qualified now where the greatest number of cuts will come.
I did not want to develop that theme tonight; I wanted to concentrate on the need for us to have an overall concept of where we want British society to go in the future—to look at our short-term and long-term problems together in parallel so that each solution that is put forward can support, rather than undermine, the move towards progress. I am convinced that unless we have such an overall conception of where we want to go in terms of industry, employment, education and the personal social services, we shall just stagger from one short-term problem to another. As has been pointed out, there appears to be no clear conception on the part of the Government that they have those two major considerations in mind and that they are making a concerted effort to deal with both.
8.34 p.m.
Lord Balogh: My Lords, I am grateful to my noble friend Lord Beswick for calling attention to this matter because, in my view, we cannot discuss it enough in an effort to try to impress on the people who are in command of the situation how we feel about these problems generally. Unemployment stands at levels which are now becoming very dangerously infectious. If we cannot reverse the situation in our schools and universities—the noble Baroness, Lady Lockwood, dealt with that part of the problem—we shall see a downward spiral where cause becomes effect and effect becomes cause, and after a time it will be impossible to know whether we can get out of such a dreadful situation.
The history of economic theory is closely knit to the history of economic systems. As basic situations change, economic theory follows suit. Contrary to earlier hopes, economics has not been able to lead to an improvement in policy decisions. The violent economic fluctuations of the 60 years before the First World War show that conclusively, and of course we are now about to repeat the unprintable, because we have been pushed from one side to another.
After the politically settled repudiation of Marxism, the neo-classical equilibrium theory suggested a model for the analysis of mixed market economies. I assure noble Lords that I must make these points now because my later political argument will depend on my having made these points. That model claimed that there was an inbuilt automatic stabiliser in the system and that the market economy was the only rational solution to our economic problems. By the end of the 1920s that view was generally accepted in the non-Soviet orbit.
That model, however, did not work; the crisis of 1929, which became the Great Depression, proved it to be wrong and it led to the rise of the Keynesian revision of the old principles and policies. It looked, however, when those were applied immediately after the war, that there was a definite view, held in common, that had been arrived at. Indeed, from the end of the Second World War until 1970, an uninterrupted in-

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crease in production took place, incomes rose and the need for a lessening of inequality seemed about to be achieved.
Alas! the actual history was very different. In Britain, the Labour Party, which had adopted Keynesian doctrines, was twice brought to its knees by a continuous increase in prices—that is by inflation—and the two great parties seemed completely unable to produce a well-thought-out policy package which might at least have proved acceptable to both sides of industry. In the Anglo-Saxon countries on both sides of the Atlantic, unions, employers and Government stood out against an orderly prices and incomes policy which would have eliminated the yearly dogfight over wages. The result was irreparable damage to the economy, and very few dared to state frankly that only a compact on salaries and wages, as part of a social policy package, could stop the continued deterioration of the economy with its incalculable social and political consequences.
The Labour Party, in its last attempt in 1978–79 to cope with the problem, was unable to obtain sufficient support from the trade unions, and it was forced by the International Monetary Fund to pursue pre-First World War policies, leading to the party's loss of power in 1979. The victorious Tories openly repudiated all idea of an incomes policy, and the hopes which had foolishly been based by the general public on a return of confidence which would automatically start an upward spiral were woefully disappointed. The fall in production which succeeded the steady advance under Keynesian policies was aggravated by further cost in inflation.
The new attitudes led to an increasing amount of inter-class bitterness. The great monetary experiment has already cost over the country vast unemployment and billions in loss of production and income. Most economists, despite the worsening situation in all our countries, must feel relieved that there can be no possibility of excusing the failure of this experiment on the grounds that it was not thoroughly applied. We shall know beyond peradventure the value of monetarism as a basis of policy making.
Mrs. Thatcher's favourite gurus have given the game away. Both Hayek and Friedman obviously tried to dissociate themselves from her policies. Both, but especially Friedman, are consummate experts in wriggling out of tight intellectual situations. The asperity of the tone of their exchanges suggests disenchantment on both sides. Professor Hayek blames his friend Milton for softness, for trying to persuade Mrs. Thatcher to seek a gradual solution. Professor Friedman in his turn tries to shift responsibility for the blunders of Friedmanite Ministers on to the stupidity of the Treasury and the Bank of England.
Only expansionary force in the United States seems to come from the vastly increased defence expenditure which has its own deadly but not economic dangers. The world depression which is used by both Reagan and Mrs. Thatcher to explain and excuse the grave malaise which has struck us, is precisely the result of their policies. It will stay with us as long as they remain in command.
The British problem is no longer a question of the temporary interruptions of progress, of a fluctuation of the economy which heals itself. The destruction of
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firms, indeed of whole industries, is in the balance. Yet with unemployment at its staggering levels further cuts in Government expenditure are demanded by the monetarists. They continue to cling to the idea that the control of money supplies not only a necessary but also a sufficient basis for re-expansion.
I must emphasise that the present policies will lead us into a situation in which the balance can be maintained and inflation avoided only at the cost of having a large perpetual labour force idle. It is the clearest vindication of the Marxist theory of the reserve army and the failures of capitalism. It is extraordinary that this should not be realised by the economists who have been touting this insane doctrine, or by the politicans who have accepted it.
The measures which now seem to be contemplated by the Tory Government, instead of easing the demand situation which is tight, are doing exactly the opposite. They are squeezing demand further, as if one could rectify a situation in which there is insufficient demand and idle real resources, by deflation. We need an orderly and civilised way of influencing income, but that cannot be achieved without a balanced policy package, a package far beyond the mere determination of wages. It must embrace general social and financial policy and prevent inflammatory grants of huge proportions as golden handshakes to hide high salaries. If anybody thinks that free collective bargaining will bring about a balanced structure of wages, according to the market, whereas an incomes policy will lead to distortion, he must be a Rip van Winkle.
It is astonishing that so many intelligent and well-meaning people can embrace a faith which purports to be able to regulate a system as complex as the British economy by one single indicator which also purports to be a target. It is not difficult to see why this foolish faith was embraced by so many and such differing people. It absolves personal responsibility. Policy is dictated in a mechanical way by a sort of computer.
There are further considerations about the consistency of the money supply itself which would prevent any sane person from using it for policy-making purposes. The difficulties arise because the money supply itself is a fluctuating entity, because of the substitutability of other things for money. If you squeeze one type of money, another type of money is introduced. For instance, when the Germans lost the First World War and the German mark deteriorated, cigarettes and bully beef acted as money.
It is one of the odder aspects of the present situation that Mrs. Thatcher and Mr. Reagan regard this monetarist policy as establishing a secure base for re-expansion. What Mrs. Thatcher has done is sufficient to cause embittered demands by the unions as soon as their bargaining powers were restored by an increase in demand. Much the most important conclusion of this analysis is that mixed economies are basically unstable. They are set to be pushed by an alternation between inflation and depression, if not by both at the same time. The outlook is darkened by the fundamental change which is taking place of economic institutions and their functions.
Manufacturers, and a growing number of services, can, I believe, benefit by a higher scale of output; in other words, economies of mass production because of the vast overhead costs of research, development and

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production. Only close co-operation between the main industrial countries and the basis of agreed principles might avoid devastating fluctuations. Far from Professor Hayek's assertions that there is no such thing as a cost-push inflation, all signs point to the opposite. With oligopoly in manufacture, cost-push inflations have become the rule rather than the exception. In that configuration orthodox monetary and fiscal policies will not result in an optimal distribution of resources but in an ever increasing series of crises. We are not living in their never-never land of perfect competition.
In my opinion, if the present policies continue they will not only further increase misery but will also limit the capacity for recovery. Before the present slump Britain already suffered from a deficiency in capital investment. Its shrinkage has been accelerated by a policy which relics on ultra high interest rates. If a recovery occurs the unions will be embittered and set to regain their earlier power. What is almost certain to happen is a deepening of the slump and more acutely bitter class feelings. Thus, full employment tends to lead to inflation because the income distribution does not take into account the increased power of the unions. The attitude to income distribution relates to a past situation. Without a solution, which must be political, of the base programme of wage costs inflation, the end of the crisis is not in sight.
8.50 p.m.
Lord Boardman: My Lords, the noble Lord, Lord Balogh, has ranged over a wide economic field, and I hope he will forgive me if I do not attempt to follow him in this tonight. Perhaps I shall be wiser when I have had the opportunity of reading it and of considering it more fully, as I shall tomorrow.
My Lords, I think the kernel of this debate really is whether market forces are a good thing or a bad thing. There seems to be general agreement in all parts of the House as to the problems which afflict our economy at the present time, but on occasions there were the implications expressed in the speeches of noble Lords opposite that many of these problems—whether they be the interest rates, unemployment or whatever it might be—flowed from an over-reliance upon the market economy. I should have said straightaway to the noble Lord, Lord Beswick, how happy I am to have the opportunity to take part in this debate, and I congratulate him on bringing it forward. But I think the emphasis on the allegation or suggestion that the ills can flow from having an over-reliance upon a market economy does not tackle the question which was posed by my noble friend Lord Boyd-Carpenter earlier, as to no noble Lord having suggested what the alternative should be.
Indeed, since my noble friend spoke I have waited with interest to know whether there was a proposal as to what should replace this over-reliance on the market economy. Because if there is an over-reliance upon that, then there must be an under-reliance upon something else, and to right the balance we must inject something else into the economy and into the particular planning. Logically, that must of course be some centralised bureaucratic planning, with all the controls and paraphernalia that go with it—price control,
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quality control and the like. Indeed, at one stage in his speech the noble Lord, Lord Beswick, referred to certain wartime controls. I am sure he would not be suggesting that the over-reliance upon the market economy should now be replaced by the utility schemes, quotas, coupons and the rest that there were; but that would of course be a logical alternative to the market economy if that is in fact failing to serve its purpose.
Indeed, it is an alternative. It is an alternative which is used—and many of us may believe it is excessively used—already in a part of the economy; that is, in the public sector. The public sector is largely insulated from the market economy, and it has to be so because there is no scope, or very limited scope, for competition between utilities. The market economy does not play an effective part in the controls there. As I think my noble friend the Leader of the House said in her speech, we have yet to find a discipline which will enable that part of our economy, the public sector, to respond to consumer choice and consumer wishes, because indeed it is that which I believe is the imperative that we must obtain.
I contrast the impact of the alternative systems that there are in existence. If we take the world scene, my noble friend Lord Thorneycroft referred to the great prosperity in the United States of America—an economy which is devoted to the competitive market. Contrast that with the sort of economy which applies in Russia and in others of those sad countries where freedom of choice and the rest do not exist. Indeed, in Russia, which has no competitive market environment, they are unable to feed themselves, to obtain the grain; whereas the United States of America, with its great surpluses, is able to feed itself and to export a massive surplus.
At home, too, there are many contrasts. The noble Lord, Lord Rochester, who explained why he could not be here this evening, referred to the impact of Marks and Spencer. But there are many stores—and, indeed, many little corner shops in back streets—where the competitive environment in which they operate, the way in which the customer can shop around and go next door, means that we have an efficient service and good value for money. Otherwise, the shopkeeper, whether he be Marks and Spencer or the corner shop, will not survive.
If one contrasts that with those places where no market forces operate—which, as I have said, are largely in the public sector—I ask whether any householder really believes that he or she gets value for money from the rates they pay or the electricity bill that they have to meet. They may well do so, and I am sure that many rates are reasonable; but because they have no choice but to pay, they can never remain satisfied that they are getting value for money. If I could quote an example, there are the ratepayers of a place like Bassetlaw, which managed to put up its rates by 180 per cent., and yet the shopkeepers there, if they attempted to put up their prices by anything other than a small percentage, would find that they were phased out of business.
My Lords, in 1981 public sector prices, which are largely protected from the market, rose three times as fast as those in the private sector. Surely that can be neither socially nor economically desirable—words which are used in the noble Lord's Motion. The

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problem is not over-reliance upon the market; it is, as my noble friends Lord Boyd-Carpenter and Lord Thorneycroft said, under-reliance upon the market. As the noble Lord, Lord Marsh, said in a very interesting speech indeed, Governments—he said successive Governments but I would suggest primarily Labour Governments—have legislated against market forces.
Indeed, Lord Rochester said that those engaged in the public sector tended to be criticised. I would dissociate myself from those criticisms. I share with him the belief that those engaged in the public sector, leaders of the nationalised industries and the like, have no less competence or ability, or will to work, than those in the private sector. But they do operate in a different environment; they have a different motivation. The jobs of those in those industries do not depend upon giving better service or their customers will go to the shop next door. There is no shop next door. 1 believe that this contrast between the efficiency and effectiveness, and regard for those who are supplied, of the competitive market sector, as compared with those who come from the public non-competitive sector, is a very stark one indeed.
The noble Lord, Lord Beswick, has of course had considerable ministerial experience of the consequences of ignoring the market economy. He had the task of reviewing steel plant closures in the mid-'seventies, and, as he will recall, he proposed a deferment of the closures of many of those steel plants and recommended that they should be kept in being—providing, in fact, in the result, far more capacity than the market could then absorb. I will give way in a moment, but perhaps the noble Lord will allow me one moment to finish. I can sympathise with him in the problems—I had the same problems at one time—and the dilemma which faces any Government in such conditions. But I think the noble Lord may agree that the social and local problems that those closures would have incurred weighed on him more heavily than the economic viability of those plants continuing in operation.
Lord Beswick: My Lords, since the noble Lord seems to be making a point of this, may I tell him that the trouble then was under a plan devised some years before. The smaller sites were to be closed down on a certain time-scale but the bigger plants had not come on stream. I was advocating an extension of the smaller plants simply because the bigger ones were unable to meet the market at that time.
Lord Boardman: My Lords, I accept what the noble Lord has said. T believe—and I give him credit for this—that the social and local implications of closure weighed very heavily on his mind, as they must on that of any Minister faced with that choice. And they weighed heavily on this Government, too. The point that I wish to make is that at the end of the day the consequences of not recognising the market forces mean that the closures become more severe, unemployment becomes higher and losses greater. It is a problem which faces Ministers and those concerned with running large industries in the public sector.
I accept that there are whole sectors of the economy which cannot operate the market forces. The idea of a mixed economy is accepted by this Government as by other Governments. In every way possible, the
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thrust must be towards the competitive choice, the consumer choice, as the best discipline and the best way to serve the consumer, the best way to secure efficient suppliers and to ensure that suppliers survive and retain their employees and provide them with a career structure.
The greatest number of unemployed in recent years has come from these industries that were too long protected, which have been kept alive by public subsidy until the burden became intolerable. It is from them that the greatest number of unemployed has come. if market forces had been allowed to operate then, I think, the shift would have been more gradual, the hardship less severe and the measures that had to be taken less acute and less resources would have been wasted.
Lord Balogh: My Lords, the noble Lord says " market forces ". What market? Does the noble Lord think that the market for wheat, for instance, is not different from that for automobiles, and that again different from others? The whole reaction and counteraction in these markets depends upon the form of the market. Just to say, " the market forces " is not enough.
Lord Boardman: My Lords, I believe—and I am sure that the noble Lord will not disagree—that very large sums have been paid to industries to keep them in being at a time when they had ceased to be economically viable. The history of our country's economy, followed under successive Governments, shows this. And it has been done for the best of motives: because of a reluctance to accept social consequences that would otherwise flow. My argument is that had successive Governments been prepared to allow market forces to operate, instead of retaining a force which suddenly ceased to be viable after carrying a burden for too long, then this sudden impact of closure would not have happened. That was my argument.
It is not entirely a question of nationalised industries. The noble Lord, Lord Taylor of Gryfe, referred to Linwood as an example of where, he said, market forces had operated extremely badly. I would remind the House that the choice of putting a plant at Linwood and the continuation of a plant at Linwood was the result of Government intervention and Government subsidy. It was not because market forces were allowed to operate.
My Lords, we live in a world of market economy. We cannot put a ring fence around ourselves. We must compete with the Americans, with the Japanese, with the Germans and the like. Without being able to secure the world market, then the social and economic impact on this country will be very grave. Our overseas customers are not really concerned with the social arguments that we deploy in this House and in the other place. They want the goods; and they want them on time and at a price and of a quality that they demand. If we cannot supply, then they will go elsewhere. But we are succeeding. My noble friend the Leader of the House referred to some of the successes, to some of the achievements of industry and commerce in the last year or two. I believe there is a growing pattern of success stories that will come forward.

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If the noble Lord, Lord Beswick, says that this is defective because we are over-relying on market forces, then he will have to address his remarks to our overseas customers, to the overseas nations, and try to convince them (if he can) that they should pay a higher price to us than they would have to pay elsewhere to support a socialist philosophy which the noble Lord put forward with moderation, but which, in another place and elsewhere, is put forward in different tones; whether that philosophy be the full-blown philosophy that we hear from some parts of his own party or the half-blown or half-deflated policy now beginning to be adopted by the Social Democratic Party, it is the overseas consumers that he must convince to pay more and not we, ourselves, in this country.
9.7 p.m.
Lord Davies of Leek: My Lords, I missed only two speeches. I went out because I was famished and I am not lucky enough to have a dinner waiting for me where I am going to stay tonight. Whatever one may say about this debate, from both sides of the House every bit of it was worth listening to and the reality of the debate needs to be highlighted. Unfortunately, I was hoping to get a policy from the SDP but there was only one speaker and he is not here now. I suppose we shall have a brilliant exposition and a solution of our economic problems ultimately. There are two great stalwarts of the Conservative Party sitting opposite. To use a rugby term, they were in the scrum in the boiler house of the Tory Party. They are the noble Lords, Lord Boyd-Carpenter and Lord Thorneycroft—always worth listening to and always meticulous in trying to destroy the arguments of the Opposition. They did fairly well, but they did not complete it today. Looking at what we are talking about is worth while even at this late hour. I shall not be too long—I am tired, too. Our debate is to call attention to the economic and social effects of over-reliance. We are not denouncing the need for the market place. There is a need. It refers to the over-reliance on market forces in shaping our society and getting a more broadly based policy. What kind of broad based policy?
I took the trouble to look at a Lloyds Bank report to see what they thought of the Prime Minister's policy. The latest article (and I receive these regularly) says that the main economic policies of Mrs. Thatcher's Government—and notice the delicacy of language, my Lords—are (a) to control the money supply and set medium term financial targets; (b) to control--and again we get these acronyms—the PSBR, the public sector borrowing requirement; (c) to control incomes in the public sector—(they are doing well on that)—and to back a very tough stance on pay increases generally. They are doing well on that. It says some strikes have in effect been broken. That is correct. Steel and Civil Service strikes were the clearest examples. That is a reality. The report continues that this has been an important factor besides the record level of unemployment, leading to the reduction in strikes. That is one of the factors.
I saw the situation in 1931 as an underprivileged schoolboy with a scholarship to a university in Wales. Let us remember, my Lords, that men do not come out on strike just as easily as that. The wife and the family
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discuss the issues even in the toughest miner's home. All over the mining areas of Britain even now—and I could mention names—there is a discussion going on: " We do not want to come out on strike ". It must be something vicious that brings them out on strike. In other words, the drop of a hat does not bring the British working man out on strike.
We are talking of the system of society in which we live. There is all this concern about trade unionism in Poland. What about trade unionism at home? What would they do to the trade union movement in this country if we had the Solidarity movement as they had in Poland at various centres? In other words, a little balance is needed. Nobody is justifying what is taking place in Poland, but do not let us use it like the stupid propaganda this week from one side of the world to the other that intelligent nations refused to receive.
Taking Mrs. Thatcher's priorities, the report says that in this event Mrs. Thatcher gave priority to the monetarist strategy. Everybody has tried to explain it. but even the originators never seem to get it across clearly. Interest rates were raised, and in the 1981 Budget indirect taxes were increased and so were direct taxes. So. No. I, it is an elementary fact that the cruelist kind of taxes can often be the indirect ones. We have shifted the burden more and more from the higher income levels to the lower income levels. It can be seen in all kinds of ways.
The bank report said that Budget indirect taxes were thus increased so as to reduce the public sector borrowing requirement. Gross domestic product has thus fallen. So taxes as a percentage of the gross national product have risen. This too is true. Taxation is higher than ever we have known it. Therefore, incentives for the average taxpayer have been reduced. If these incentives are being reduced, it has an effect on the business element. It has an effect on the small businesses. I will come to that point later. The prospects for the coming Budget 1982–83—I do not know what the answer is going to be tonight because we will not get any leaks about the Budget—are that it will not leave much room for reducing taxes in the coming year without a change in the medium-term financial strategy or sharp cuts in public expenditure.
The truth is that we in Britain have lost control of our own lives. Despite the massive advance in technology and within industry, the military industrial complex which we have has more real control over the matter that is now affecting our daily lives. It is strange that we have gone right through this debate without one utterance on military expenditure—and, of course, nobody gets to the truth—and I can quote that because I was chairman of an estimates sub-committee examining military expenditure in the Middle East, Africa and the Far East in 1964–65. I think I can quote the date of the report. We have never been able to fathom out the relationship of military expenditure to our own budget relationships. So this is the cross on which we are impaled. The Government promise future prosperity. Like a parcel today with wrappings, everybody says, " We are breaking through "; then you take another piece of paper off this wonderful parcel; you go deeper and deeper and you never get to the present or that light—I have never known of a light being in a tunnel, at the

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end of a parcel, because that is a mixed metaphor—but you never get to whatever is in that parcel; you move onto something else.
Let us take the eulogy of the Common Market. We were told—there was a marvellous advertisement in the New Statesman and everybody believed it—that if we joined the Common Market it would be worth £7 a week more in wages. That advertisement was in the New Statesman some years ago, and you can look it up; and the propaganda that was given was one that built our prosperity completely on the activities of the Market. We were told that if we moved into the Common Market there would be a great area of investment. We are finding it has not been so easy for agriculture or for us to get into those markets. Today, when we talk of leaving things to the market, we ask about Japan. Nearly every other house in Britain is either showing a television set or a little car outside by the garden gate or in the garage, or equipment of some sort that comes from Japan. What do we do about it? Have we the right, or are you going to say under pure Conservatism, " We will not interfere with Japanese goods coming in here "? Once you start asking these questions we are saying you must do something about it, unless you wish British industry to be completely killed. Are we aiming for a de-industrialised Britain? Are we aiming for what a pamphlet in 1963 said was the aim of the Common Market—to get the industrial area for the whole of Britain?
Now we can no longer say that we are alone. This Government, whether it becomes a Labour Government, an SDP Government or a Conservative Government, can no longer make decisions without having to face—and here I do not know the answer—the complex problems of the inter-relationship of man's exchange of goods. I do not know if it will be accepted—it is over-expressing it a bit, but it is now almost an axiom—but the system of society that we call capitalism can give full employment only when you are at war or preparing for war. The noble Lord, Lord Marsh, in his analysis admitted that we in this noble House came forward—one has only to go down to the Royal Gallery, where every day they turn over a page of the names of Members of this House who laid down their lives to build a new Britain, to see that they were as honest and sincere in that desire as the humblest squaddie or seaman. This noble House, from the days of Waterloo or before, always thought of building a British system of society, giving freedom and giving freedom from contempt. That is the most important of all the four freedoms—the fifth—that I once put in a pamphlet—freedom from contempt. Today Britain is looked upon by some people outside in a form of contempt. Why are we in this position? I have been speaking for eleven minutes and I will take two more because it has been a tiring day. I should like to go on for another ten; but no.
I believe we have forgotten very much of the importance of our history. You see the magic and the jargon that is used today, the worship of the over-reliance on the market forces to bring us out of a slump. We are told that we can do this and we are told in language that bewilders many of our people. But we are not in control. Our Government honestly
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thinks it is going to do something about inflation. If you opened the Financial Times this morning you would see a heading that Reagan is increasing rates of interest—rates of interest are about 16½ per cent. In other words, we are no longer in control of our destiny. I therefore believe that we should be seeking alternatives to monetarism. I have heard many people say: " International conferences are not of much value ". Whether they are or not, we want a concerted move in Britain to try to solve our own problems and, strangely enough, the first place where I would begin is seeing that British agriculture and British energy are getting the attention that they deserve.
We can thank God for British oil because, without that, this country would today be in the worst economic position that it has been in since the time of the Black Death. It is only North Sea oil that is enabling this Government, and will enable any other Government, to face the problems. Behind the shelter of that, we have enough support, and enough concrete backing, to work out a policy of our own, which may not be so much controlled by the outside forces of the industrial and military complexes of either America or Europe.
9.21 p.m.
Lord Bruce of Donington: My Lords, this has been a long and very absorbing debate, and one that has had its occasional diversion. No debate in which the noble Lord, Lord Boyd-Carpenter, quoted my late right honourable friend Aneurin Bevan in support of his argument could be without interest. Indeed, no debate which contained an account of a former Labour supporter, the noble Lord, Lord Marsh, and the story of his rise to the room at the top, could he without interest either.
There was a disposition in the earlier part of the debate to say that my noble friend Lord Bewsick was wrong in having called attention to the social effects of over-reliance on market forces. The suggestion was made by the noble Lord, Lord Thorneycroft, that, of course, Governments had intervened most decisively in the economy. But that was not my noble friend's point. We know perfectly well that the present Government have intervened, and intervened most decisively, in the economy. Our complaint is not that, nor is it the complaint of my noble friend. Our complaint is that, having created all the havoc that they have done by their own actions, they now expect market forces to take over and secure the recovery. That is the gravamen of our charge.
I well recall the earlier days, and a series of amiable exchanges with the noble Lord, Lord Cockfield, who regularly gives the same account of the Government's policies—of how, in the early stages, the Government relied on reducing the rates of taxation, leaving more money to fructify in the pocket, and of how that, itself, would revivify the economy and provide more incentives. That was one intervention which the Government made in the economy. But, apparently, that was not enough and it had to be in conjunction with the control of the money supply.
Here the noble Lord, Lord Cockfield, and his Treasury colleagues found themselves in some difficulty. First, they did not know what it was and could not

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define it, and they are still unable to define it. But having got a fair approximation of what they thought it was, they proceeded to use it, or tried to use it, and discovered that they could not find the instrument to control the thing which they did not know very much about. So that finished that one. The noble Lord proceeded also to enunciate the virtues of steadily reducing the public sector borrowing requirement—of course, until they found out that that was irrelevant, too, until they found out that the effects of so doing were almost precisely the opposite of the effects that they had in mind. So it is quite true to say that the Government have intervened in the economy.
As I have said, our complaint is that, having intervened, they are now leaving the market forces to take over. Having mutilated the lip they expect a sort of natural healing process to come in after them and repair the damage. The noble Lord, Lord Thorneycroft, put it very well in the course of the debate on 12th November 1981 when he said:
" The idea that the national Government of one small country can really have a decisive effect upon what happens to the economy over the next two years is a proposition which does not really hear very close examination ".—[Official Report: col. 3600.]
The noble Lord is there trying to enunciate as an excuse the fact that Governments cannot do very much, anyway. And implicit in that argument, the damage having been done by that time, is that market forces must take over. We on our side know that there has been Government intervention on a massive scale and that the whole thrust of the actions of the Government has been directed to one end only—to free capital of all constraint so that capital may flow freely wherever it goes, no matter if it takes only five seconds to do it. In order that capital can be free, for reasons that I shall show, it has been necessary at the same time (and, indeed, has been part of the process) to create that degree of unemployment which is going to break wage resistance and is deemed to be effective in lowering labour unit costs. This is the main thrust of the whole of the Government's policy.
In the speech which she made today from the Government Front Bench the noble Baroness went a little further than she went on the previous occasion when she addressed the House on the economy. She said then that unemployment was in fact unperceived overmanning. She has gone a little further today and has said that unemployment is the price we are paying for past uncompetitiveness and past overmanning. Since the term " competitiveness " is now looming so large in the Government's policy pronunciamentos, it is perhaps necessary to deal with this question head on: what the Government themselves have done to make British industry more competitive; what capital, freed of its constraints, has done to make British industry more competitive.
Those of your Lordships who have had experience in industry and commerce will know that the unit cost of an item is not quite the same as its labour cost. The cost of any article that is manufactured comprises the cost of its raw materials, the labour cost applied to it, the energy cost that may or may not be used in its production, and a factory on-cost which comprises in the main the rent and the various services in the building. But, of course, including the machine on-
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cost means that proportion of the capital cost of the machine which on a time expiry basis, and on the basis of its replacement, is due to enter into the prime cost of the article itself.
It follows, therefore, that if for any reason machinery becomes obsolete—and much of British machinery has become obsolete—the proportion of the labour cost related to the factory on-cost goes up. It also follows that notwithstanding the cost of an item including all its on-costs, raw materials and everything else—such as its financial charges and administrative costs—the price is ultimately determined, after having added on the profit, by the amount which it is supposed to be able to get in the market. It is presupposed very often that the consumer has the choice; that the consumer choice determines the price. This in the main over British industry is quite untrue. The prices of most items are in fact based on a series of planned assumptions, normally made one or two years before the product arrived on the market at all. It presupposes certain labour costs and presupposes other costs which enter into the final costs of production. But it is planned, and it is planned at a price that is determined in advance.
Then the problem becomes to persuade the consumer to pay that price. The consumer does not choose the price. The consumer is not consulted about the price. The price is determined by the producer. Over the vast majority of large-scale British industry, consumer choice does not enter into it at all. In fact, in 1980 £2,252 million had to be spent on advertising in one form or another in order to persuade people to exercise the demand which it was alleged they would have to make freely. It is, of course, nothing of the kind. We are very largely in an economy where, although on the periphery consumer choice does operate to determine prices, the prices of most commodities in the United Kingdom, especially consumer durables which are produced by large enterprises are predetermined.
As the European Commission reports have shown and as the Maldague Report showed in 1975, it is very often the larger scale enterprises that have contributed to inflation by their advance and planned high expectations, which the population were then persuaded by mass advertising media to buy at a higher than necessary price. These are the mechanics of it and exactly how it works.
Now what has happened, owing to the removal of exchange controls of the Government, but above all to their deliberate raising of the rates of interest, which is not the mechanistic affair that the noble Lord, Lord Cockfield, would now have us believe it is? It is has all been " automatic " from the noble Lord, Lord Cockfield, over the past two or three weeks but my noble friend Lord Beswick was kind enough to remind us of the time when it was regarded as an instrument. The raising of the rates of interest in the latter part of 1979 sent rates of exchange right up. I have the table here of the rates of interest and the movements compared with the purchasing power parities of the various countries concerned. What it did immediately was to make it more difficult for our exporters to export. What it did at the same time was to put the manufacturers abroad into a position, due to this, in effect, exchange subsidy, where they could

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undercut practically every British manufacturer in the same market. That is exactly what happened. The move to increased exchange rates to the level that it went acted as a subsidy for imports from most other countries, particularly all other European countries.
That was aided further, I would remind the noble Lord, Lord Boardman, by the direct intervention of the Government into the pricing policies of the nationalised industries, by increasing the electricity and gas prices in this country on the basis that the prices were not economic. What happened after that is a matter of history. The policy of high interest rates had the effect, first of all, of acting as an import subsidy for manufacturers abroad and making our exports more difficult; in addition, it was an additional factor of cost in the domestic market here suffered by British construction engineers, British engineers, British farmers even (which surprised one), British manufacturers, British industry in all grades. On top of that they had the higher interest charges, which they still have. The Government now complain that British industry is not competitive. They are the ones who have deliberately made it less competitive by their own actions.
Once the process starts it of course snowballs, because the import penetration grows, and anybody in the textile industry knows this perfectly well. Imports from Taiwan and Hong Kong, financed by British capital freed from capital restraints, have almost massacred the textile industry in this country. What happens then? When unemployment grows it has a multiplying factor. For every operative put out of work you can reckon that will be two and a half unemployed. Demand falls for domestic products, whatever the total level of consumer demand may be. This means that British manufacturers now have a fall-off in demand. What happens then is this. They have smaller batches of production; smaller batches of production mean higher unit costs, and so they become less competitive again. And so the whole process accumulates. On top of that there is the fact that in regard to the machinery required to be used in most of the manufacturing industries, but not all, in this country, you have the element of non-competitiveness.
The noble Lord, Lord Boyd-Carpenter, drew my attention to a speech made by my late right honourable friend Aneurin Bevan, when he said:
" How can we persuade the ordinary man and woman that it is worth while making sacrifice in their immediate standards or foregoing substantial rising standards to extend fixed capital equipment throughout this country? This is the problem, and it has not been solved yet ".
Then he said:
" We failed to solve it. We frankly admit that. In the years immediately after the war we made very great efforts to build up our fixed capital equipment and sacrificed our parliamentary majority ".
That is precisely what happened. Under the Admini-
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stration of 1945–1950 there was a very high level of investment indeed because the Government of that day, which I had the honour to support, deliberately held down the consumption of consumer goods in this country in order to pursue capital investment to build up our post-war industries. Ever since that time we have, in fact, been doing what the noble Lord, Lord Boyd-Carpenter, pointed out: we have been living off the fat and we have been eating the seedcorn.
As I have said many times before in your Lordships' House—and as the noble Lord, Lord Cockfield, knows very well indeed—the levels of investment in the United Kingdom as compared with those in France and Germany have been absolutely shocking. They are 30 per cent. below what they were in France; 40 per cent. below those in Germany and roughly 60 per cent. below the investment levels in Japan. Therein lies the lack of competitiveness. Precisely because there has been a lack of capital investment in this country, so there has been a greater reliance by manufacturers in this country on the use of labour, and the use of as cheap labour as possible, in order to compensate for the lack of investment. If one looks at the comparative tables that have been published by the European Commission, one finds that, measured in terms of real purchasing power, this country's wage levels are, in fact, much lower than those of our continental colleagues.
That then is the position—and that is the position into which we have been driven not accidentally, but quite deliberately, in order to restore the power of capital; and, owing very largely to the forbearance of the working people of this country, they have been able to maintain themselves at a standard of life to which their own individual qualities and work in the community as a whole do not necessarily entitle them. That then is the battle of the party opposite. That is the line that they propose now to continue. They will not intervene any more; it is not necessary. They think that the damage has already been done and is sufficient. Indeed, the noble Lord, Lord Alport, gave I think a little ominous warning to his colleagues today as to what the likely consequences will be.
My noble friend Lord Beswick should, in my opinion, stand astounded at his own moderation. He made what is generally thought to be in the House a speech which was friendly in its form; which called for the utmost co-operation between all sections of the community; and he made what is called a statesmanlike speech. Progressively as one gathered the response to the very moderate statements that he made, progressively the more angry I myself became because, of course, the party opposite has no use for moderation save in its words. It has no use for consensus; it requires only domination. One thing is certain: before very many months are out it will dearly rue the fact that it has given the British economy almost a mortal blow. That is its record, and I hope that in due course it will be proud of it.
9.45 p.m.
Lord Cockfield: My Lords, the noble Lord, Lord Beswick, moved the Motion standing in his name on the Order Paper in a spirit of moderation and restraint. He covered a very broad canvas. Most of what he said would be echoed in many parts of your Lordships' House. But perhaps the most striking point about his speech was the sense of nostalgia which pervaded it. He was not looking back in anger but in regret for times long since past and for policies long since outgrown. Even his new economic deal took its name from Franklin D. Roosevelt, not that that is any criticism of Franklin D. Roosevelt, or, indeed, of the noble Lord, Lord Beswick.
But one really wonders what relevance policies fashioned for a bygone age have to the very different problems of today. The achilles heel in the noble Lord's speech and in the Motion he moved lay in his reference to " over-reliance on market forces ". I suspect that when the noble Lord came to draft his Motion he found that it could well be read as supporting the Government rather than criticising it, and that he hastily added these words and this reference to the market place to protect himself from his own Back-Benchers.
My noble friend Lord Thorneycroft, in a powerful and entertaining speech—and there is no more effective speech than one which is entertaining—demonstrated with complete conviction that what we suffer from is no t an over-reliance on market forces; that our troubles, if anything, are due to market forces being given too little play. The same point was made by my noble friend Lord Boyd-Carpenter in a speech of great penetration and insight. I was particularly struck by the phrase he used, that market forces meant producing the goods that the people want to buy at the price they are prepared to pay.
The noble Lord, Lord Bruce of Donington, endeavoured very gallantly to rescue his noble friend Lord Beswick by reinterpreting his phrase, which he claimed not to mean what it plainly said on the face of the document; but what he really meant was that the Government had intervened in market forces and it was only now that they had changed their minds and begun to rely upon market forces. Although I greatly admire the noble Lord's ingenuity and courage, and indeed his gallantry in coming to the rescue of his noble friend in this way, I hardly felt that he made a convincing case.
What, in fact, we as a Government have done is simply to roll back, in a very modest way, the frontiers of state power which, in our view and in the view of most people in this country, have grown excessively; and to curb the exercise of power by organisations with monopoly power, whether they are labour unions or whether they are monopoly industries. Our objective is to increase the freedom of the individual, whether it is his freedom as an individual, his freedom at work, his freedom to carry on his own trade or profession. We are not engineering a revolution; we are simply restoring a better balance of power within the various sectors and interests in our community.
I do not quite know whether we should treat the Liberals and the Social Democrats as one party or two. I suspect that they do not know either.
Lord Boyd-Carpenter: My Lords, none of them is here.
Lord Cockfield: My Lords, in that event nobody can enlighten either myself or the noble Lord, Lord Davies of Leek, who also felt that he had waited in vain to hear what their policy was. The noble Lord, Lord Rochester—and he was good enough to let me know that he would be unable to stay—in a typically thoughtful speech analysed our problems in some depth. Much of what he said—for example, the need to control inflation; the need to improve productivity; the need to provide new and constructive job opportunities—we would all agree with. But when he came to remedies, to policies to secure these aims, all he could offer were the policies that had been tried before, but with no great success. The best he could do was to tell us that the Alliance had set up a commission to study the problem. Unfortunately, in Government we have to solve problems, not merely contemplate them.
His ally—if I may be forgiven for using such a term—the noble Lord, Lord Taylor of Gryfe, was similarly very long on analysis but very short on solutions. He left me with a very clear impression that he was against sin and in favour of virtue. But where that led him, I was none too clear. In the Thousand and One Nights Abanazer went through the streets of Baghdad crying," New lamps for old ". The best that the Liberal/SDP alliance can offer us is, " Old lamps for new "!
Let me deal briefly with the question of the finance of the nationalised industries. This was raised by the noble Lord, Lord Taylor of Gryfe, and it has been touched upon by other noble Lords. The money borrowed by the nationalised industries carries a specific or implicit Government guarantee. Most of the nationalised industries—I am not saying all of them, but most of them—quite frankly could not borrow a brass farthing (let alone the much maligned halfpenny that the noble Lord, Lord Davies of Leek, was talking about on the Currency Bill) on their own credit. They are in the public sector. They enjoy the benefits of being in the public sector, including the benefit of being able to borrow money on public sector terms, and no juggling with the statistics and no alternative definition will change the reality of this situation. Unfortunately—and one has to say this—not all nationalised industry investment has been profitable. What we need in this country is profitable investment which will pay its way.
Provision was made this year for the nationalised industries to spend 15 per cent. more in real terms on capital investment. In real terms again, this will be the highest figure since 1976–77. We are anxious that the nationalised industries should improve their efficiency. I am sure that, in general, they are equally anxious to do so. We believe that there are activities which could be better carried on in the private sector than in the public sector. But this does not mean that we are prejudiced against the nationalised industries or that we have any interest in denigrating their achievements. Our interest is in encouraging them to do better. As my noble friend Lord Boardman has said, there is a real problem in trying to replicate in the public sector the forces of competition and the disciplines which apply in the private sector.

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The prosperity of our people depends upon our being able to sell our products, the goods we manufacture and the services we provide, at home and abroad. This quite simply is what our problem is. If one looks back over the last 20 years, then our share of exports in international trade has been halved, and over the same period imports have increased at double the rate of growth of our gross domestic product. The answer must therefore lie both in increasing our productivity in real terms and in ensuring that we get better value for money.
Productivity in real terms in this country is only one-half of what it is in the United States and Germany, three-quarters of what it is in France and Japan. In money terms, unit labour costs have doubled in this country since 1975; in Canada they have increased by one-half; in the United States by one-third; in Western Germany by one-sixth; and in Japan not at all. What lies within the power of Government to do is limited. The answer to the problems of productivity and the control of costs must be found primarily by individual managements and individual workers. There is a great fund of experience and expertise in this country and a great fund of enterprise. We should not in any way deprecate the very great abilities that our people have, both on the management and workers' side.
The Government's function is essentially one of providing the stage on which the play is enacted. That is not to deny the part of Government; it is both to put it in perspective and to stress that there is no easy way out by the Government waving a magic wand. It really passes all belief that, at this stage in our affairs, serious politicians should think that we could solve our problems by massive injections of public money. Indeed, all that separates many of our critics is the size of their ambitions; one says £5 billion, another £10 billion, another £20 billion. If all that stood between us and prosperity was a few noughts, we should soon solve our problems. It has been tried repeatedly and failed.
It is no good, I say with respect, the noble Lord, Lord Jacques, saying that the risks in reflation are negligible. It has been tried repeatedly and failed. It has bought not increased output but simply increased inflation. That is demonstrated conclusively by the fact that in the 10 years between 1970 and 1980, money GDP increased by 345 per cent.—that is, it multiplied by nearly four and a half times—but all it succeeded in doing was purchasing a 17 per cent. increase in output; money went up twice as fast as output.
The first thing we need to do is to increase our productivity. That means changes in working practices and the reduction or elimination of excess manning. The hardship that imposes on the individual who loses his job is obvious but, frankly, it is the only way we can survive. It is better in the end that some should go than that the enterprise as a whole should collapse and everyone lose their job. The major improvements which are now taking place in productivity are beginning to show in the figures. In the first nine months of last year, productivity increased by 10 per cent. It would not be reasonable to expect that we could maintain such a rate of increase in productivity, but it is essential that we should maintain the momentum towards higher productivity.
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The second thing we must do is to improve our productivity measured in money terms, to enable us to give better value for money both to our own people at home and to our customers overseas. We must reduce our costs, and if we cannot do that, we must at least reduce the extent to which our costs increase. That is why it is so important to moderate pay settlements. Not far short of 70 per cent. of our total costs are ultimately labour costs. Those costs which appear as material costs, if analysed, ultimately break down mainly to labour costs as well. The cost of coal is essentially a labour cost, although when the coal goes into the steel industry it appears as a material cost. The cost of steel itself is a labour cost, although when that goes into engineering it appears as a material cost.
The way that our labour costs have increased relative to those of our competitors lies at the heart of so many of our problems. Here, too, progress is being made. After a run of years with double digit increases in unit labour costs, in the year to October unit labour costs increased by only 2 per cent. That is a considerable achievement, and we must continue to make progress on this front.
The Government's fiscal and monetary policy is designed to help along this process of improvement. We recognise the difficulties. There is no question of our abandoning these policies, as the noble Lord, Lord Bruce of Donington, endeavoured to suggest. But it is only if we maintain a firm fiscal and monetary policy, only if we restrain the level of our own demands by way of public expenditure and borrowing, that we create the right environment in which excessive wage increases are discouraged, and in which if they are conceded, it is difficult for them to be passed through in price increases. Curbing inflation is an essential and inescapable element in any policy which sets out to improve our competitive position in the world. This was recognised by a number of noble Lords who spoke, including my noble friend Lord Thorneycroft, and the noble Lords, Lord Rochester and Lord Robbins.
I should like to make one or two comments on the exchange rate, to which the noble Lord, Lord Bruce, referred. He claimed that the appreciation in the pound acted as a subsidy for imports and as a penalty on exports. In those circumstances it is perhaps rather remarkable that we have achieved a very large balance of payments surplus exceeding £3 billion in 1980, and another large balance of payments surplus in 1981. In fact, despite all the difficulties, our exporters have done remarkably well, and that is something for which we ought to pay tribute to them.
It used to be thought that devaluing the currency would provide a solution, as indeed the noble Lord, Lord Bruce, seemed to suggest. But if we go back and look at what happened in 1976, we see that the Labour Government then succeeded in getting the pound down to 1·56 dollars, and but for the IMF, it would have disappeared from view altogether. Did that solve any of our problems? All it did in fact was to increase our inflation.
We see the same effects today. The exceptionally high level of the pound last year created great difficulties for our exporters; that we recognise. But the fall in the pound which has occurred since then is primarily

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responsible for the recent—and temporary—rise in the rate of inflation.
We realise the very heavy burden imposed by the present high rates of interest. I am at one with the noble Lord, Lord Beswick, in deploring both the present level of interest rates and the burden that that level places on our national budget. But the primary reason why we pay so much interest is that we have borrowed so much over the years. That is why it always surprises me that we do not have the noble Lord's wholehearted support in our efforts to restrain the amount of the public sector borrowing requirement and thereby to reduce the extent by which the burden of interest rises.
Perhaps I might make this one comment in reply to the right reverend Prelate the Bishop of Lincoln, who quite rightly expressed great concern about those in our society who suffer from particular disadvantage. Total Government expenditure as a proportion of the national income has increased quite sharply under this Government. It was 41½ per cent. in 1978–79. This last year it had risen to 45 per cent. of our total national income; and this is certainly not the action of a Government who do not care. What in fact we have had to do is to struggle against the ever-rising cost of programmes which were taken on, very often many years ago, without adequate regard to their long-term costs.
I should like, my Lords, to make a few comments on the question of consensus, because this featured in the speech of the noble Lord, Lord Beswick, and there were references to it in the debate by a number of noble Lords. The term " consensus " has become a fashionable term lately. It has been taken up by all sorts of people. Like fashions in clothes, it comes and goes and it comes back again. Of course, what really matters is not so much the clothes but who is wearing the clothes, as indeed Red Riding Hood discovered when she peered closely to see who was wearing grandmamma's dress.
Let me illustrate my point by reference to the social contract which was entered into between the Labour Party and the trade union movement in 1974. That, no doubt, is what noble Lords opposite mean by " consensus ". I have myself on a number of occasions spoken critically of the social contract, but on this occasion I will not repeat what I said; I will merely quote what was said by Mr. Joel Barnett, a member of the Labour Party Cabinet at the time. What he said was this:
" The only give and take in the contract was that the Government gave and the unions took. The disastrous social contract "—
that is his term, not mine—
" may have helped to secure our election victory, but it did nothing to prevent, and some would argue that it ensured, the 27 per cent. growth in earnings that followed ".
That is the end of the quotation, and all I would add is that it also ensured the 27 per cent. inflation as well.
It was in regard to this type of approach to the question of consensus that my right honourable friend the Prime Minister was talking in the course of what she said in Melbourne, to which the noble Lord,
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Lord Beswick, referred. It was in relation to this type of consensus, which leads to the sort of results to which I have referred. Of course there is an obligation on Government—and we recognise this obligation—to explain their policies fully, carefully and frankly, and to carry the mass of the people with them. This is what democracy is, and this is how democracy works. There is great value in a forum such as Neddy. There is great value in a debate of the kind which has taken place in your Lordships' House today.
My Lords, I have left unemployment until last simply because it is the most important issue of all. What matters in the end is providing employment. This is the only way that unemployment can be reduced on a lasting basis. There will always be a place in times of difficulty for special employment measures. We are spending a great deal more on such measures, more this year than last year, and more next year than this year. But they do not solve the problem. The problem can only be solved by job creation; and permanent jobs can only be created by producing goods and services at competitive prices. You cannot create permanent jobs by being uncompetitive.
This is why we place such emphasis on the need to improve productivity, on the need to keep costs down; why we have removed controls to lighten the burden on industry; why we have taken measures to improve the working of the labour market and why we have introduced a whole range of tax incentives to help new firms and, particularly, the small firms: the Venture Capital Scheme, the Business Start-Up Scheme, the Loan Guarantee Scheme, and why it is so essential to create a climate in this country in which enterprise is recognised, encouraged and rewarded.
I have said on many occasions that we cannot expect in future over a sustained period the kind of growth that we saw in the 1950s and 1960s. No one will, neither in this country or in the world at large. But do not let us underestimate how much can be done with a modest rate of growth if we conduct our affairs reasonably and responsibly. What we cannot do is to have everything all at once. What we must not do is to consume the fruit before we have produced it. Over the last three years, we have had to face a world recession with no parallel since the 1930s. This occurred just at the time when we were taking the first steps to correct the long accumulated failures and shortcomings of the British economy.
There are, and have been, many people who would say that we ought to have waited for better times. But unless we were prepared to act, these better times would never have come. As it is, we are now beginning to emerge from the recession, slowly but certainly. Output is up and has been rising steadily since summer; productivity has increased sharply; new construction orders are up; engineering orders have increased, export orders and engineering show a very healthy increase. Exports generally are well up; non-oil exports, for example, show an increase of 3½ per cent. in volume terms on 1980. The cyclical indicators continue to confirm that recovery is under way. The Industry Act forecast published in December indicates that we can expect this modest but welcome recovery to continue. It is towards sustaining and encouraging that recovery that the Government policies are directed,

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and it is to that end that we must all of us bend our efforts.
10.13 p.m.
Lord Beswick: My Lords, this has been a remarkable debate if only because of the number of noble Lords who thought it worth while making a contribution. I have heard every speech, I think, but I shall look at Hansard with great interest tomorrow and I have no doubt I shall have a lot to learn. I have made a note to send a copy of Hansand tomorrow to the right honourable gentleman, Mr. Pym, because I am certain that he is not quite aware of just how well the Government are doing. I think that he really ought to read the speech to which we have just listened.
There are a number of points in the speech of the noble Lord, Lord Cockfield, that I should have liked to refer to. For example, I should have liked to ask him how it comes about that labour costs have gone up so high, as he told us, but, at the same time, our exports have maintained so well, as he also told us. I should have liked to ask him how he reconciles the statement that it was not his intention to denigrate public industries when he also said that some of them could not borrow a brass farthing. The statement which I should like most to take up with him is the statement that the Government policy is designed to restore freedom to the individual. I am not sure that that statement ought not to go together with the article from the Sunday Telegraph which was quoted by the noble Lord, Lord Alport. I must resist those temptations. At this hour I can do no better than thank noble Lords for taking part in this debate, thanking particularly those who have stayed until the end. My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

New Towns Bill
Brought from the Commons; read a first time and to be printed.
  MR. STEVEN RAYMOND
  MR. STEVEN RAYMOND
  HEATHROW AIRPORT: SECURITY INTERROGATION
  HEATHROW AIRPORT: SECURITY INTERROGATION
  CONTROL OF POLLUTION ACT 1974: IMPLEMENTATION
  CONTROL OF POLLUTION ACT 1974: IMPLEMENTATION
  ENDANGERED SPECIES: 1979 REPORT ON CONVENTION
  ENDANGERED SPECIES: 1979 REPORT ON CONVENTION
  MEANS-TESTED BENEFITS: RECIPIENTS
  MEANS-TESTED BENEFITS: RECIPIENTS