Sitting of 16 February 1982

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  EDUCATION AND SCIENCE

    University Staff (Redundancy Compensation)
    Mr. Cryerasked the Secretary of State for Education and Science what representations he has received regarding redundancies of academic and technical staff in universities since his answer of 25 January, Official Report, c. 275; and if he will make a statement.
    The Secretary of State for Education and Science (Sir Keith Joseph): The redundancy compensation for university academic staff which I announced on 25 January has been generally welcomed.
    Mr. Cryer: Is the Secretary of State aware that there is the wider issue that Government cuts generally, and particularly at Bradford university, threaten universities as institutions and academically? Is he further aware that the proposed redundancies in Bradford will increase unemployment in an area that already has a high level of unemployment? Does he not realise that his vaunted claim to belong to a party that increases freedom of choice is the reverse of the truth, because, by cutting back on universities such as Bradford——
    Mr. Speaker: Order. The hon. Gentleman is now making a speech.
    Mr. Cryer: I am just finishing, Mr. Speaker. The right hon. Gentleman is making——
    Mr. Speaker: Order. The hon. Gentleman is continuing far too long for aquestion.
    Sir Keith Joseph: It is open to all universities to consult the University Grants Committee on the effect of its proposals.
    Mr. Geoffrey Robinson: Will the Secretary of State take more seriously the effects of his cuts on universities, such as Aston in the West Midlands? Will he be more forthcoming in his support for the science parks at Aston and Warwick universities than he was yesterday at the launch of the Warwick one? Is there not some way of giving moral and financial Government support to these ventures?
    Sir Keith Joseph: The Government already provide enormous amounts of taxpayers' money to the universities. It does not seem sensible or possible for the Government to protect all sectors of public spending when there is an urgent need to abate the rise in public spending.
    Mr. Nicholas Winterton: Is my right hon. Friend aware that although the Government are seeking to advance technology, some of the cuts in higher education are having an adverse effect on the universities of Bradford, Leeds and Manchester in the departments which concentrate on textiles? This could have a detrimental effect on the training of high technology experts for an industry which needs these skills.
    Sir Keith Joseph: As my hon. Friend will know, Ministers do not presume to allocate money between institutions; they leave that to the UGC, to which individual institutions should put forward their views.
    Mr. Whitehead: Is the Secretary of State proud of the fact that this week in The Times Higher Education Supplement he and his colleagues have been described as "The new yahoos, " presiding over a system in which £200 million is being paid out to sack university teachers, whom the universities do not wish to get rid of, for whom there is a demand and whose product is highly esteemed?
    Sir Keith Joseph: Name calling does not solve the problem of reducing inflation and unemployment. In the Government's view, that depends on a proper balance between public spending and private investment.
    Mr. Cryer: On a point of order, Mr. Speaker. In view of the Secretary of State's inadequate and evasive reply, I give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

    Maintained Voluntary Schools
    Mr. Montgomeryasked the Secretary of State for Education and Science whether he has any plans to alter the status of the maintained voluntary schools or the Church's role in many of these schools; and if he will make a statement.
    The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): My right hon. Friend has no plans to alter the status of maintained voluntary schools or the Church's role in them. The Government fully support the very valuable part that voluntary schools play in our education system. They provide what many parents want for their children—education in a maintained school, but in an atmosphere that reflects their faith.
    Mr. Montgomery: Does my hon. Friend agree that that answer is in marked contrast to the anti-Church and anti-voluntary school policies being pursued by the Labour Party?
    Dr. Boyson: I take my hon. Friend's point—[HON. MEMBERS: "Rubbish."] It is not rubbish. The first draft of the Labour Party's election campaign for the Greater London Council last year contained the following:
    "That no child should be educationally segregated by virtue of his or her sex, religious, ethnic or socio-economic status".
    If children are not to be separated by religion, there will be no voluntary schools. That was cut out later, because of a great outcry, but it was there at the beginning.
    Mr. Hardy: Has there ever been a two-year period when so many voluntary schools have been closed?
    Dr. Boyson: I do not know of any two-year period when there has been such a fall in the birth rate in the years before. It was no desire of this Government that there

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    should have been a fall in the birth rate five years ago. It must have reflected the policies of the Labour Government of that time.
    Sir William van Straubenzee: I fully endorse my hon. Friend's confidence in such schools, but should not the long-term objective be to work towards nondenominational schools, perhaps with some restructuring of the arrangements between the Churches and the State?
    Dr. Boyson: That is an interesting point, and it is not the first time that my hon. Friend has raised it. Obviously, the Government support denominational schools where parents demand them. Similarly, we consider sympathetically any requests for joint-denominational schools.
    Mr. Kinnock: Does the Minister recognise and register the fact that there is no anti-Church or anti-voluntary school sentiment in the Labour Party? On the contrary, the Opposition wish to see an improvement in the standards of education and provision for the liberty of every individual in Britain.
    Dr. Boyson: I am sure that all hon. Members will welcome that statement. At the same time, there is a suspicion that bubbling at the bottom of the Labour Party is an anti-voluntary school complex. The Times printed a letter last week from a Councillor Hilary Benn, who I believe is a member of the Labour Party, stating:
    "The case against any extension of voluntary-aided denominational education is overwhelming."

    Student Union Financing
    Mr. Nicholas Wintertonasked the Secretary of State for Education and Science whether, consequential upon his answer of 1 December, Official Report, c. 130, he has reached a decision on the difficulties which arise from the present system of student union financing; and if he will make a statement.
    Mr. Eggarasked the Secretary of State for Education and Science whether, consequential upon his answer of 1 December, Official Report, c. 130, he has any further statement to make on the present system of student union financing.
    The Under-Secretary of State for Education and Science (Mr. William Waldegrave): A change in the method by which student unions are financed is not one of the issues we are currently considering. That would be premature. The current arrangements came into effect only in the current academic year.
    Mr. Winterton: Does my hon. Friend agree that compulsory membership of student unions is alien to Conservative philosophy? Does not the case of Paul Soden epitomise the current unsatisfactory position? Will he give sympathetic consideration to the research being carried out by the Federation of Conservative Students into making membership of student unions voluntary?
    Mr. Waldegrave: My hon. Friend and I have been corresponding on this matter. Since subscriptions to student unions were abolished in favour of funding from the recurrent grants for institutions, the problem does not arise in its traditional sense. However, I shall continue to consider the matter.
    Mr. Ward: Does my hon. Friend realise that his reply will be met with less than satisfaction on the Government
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    Benches? Does he agree that we should once more consider giving the same freedom to those who either wish or do not wish to join a student union as we are proposing for any other union in Britain? Does he accept that much of the trouble caused by student unions arises because they are not answerable to those who provide their funds?
    Mr. Waldegrave: I hope that my hon. Friend will agree that student unions are not comparable to industrial unions. They provide common facilities for students and, therefore, are correctly financed out of the recurrent grants for institutions. The problem does not arise in the way that my hon. Friend believes.
    Mr. Eggar rose——
    Mr. Speaker: Order. I must tell the hon. Member for Enfield, North (Mr. Eggar), who has just arrived, and whose question is being answered, that any supplementary question should relate to the answer—which he did not hear.
    Mr. Eggar: I understand, Mr. Speaker, and will not ask a supplementary question.
    Mr. Speaker: I am glad that the hon. Gentleman is courteous enough to acknowledge my point. I shall remember that.

    Careers Advice
    Mr. Marlowasked the Secretary of State for Education and Science if he intends to introduce any new proposals to improve the provision of careers advice in schools; and whether he proposes to make any changes in the training of teachers designated to have responsibility for careers advice.
    Dr. Boyson: My Department has already drawn attention to the need to improve the careers advice given in schools, and will continue to do so. There is a variety of in-service training courses to help teachers in this area of their work, and we have no immediate plans for changes in these arrangements.
    Mr. Marlow: Does my hon. Friend agree that with the present difficult position for youngsters contemplating leaving school, careers advice is very important, and that the Government should deploy all the resources and skills at their disposal to ensure that the best service is provided?
    Dr. Boyson: I agree with my hon. Friend. During the past three years the number of teachers on one-year full-time or equivalent part-time courses in careers training has doubled. It is important that all teachers are aware of the position outside schools. They will give better advice if they have experience of life in industry.
    Mr. Flannery: Does the Minister agree that although we want better careers advice, with more teachers undertaking in-service training—which requires additional financial provision—at the end of the day the Conservative Government have created a situation in which almost all youngsters are thrown on the scrap heap?
    Dr. Boyson: I am sure that no hon. Member wants large-scale juvenile unemployment. Unemployment in Britain began to rise under the Labour Government, and it has also risen throughout Western Europe. Until Britain manufactures goods at the right price and quality that people want to buy, there will always be unemployment.
    Mr. Haselhurst: Would not the task of giving careers guidance to youngsters at school, and guiding them over the bridge from school to work, be best given exclusively to a reconstituted careers service?
    Dr. Boyson: My hon. Friend's point is interesting. Careers services provided outside schools are not under the control of my Department, but careers teachers in schools are under its control. It is important to link all aspects. It is also important to create the right atmosphere inside schools, for example, by showing films on different careers. Children should grow up realising that they must prepare for an outside world
    Mr. Foster: Does the Minister realise that the amount of time that careers officers now devote to advising on the youth opportunities programme means that they must substantially reduce the amount of time that they spend in schools? There is no value in the Department issuing guidelines to head teachers and careers teachers when they are receiving such a poor service from careers officers.
    Dr. Boyson: I take that point. I made inquiries about this matter this morning. The number of pupils and students interviewed in the year to September 1981 was higher than in the previous year.

    Inner London Education Authority
    Mr. Dobsonasked the Secretary of State for Education and Science what representations he has received about educational standards in the Inner London Education Authority.
    Dr. Boyson: As I informed the hon. Member for St. Pancras, North (Mr. Stallard) on 19 January, my right hon. Friend met representatives of the Inner London Education Authority at their request. Following the publication of the Local Government Finance (No. 1) Bill, he has received more than 3, 000 letters on aspects of education in inner London, including educational standards.
    Mr. Dobson: Does the Minister agree that the bulk of those representations urge the Government to give proper financial support to the Inner London Education Authority and to acknowledge that the standard of performance in inner London primary schools has risen above the national average? Will that not automatically work its way through to improved standards in secondary schools? Should not the Government stop their stupid, carping criticism of the ILEA and its teachers and give it the money to do the job?
    Dr. Boyson: I am interested in the hon. Gentleman's question. The report of Her Majesty's Inspectorate on London in December 1980 praises the primary schools. However, it also makes it clear that there is not the response and achievement in relation to the resources provided that there is in other areas. The GRE for inner London is £512 million, whereas the intended expenditure, which is still being discussed, is £795 million—55 per cent. above the GRE. The GRE for inner London is already 33 per cent. higher than it would be for a similar number of pupils in the shires.
    Mr. Dickens: Does the Department have any proposals to test the efficiency and effectiveness of teachers after they have passed their first year's initial training? They appear to have a licence to teach for life following that one year. Should they not be tested?
    Dr. Boyson: Teachers must undergo a probationary period, whether in inner London or any other area. We are considering the length of that probationary period and the question of induction. I agree that it is essential that there should be some assessment of teachers at the end of their probationary period.
    Mr. Dubs: Does the Minister agree that if the Inner London Education Authority were to reduce its expenditure to the GRE level, the effect would be a drastic fall in education standards in inner London?
    Dr. Boyson: As the number of pupils who obtain five 0-levels in London is half the percentage for the rest of the country, I should hate to see a further fall. If the expenditure were reduced to £670 million, a grant would then be given by the Government. London would gain £19 for every £10 cut, because for every £10 cut a Government grant of £9 would be put in as a bonus. I am sure that that would be welcomed by most ratepayers in inner London.
    Mr. Brinton: Does my hon. Friend agree that education spending has doubled during the past 20 years in real terms—probably more in inner London—but that standards in inner London, if they have risen at all, have risen minutely? Surely it is not a question of spending and resources, but of proper teaching of proper subjects.
    Dr. Boyson: I agree with my hon. Friend. The HMI report of December 1980 on the subject of inner London states:
    "Schools have, in any case, very generous staffing, resources and funding which in HMI's view they do not always deploy wisely. There are disturbing examples of waste and inefficiency."
    In other words, ILEA can save the money and still maintain or raise the standards.

    Colleges of Further Education (Capacity)
    Mr. Kenneth Carlisleasked the Secretary of State for Education and Science whether colleges of further education will have sufficient spare capacity for extra students arising from the new training initiative; and whether he will make a statement.
    The Under-Secretary of State for Education and Science (Mr. William Shelton): My right hon. Friend is satisfied that the spare capacity available to local education authorities generally, together with other suitable premises which might be provided with Manpower Services Commission funds, will enable expansion to take place on the scale proposed.
    Mr. Carlisle: I thank my hon. Friend for that reply. Is it not wrong that some colleges of further education have to cut back this year when they will have to expand the following year to accommodate the new training initiative? Should there not be greater flexibility between the budgets of the Department of Education and Science and the Department of Employment to avoid that inconsistency?
    Mr. Shelton: I know of my hon. Friend's interest in the matter. In July last year my right hon. Friend the Prime Minister made an additional £60 million available, and my right hon. Friend the Secretary of State made available a further £35 million last December to pupils who stay on. How the money is used is a matter for the local education authority.
    Mr. Kinnock: Will the Under-Secretary confirm that unemployed young people who do not take advantage of the youth training scheme next year will be paid nothing, and that young people this year who, in trying to obtain educational qualifications, have to attend an institution for more than 21 hours a week also will get nothing? Will he explain to those young people, who get nothing if they stay in education and training this year and will get nothing if they refuse to stay in education and training next year, the inconsistency in the Government's policy?
    Mr. Shelton: I accept that at present there are certain anomolies. However, I am delighted to tell the hon. Gentleman that there is an increase of about 10 per cent. in the number who are staying on in full-time education. I also remind him that the parents of children in full-time education receive the child benefit allowance.
    Mr. R. C. Mitchell: When does the Under-Secretary propose to start consultations with technical colleges about the part that they are expected to play in the new training initiative?
    Mr. Shelton: Consultations are going on all the time. Officials from the Department, in conjunction with officials from the Manpower Services Commission, are on a number of different steering groups considering how this can best be organised. Consultations are going on all the time at every level.

    Medical Research Council
    Mr. Whiteheadasked the Secretary of State for Education and Science to what extent, in fixing the budget of the Medical Research Council, he takes into account the provision of postgraduate medical education by universities (a) in total and (b) in London.
    Mr. William Shelton: The Medical Research Council is not concerned with postgraduate professional training for medical practitioners.
    Mr. Whitehead: When medical research within the universities is being calculated by the Department, what figure of lost posts in England and Wales, particularly in medical schools, is taken into account? In view of the threatened sacking of the medical school unit at the Westminster medical school, whose work on Vitamin B12 deficiencies is, literally, life-saving, can the hon. Gentleman assure us that such valuable research will be safeguarded by his Department?
    Mr. Shelton: That is not a matter for my Department. It is a matter for the Department of Health and Social Security, which is responsible for all medical training. The Medical Research Council is not responsible for medical training. It is responsible for research training and biomedical sciences. The people who do that do not usually have medical degrees, and they study in the science departments of universities.
    Mr. Carter-Jones: In allocating resources, whether in or out of London, will the Under-Secretary ensure that resources are made available to those parts of the economy with the greatest needs—the elderly, the incontinent, arthritics, prevention, and rehabilitation—and not so much to esoteric research, which yields little for our people?
    Mr. Shelton: I am sure that my right hon. Friend the Secretary of State for Social Services will take notice of what the hon. Gentleman said.

    State Schools
    Mr. Stokesasked the Secretary of State for Education and Science whether he is satisfied with the standard of education in State schools in England.
    Mr. Formanasked the Secretary of State for Education and Science if he will make a statement setting out the Government's policy for encouraging the achievement of higher standards in both primary and secondary education.
    Dr. Mawhinneyasked the Secretary of State for Education and Science if he is satisfied with the standard of educational attainments in secondary schools.
    Sir Keith Joseph: There is always room for improvement in both primary and secondary schools. Our educational policies are directed towards that end.
    Mr. Stokes: Has my right hon. Friend seen recent reports that many pupils cannot do simple sums, cannot read a train timetable, and do not even know the meaning of the word "inflation"? Does he therefore think that a return to the teaching of the three Rs in schools might be preferable to some of the more modern, progressive and trendy systems of education?
    Sir Keith Joseph: I am sure that my hon. Friend is right to be worried about the revelations in the Cockcroft committee's report. Most of its recommendations are addressed to teachers. I hope that those recommendations will be widely read. The Government will consider what falls to them in that connection and what they can do about it.
    Mr. Forman: I was interested to hear my right hon. Friend's brief statement in reply to that question. Will he take time later, in the Official Report and elsewhere, to make a fuller statement in answer to my question, which has been linked with question 11, and emphasise two matters which are important for standards in education: first, the importance of teaching practice in the context of teacher training; and, secondly, greater emphasis in his policy on absolute rather than relative standards in public examinations?
    Sir Keith Joseph: I accept all that my hon. Friend said as ingredients in the progress that we all want to make towards more effective education. I also emphasise the importance of increased parental choice, which my predecessor introduced in legislation which comes into effect this autumn, the importance of in-service training, and, above all, the importance of the quality of head teachers and teachers.
    Dr. Mawhinney: Does my right hon. Friend agree that staff-student ratios are better now than they were under the Labour Government? Does he also agree that education standards might be put at risk if, in making the necessary reductions in teacher posts to keep pace with falling rolls, consideration were not given to the fact that children are taught in discrete class units and that, therefore, global comparability numbers are not necessarily the right ones?
    Sir Keith Joseph: I thoroughly agree. The pupil-teacher ratio is at a record level, yet there are diseconomies in the falling school rolls.
    Mr. Newens: Is the right hon. Gentleman aware that the savage reductions in the rate support grant, which affect

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    local education authorities—including Conservative-controlled authorities, such as Essex—mean that cuts are being made in basic necessities? That will inevitably lead to a drop in standards. Does the right hon. Gentleman not realise that since the war the biggest threat to education standards has come from the measures pursued by the Government?
    Sir Keith Joseph: No, Sir. Education authorities have a difficult set of problems to solve, but in the interests of the country, of teachers and of pupils we must rectify the balance between public expenditure and the economy as a whole.
    Mr. Kinnock: How can the Secretary of State lay claim to a belief that he will raise educational achievements when he is presiding over schools that have £100 million less in real terms to spend this year on essential books and teaching materials than in 1978–79? In response to the question asked by the hon. Member for Peterborough (Dr. Mawhinney), will the right hon. Gentleman tell us what action he will take to ensure that levels of provision are raised in order to raise levels of attainment? Does the right hon. Gentleman really believe that less means better?
    Sir Keith Joseph: I do not believe that less means better; nor do I believe that more necessarily means better. The Government have provided money so that local education authorities can spend an extra £20 million this year on books and equipment if the pay and price assumptions built into the money made available are validated.
    Mr. Eggar: If we are to improve standards, is it not vital that it should be made easier to remove poor teachers?
    Sir Keith Joseph: My hon. Friend has touched on an important factor that I am due to discuss before long with education authorities.
    Mr. Beith: What do Her Majesty's inspectors of education consider has been the impact of cuts on standards?
    Sir Keith Joseph: The hon. Gentleman and I must await the report's completion.

    Violence (Pupils and Parents)
    Mr. Greenwayasked the Secretary of State for Education and Science if he will issue a circular to schools giving guidance to local education authorities on methods of dealing with violent pupils or parents.
    Sir Keith Joseph: I deplore the use of violence and I stand ready to give my support to local education authorities and schools in their efforts to curb it. I have no evidence at present that local education authorities look to me for detailed guidance.
    Mr. Greenway: Has my right hon. Friend seen the second report of the Select Committee on Education, Science and Arts, which was issued this morning? The fourth recommendation states that the head, staff and the governors should have freedom to determine the disciplinary policy and practice of a school. Does my right hon. Friend agree that in that way discipline may be returned to individual schools and that will strengthen a school's individuality and the way in which it caters for the needs of particular children?
    Sir Keith Joseph: I have not yet seen the report, but I shall study its recommendations and analysis with great interest.
    Mr. Adley: On the assumption that my right hon. Friend is familiar with the contents of the Criminal Justice Bill, will he take an early opportunity to discuss its implications with education authorities and particularly the emphasis placed on parents being responsible for their children's criminal activities? Will he ensure that that information is disseminated as widely as possible?
    Sir Keith Joseph: I cannot give that assurance, but I can undertake to inform myself about the implications of my hon. Friend's suggestion.

    Handicapped Pupils
    Mr. Edwin Wainwrightasked the Secretary of State for Education and Science what is the total number of pupils in various categories of handicap in England and Wales at the latest available date; and how many are receiving their education in special classes.
    Dr. Boyson: As the answer contains a number of figures, I shall publish the information for England in the Official Report. My right hon. Friend the Secretary of State for Wales is responsibile for information relating to pupils in Wales.
    Mr. Wainwright: Does the right hon. Gentleman agree that, compared with other developed countries, Britain is almost at the bottom of the education league? Does he not realise that the children who need special education and tuition are those who will suffer most? When will he restore the education of those unfortunate children who require special education to a reasonable standard?
    Dr. Boyson: The hon. Gentleman has long been concerned about those children who require special education. Indeed, 18 months ago he spoke on the Second Reading of the Education Bill. The money for special education has remained static, while numbers have fallen. That means that more should be spent per pupil than, before and the hon. Gentleman will no doubt be glad to hear that.
    Mr. Alton: Is the number of peripatetic teachers who deal with handicapped children in their homes being maintained or are local education authorities cutting back on their numbers?
    Dr. Boyson: I cannot answer that straight away. If the hon. Gentleman wants an answer I shall send him a letter with that information, which I should also like to know.
    Mr. Marlow: Will my hon. Friend ensure that all would-be teachers are trained in basic mathematics so that they will realise that if they do not accept the 3.4 per cent. pay offer there will be fewer teachers?
    Dr. Boyson: My hon. Friend has asked a two-pronged question. No one aged 18 is enrolled in a college of education unless he has O-level English and maths. In 1977, 37 per cent. were enrolled without O-level maths. That shows that there has been an improvement and that teachers may understand the figure that my hon. Friend has mentioned.
    Mr. Foster: Has the Minister seen the report published only this week about the appalling difficulties that

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    physically handicapped 16 to 19-year-olds face, both at work and in education? Does he agree that the services provided for 16 to 19-year-olds in further education are completely inadequate? If so, what will he do about it?
    Dr. Boyson: I have not read that report and the hon. Gentleman has an advantage over me. However, I shall consider it. I do not agree that provision is totally inadequate. We should all like to see improvements and the economic take-up that will make them possible.
    Following is the information:

    Numbers of Pupils in Various Categories of Handicap in England,

    and those in Special Classes January1981

    Total number of handicapped pupils

    Handicapped pupils in special classes

    Blind

    975

    7

    Partially sighted

    2, 098

    205

    Deaf

    3, 471

    491

    Partially hearing

    5, 029

    3, 365

    Physically handicapped

    13, 990

    639

    Delicate

    4, 986

    348

    Maladjusted

    21, 256

    1, 822

    Educationally subnormal

    101, 111

    8, 400

    Epileptic

    1, 007

    94

    Speech Defects

    2, 535

    1, 085

    Total

    156, 458

    16, 456

    Mathematics
    Mr. Guy Barnettasked the Secretary of State for Education and Science if he will make a statement about Her Majesty's Government's policy towards the Cockcroft report on school mathematics.
    Sir Keith Joseph: The Government welcome the report, and we hope that it will be widely read by all of those with an interest in the teaching of mathematics. We shall be considering the recommendations directed to us.
    Mr. Barnett: I hope that the right hon. Gentleman has paid great attention to the report. Does he recognise that one of the issues raised in the report directly concerns him? I refer to the number of qualified mathematics teachers available. Does the right hon. Gentleman realise that it is no solution to attempt to attract mathematicians to the profession by paying them more than other teachers? That would be divisive of the profession. Does he accept that we must increase the amount of training and re-training for mathematics teachers? The Secretary of State's predecessor expressed concern about that two years ago. What have the Government done since then to deal with the problem?
    Sir Keith Joseph: I cannot accept, Mr. Teacher—[Laughter.] I cannot accept, Mr. Speaker, that the Government should necessarily deny a partial market solution to a shortage. However, the Government have two schemes for helping to reduce the shortage of mathematics teachers and we shall consider what more needs to be done in the light of the report.
    Mr. Peter Bottomley: Will my right hon. Friend do his best to encourage schools to let parents know that it is important that their children should be more successful at mathematics? At present there is a great gap in understanding about the importance of mathematics for future life.
    Sir Keith Joseph: Yes, Sir. However, my capacity to influence what schools tell parents, and their capacity to influence parents, is necessarily slightly diluted.

    Tertiary Education
    Mr. Hal Millerasked the Secretary of State for Education and Science if he is satisfied with co-ordination within his Department in implementing Her Majesty's Government's policy for the tertiary sector of education.
    Mr. William Shelton: Yes, Sir.
    Mr. Miller: While congratulating my hon. Friend on the state of order in his Department, may I none the less ask him whether he agrees that there is confusion in the minds of the public and especially among the universities that have had their grants reduced, resulting in a more unfavourable student-fellow ratio than in polytechnics and other local authority colleges? Is he aware that there has also been direction on the numbers of university departments and the numbers of people in those departments, while that control is not applied to local authority colleges? What are the student public to make of that situation?
    Mr. Shelton: My right hon. Friend the Secretary of State has today answered some questions on universities. As my hon. Friend will know, the division of funding among the various universities is for the University Grants Committee and not for the Government.
    Mr. Freeson: Will the Minister accept that it is not just a question of university education? Is he satisfied that there is adequate co-ordination between his Department and the Department of Employment and other Departments about tertiary education and training for 16 to 19-year-olds? Will he tell the House what specific negotiations and consultations are taking place between his Department and the Department of Employment and local education authorities, particularly in inner city areas, about the expansion of further education and training and the establishment of a development programme in that sphere?
    Mr. Shelton: The right hon. Gentleman is right. That is an important area, the development of which is moving fast because of the expansion of the MSC programmes. I reassure him and the House that the Department of Education and Science is deeply involved. It has representatives on the special programmes committee, in conjunction with the MSC committee. It also has representatives on the steering group committee that deals with united vocational preparation. It is in consultation on every aspect of the matter. I am convinced that the outcome will be satisfactory.
    Mr. Beith: What is Her Majesty's Government's policy on tertiary education?
    Mr. Skinner: What is more, what is it?
    Mr. Beith: Are the Government opposed to the creation of sixth form colleges and the association of sixth form colleges with colleges of further education?
    Mr. Shelton: When plans are put forward under section 12 of the Education No. 2 Act 1980, my right hon. Friend the Secretary of State looks at the individual responses and needs and makes a decision. In general, the policy of the Government on tertiary education is to make

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    available as wide a range as possible of attractive options to youngsters at 16 so that they will remain in full-time schooling. I am delighted to say that a further 10 per cent. of them are doing so now.
    Mr. Whitehead: If the Minister is so satisfied about the present state of affairs, may I ask whether he is also satisfied with the envisaged cut in the staff-student ratio in the colleges? How can there be an expansion of the services that he and we say we wish if the staff-student ratio is to be further cut?
    Mr. Shelton: That is a separate question. If the hon. Gentleman would like to table it, I shall answer it.

    Universities
    Mr. Hannamasked the Secretary of State for Education and Science what is his estimate of (a) the savings by 1984 as a result of the reductions in university expenditure and (b) the cost of redundancies of university staff in the same period.
    Mr. Waldegrave: My right hon. Friend estimates that by the end of the financial year 1983–84 cumulative savings at constant prices will be over £200 million and that the savings thereafter will be of the order of £150 million a year. The cost of redundancies depends on decisions by individual universities about how to adjust to their new levels of funding.
    Mr. Hannam: Does not the fact that the Government have had to make a substantial increase in the finance available for the redundancy scheme show that the case for extension of the time scale is well founded?
    Mr. Waldegrave: No, Sir. Even the figures of the Association of University Teachers, which made as favourable assumptions for teachers as possible, show that there was an outlay of £100 million on academic redundancies to make an annual saving of £77 million. That is not a bad deal.
    Mr. Cryer: Is it not disgraceful that the Government are continuously talking about cutbacks in university expenditure, and a reduction of choice and of opportunities for young people, while at the same time they are talking about spending between £6 billion and £10 billion on Trident nuclear missiles? Where are the Government's priorities? Surely they should be spending more on universities and creating more opportunities for young people?
    Mr. Waldegrave: The Government will be spending billions of pounds on higher education. That they are also spending billions of pounds on the proper defence of the country is entirely just.

    Examination Results (Independent Schools)
    Mr. Campbell-Savoursasked the Secretary of State for Education and Science whether he will take steps to ensure that the procedure for the publication of examination results by the independent sector in education is brought into line with that which exists in the State education sector.
    Dr. Boyson: Schools participating in the assisted places scheme are already required to publish the same information on examination results as maintained schools. My right hon. Friend has no powers to extend this requirement to schools in the independent sector.
    Mr. Campbell-Savours: Why are many schools failing to publish those examination results? The results are not being made available to the public in the way intended by the law. Could it be that examination standards in the public schools are not as high as in State schools?
    Dr. Boyson: The hon. Gentleman had better ask individual public schools. The maintained schools would not have told us their results if we had not passed the Act last year. Parents can check the examination results of public schools before they pay the fees for their children to go there. As people with children in the maintained schools sector pay rates and taxes, they, too, have the right to know those results.

  PRIME MINISTER

    Engagements
    Mr. Leeasked the Prime Minister if she will list her official engagements for 16 February.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others, including one with the President of the Council of Europe. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Lee: Now that the bookmakers are making my right hon. Friend the favourite to win the next general election, will she, in planning her second term of office, give serious consideration to the possibility of phasing down the retirement age by, for example, one year each year over the next five years. so that new job opportunities are given to our young people?
    The Prime Minister: I am grateful to my hon. Friend and to the bookies for the fact that they are saying -Now's the time to back Maggie." With regard to the latter part of my hon. Friend's question, the cost of having a retirement age of 60 for men would be so large that it could not be considered now. It would cost about £2.5 billion net a year. As we are already paying between £12 and £13 billion in retirement pensions, and as we must remember that we must take the money from the working population, I cannot give my hon. Friend any encouragement about reducing the retirement age to 60. However, I believe that a Select Committee is considering a common retirement age at the moment.
    Mr. Foot rose——
    Hon. Members: Retire.
    Mr. Foot: I refer to the right hon. Lady's earlier reply. How do those facts accord with the collapse in manufacturing output to the lowest figure for over 14 years? Does the right hon. Lady regard that figure as confirmation or otherwise of the optimistic prophecies that she has been making over recent months?
    The Prime Minister: I think that the right hon. Gentleman is referring to one month's figures—those for December. He will remember that—far from the worst weather for 15 years—we have had the coldest weather since the late 1800s. May I refer him to the view about those figures—incidentally, taken quarter over quarter they represent an increase in output—expressed last night

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    by one of the policy advisers to the previous Government, who said that if one looks behind the figures for the reasons for the decline, they become a lot less interesting? He said that there were two reasons and also that
    "in November we had strikes in British Leyland and Ford, which cut production in that month."
    This point is much more important:
    "in December we had this extreme spell of cold weather which not only cuts overtime working but also cuts deliveries from the factories to the shops and automatically production stops."
    He went on to say:
    "I think that the trend over, say, the rest of this year"—[Interruption.]
    That was the political adviser to the last Labour Government dealing with the question that the right hon. Gentleman asked. He continued:
    "I think the trend over, say, the rest of this year is certainly strongly upwards."
    Mr. Foot: Has the right hon. Lady compared those figures with the recent estimates of the CBI and realised that they very much accord with its estimates? Does she take any account of these matters, or will she go on prophesying that the figures are getting better when all the facts and the mass redundancies throughout the country prove to all that they are getting worse? Are we to have more of the same policy when her right hon. and learned Friend the Chancellor produces his Budget?
    The Prime Minister: If one compares the fourth quarter of last year with the third—[Interruption.] The Opposition may not like it, but industrial production actually rose. It fell in December because of the terrible weather, much longer holidays and strikes, but it is the right hon. Gentleman who backs the strikes, not me.
    Mr. Rippon: Will my right hon. Friend consider today instituting an inquiry into the circumstances and effects of the transfer of titles of Times Newspapers Ltd.? In particular, will she seek an assurance from her right hon. Friend the Secretary of State for Trade that there has been no breach of the letter or the spirit of the undertakings given by the proprietor in January last year?
    The Prime Minister: It looks as though the legal situation is very complex and there is more than one view upon it. As my right hon. and learned Friend knows, I am, therefore, not the person to pronounce on the legal matter. My right hon. Friend the Secretary of State for Trade is of course looking into it to see whether the law has been upheld.

    Benefits
    Mr. R. C.Mitchellasked the Prime Minister whether she is satisfied with the co-ordination between the Department of Employment and Department of Health and Social Security with regard to the prompt payment of unemployment and supplementary benefits.
    The Prime Minister: In general, I am satisfied with the co-ordination between the Department of Employment and the Department of Health and Social Security on the payment of benefits to unemployed people. Following the comprehensive Rayner scrutiny of the system last year, further improvements are being introduced and other possibilities are under consideration.
    Mr. Mitchell: Is the Prime Minister aware that Members of Parliament are receiving more and more complaints about delays in paying supplementary and
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    unemployment benefits, which is causing considerable hardship to a large number of people? Is she aware that many local DHSS offices are now unable to cope with the increased demand caused by the Government's economic policies? Will she either authorise an increase in staff or introduce a simplified procedure for claiming benefits?
    The Prime Minister: As the hon. Gentleman knows, the Government have been trying to introduce a simplified procedure for the very reasons that he has stated. Staffing levels are reviewed so that they bear a direct relation to the increased load placed on local offices. I am sorry if the hon. Gentleman has found difficulty. There has been some difficulty due to the bad weather and the rail strikes and some letters and forms have not been received. If the hon. Gentleman has any particular cases in mind, we shall gladly look into them, because we are anxious that benefits should be paid promptly and on time.
    Mr. Best: Will my right hon. Friend confirm that Girocheques are dispatched deliberately to avoid the weekend so that claimants do not have the difficulty of being without payments over the weekend?
    Mr. McNamara: Rubbish.
    Mr. Best: Will my right hon. Friend also confirm that during the recent rail dispute Girocheques have been despatched a day earlier to ensure that there is no difficulty? Is my right hon. Friend aware that my recent letter to the Under-Secretary of State for Health and Social Security, my hon. Friend the Member for Wallasey (Mrs. Chalker), was the only communication that she had received complaining about delays in the payment of Girocheques?
    The Prime Minister: We have not received many complaints about the payment of Girocheques. I confirm what my hon. Friend says. The offices strain to see that claimants receive a good and prompt service.
    Mr. Freeson: How can the service be improved or even maintained when the work load per staff member is increasing significantly? Is the right hon. Lady aware that Ministers' answers to questions that I have tabled recently on this matter suggest that the staff is inadequate in number and therefore overloaded? Does she therefore agree that people are not receiving the benefits to which they are due, that there are long queues and that there is a failure in co-ordination?
    The Prime Minister: I do not believe that there is a failure in co-ordination. The staff in those offices work extremely hard. The staff levels are always under review in relation to work loads in local offices. Moreover, the supplementary benefits scheme has recently been the subject of a major review, the results of which are steadily being implemented.

    Engagements
    Mr. Ancramasked the Prime Minister if she will list her official engagements for Tuesday 16 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Ancram: Has my right hon. Friend had time to see the leaflet distributed to unemployed people by the Department of Health and Social Security seeking to define the suitability of jobs for people on the

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    unemployment register? In the light of the present tragic unemployment figures, does she consider that the definitions provided in that leaflet are still relevant or does she believe that they make the provision of jobs more difficult at a time when we should be doing everything possible to make more jobs available?
    The Prime Minister: I have seen the leaflet to which my hon. Friend refers. As it received a good deal of publicity a week or so ago I looked at the definition of what is a suitable job, which seems to have remained unchanged since 1946. It seems to me that the definition would preclude people from taking jobs with reasonable pay and I have asked my right hon. Friend the Secretary of State for Social Services to look into the matter.
    Mr. Steel: Has the Prime Minister had time to consider early-day motion No. 196 about the so-called youth training centres set up by the Workers' Revolutionary Party?
    Mr. Skinner: How many women are there?
    Mr. Speaker: Order.
    Mr.Speaker:Order.
    Mr. Skinner: I was only asking about the percentage of women.
    Mr. Speaker: Order. I know that, but the hon. Member for Bolsover (Mr. Skinner) must try to control himself. It seems that whenever the Leader of the Liberal Party speaks the hon. Member for Bolsover feels that he must contribute as well. That is not so.
    Mr. Steel: Given that the Department of Employment is concerned about this matter, what steps will the Government take to draw the attention of the public to the abuses taking place at the centres?
    The Prime Minister: If there are abuses, we shall of course look into the matter. I do not know the truth or otherwise of what is contained in the early-day motion, but
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    I assume that it is true, because it has been put down —[HON. MEMBERS: "Oh."] Perhaps I should say that I assume it to be true for the purposes of the question. That might be a safer way to put it. If it is true that
    "young people have been trained in anti-police methods and indoctrinated with extreme revolutionary views, without the knowledge of public figures on Merseyside whose names were originally used in support of the scheme",
    that is a very serious matter. I should take any such action extremely seriously and it would of course have to be investigated.
    Mr. Newensasked the Prime Minister if she will list her official engagements for Tuesday 16 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Newens: Will the right hon. Lady find time today to consider the financial crisis now facing the Essex county council as a result of the rate support grant settlement, which has dismayed even its Conservative leaders, who are worried by the response that they have received from her right hon. Friends? Is she aware that this threatens educational services, old people's homes, fire cover and many other local government services in Essex? It is extremely important that she should intervene to see that something is done about it.
    The Prime Minister: As the hon. Gentleman knows, all rate support grant figures have been published and the local authorities know them. We are debating the whole matter today, as it affects England and Wales. I am sure that he will put those views strenuously to my right hon. Friend.
    Mr. Speaker: I have received notice of three applications for emergency debates under Standing Order No. 9. I shall take them in the order in which they were received.

Leyland Vehicles
3.31 pm
Mr. Tam Dalyell: 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 situation of Leyland Vehicles in Lancashire following the talks yesterday."
The management has said that if the dispute is not settled by the end of the week, in the words of Mr. David Andrews, the managing director,
"It would be out of our hands very swiftly."
It is urgent because, if the members should vote on Thursday or Friday to continue the dispute, the management has said that it will close Leyland Vehicles and come out of the industry.
The matter is important because of the knock-on effect; eighteen thousand jobs are directly involved and there are multiplier or, dare I say, divider effects which will ripple around the British economy.
My task is to persuade you, Mr. Speaker, that this matter should have precedence over other important business. No Government should be able to pass by, as might a biblical Levite in this situation, on the other side of the road. Surely the Government's position ought to be made clear either in a short debate or by a statement. This situation must be clarified before fateful decisions are taken. Need I say any more, Mr. Speaker?
Mr. Speaker: The hon. Member for West Lothian (Mr. Dalyell) gave me notice before 12 noon today that he might seek to make an application under Standing Order No. 9.
The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely, "the situation arising from the talks on Leyland Vehicles involving 18, 000 jobs directly, with a multiplier or divider effect around the British economy."
I listened with anxious concern, as the House has done, to what the hon. Gentleman said in submitting his application because he has called attention to a very serious matter. As the House knows, under the Standing Order I am directed to take account of the several factors set out in the order, but to give no reasons for my decision.
I have carefully considered and listened with deep concern to the hon. Gentleman's remarks, but my powers are limited and I have to rule that his submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.

Domestic Gas Prices
3.34 pm
Mr. David Ennals: 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 decision of the British Gas Corporation to announce on Thursday 18 February a 22 per cent. increase in domestic gas prices within the next nine months."
As I understand it, it will be 12 per cent. in April and a further 10 per cent. in October.
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This is a grave decision at a time when millions of people face great difficulties in paying their existing gas bills, particularly after one of the coldest winters in living memory. Hundreds of thousands of people have been forced into debt and are paying off accumulated bills by reducing their immediate spending, including those on supplementary benefit. The advice bureau in my constituency is crowded with such examples. For those dependent on State benefits—pensioners, the sick, unemployed, one-parent families and others with very small incomes—this will come as a fearful blow causing grave hardship and, in many cases, disconnections for non-payment.
The cumulative effect will be an increase of over 100 per cent. in the price of domestic gas in the past two years. There will be a 22 per cent. increase this year when millions of people on benefit have been limited to an increase of 9 per cent. for the same period covered by these gas increases. Of course, this will affect the retail price index.
This decision comes only one week after an Energy Minister denied that there would be increases of this level. This is the first opportunity to raise the matter in the House since it was announced yesterday. The urgency of the matter is clear, because if it could be debated today or tomorrow it would give the House an opportunity of preventing the announcement of the decision on Friday. For once, the House of Commons would be able to speak. Therefore, Mr. Speaker, I hope that you will accept my submission.
Mr. Speaker: The right hon. Member for Norwich, North (Mr. Ennals) gave me notice this morning before 12 noon today that he might seek to raise a matter under Standing Order No. 9 this afternoon.
The right hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the decision of the British Gas Corporation to announce on Thursday 18 February a 22 per cent. increase in domestic gas prices within the next nine months."
As the House knows and will have heard me say more than once, this is not the only way by which a matter of this sort can be discussed, although in this case the right hon. Gentleman has drawn my attention to the shortage of time involved.
I have given careful consideration to what the right hon. Gentleman said and I have to bear in mind the instructions that the House has given me. I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Lawrence Scott Electro Motors Ltd.
3.38 pm
Mr. Charles R. Morris: 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 scale of police operations undertaken by the Greater Manchester police today outside the premises of Lawrence Scott Electro Motors Limited at Openshaw, Manchester."
I apologise to the House for imposing a further application on it, but that this matter is urgent and specific is

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evidenced by the fact that 200 to 300 policemen of the Greater Manchester police force are at this moment surrounding the premises of the Lawrence Scott company in support of a decision by the management of that company to strip the factory of machinery and engineering products. It is urgent because today's events, which will probably continue over the next few days, are the culmination of an industrial dispute which has lasted 10 months.
It is urgent because my constituents, who live in houses which stand cheek by jowl with the factory, during the course of the dispute have been awakened from their beds by sledgehammer-wielding teams of bailiffs taking repossession of the factory. The householders' children have been subject to anxiety as a result of the hazardous helicopter operations initiated by the management. As ratepayers, they will now be obliged to pay for the massive police presence in support of the commercial activities of the managing director of the Mining Supplies Company which precipitated the dispute when it took over the Lawrence Scott company in October 1980.
That this matter is important is clear from the fact that 650 of my constituents, many of whom have invested a lifetime's skill in the Lawrence Scott company, have now lost their jobs. Some may never work again. They live in an area in which few if any other jobs are to be had. I believe that in justice my constituents are entitled to expect the House to find time to consider this important matter.
Mr. Speaker: The right hon. Member for Manchester, Openshaw (Mr. Morris) gave me notice that he would seek to move the Adjournment of the House to discuss
"the scale of police operations undertaken by the Greater Manchester police today outside the premises of Lawrence Scott Electro Motors Limited at Openshaw, Manchester."
The House knows that an application under Standing Order No. 9 is not the only procedure under which this important matter can be discussed. The right hon. Gentleman will know that my powers are strictly limited to whether we have a three-hour debate tonight or tomorrow night on the important issue that he has raised.
I have to take into account the several factors set out in the order but to give no reasons for my decision. I must rule that the right hon. Gentleman's submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.
Later——
Viscount Cranborne: On a point of order, Mr. Speaker. We have had today three applications under Standing Order No. 9. It is a device that is being used increasingly in the House. Will you rule, Mr. Speaker, on whether the Standing Order is being abused?
Mr. Speaker: The hon. Member for Dorset, South (Viscount Cranborne) entered the House at the last
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election. It has been my honour and privilege to serve in 11 Parliaments. [HON. MEMBERS: "Hear, hear".] There are times when my Welsh modesty comes to the fore! In every Parliament in which I have served the issue of emergency debates has been raised. It is in the hands of the House to change the rule if it so wishes. I understand that it decided not to do so when the issue was raised some time ago.

Canada Bill
Mr. David Ennals: On a point of order, Mr. Speaker. I apologise for speaking again, hut I wish to raise an issue of which I gave you notice.
On Thursday 11 February, as reported in column 1126 of Hansard, my hon. Friend the Member for Hackney, Central (Mr. Davis) raised with you the propriety of debating the Canada Bill tommorrow as its Second Reading might pre-empt the issues that are the subject of a petition to the House of Lords following a ruling by Lord Denning and two other Law Lords. You promised, Mr. Speaker, to make a statement at the appropriate time.
In his submissions to you, Mr. Speaker, my hon. Friend raised only the petition to the House of Lords for leave to appeal in the case brought by the Indians of Alberta, Nova Scotia and New Brunswick, but in addition the Indians of Saskatchewan have issued a writ in the High Court seeking certain declaratory orders. The case concerns five instruments that affect the British Crown and it was begun in the Chancery Division of the High Court on 14 January. This is not an attempt to delay proceedings in Parliament as the date for Second Reading of the Canada Bill came a month after the lodging of the summons in the High Court.
The Saskatchewan case raises issues that are not touched on in the Alberta case. I shall not go into the details of the differences, Mr. Speaker, but I can assure you that they are issues that are different from those which are the subject of a petition in the House of Lords.
As these legal submissions are being considered now, I submit that it would be improper for the Second Reading of the Canada Bill to be taken tomorrow. I am asking you now, Mr. Speaker, to take into consideration the documentation that I have supplied to you before you give your ruling, which I understand you will deliver tomorrow.
Mr. Speaker: I am much obliged to the right hon. Member for Norwich, North (Mr. Ennals). He has submitted a long document on the issue that he has raised and that is being considered. I shall give my ruling tomorrow before the Second Reading of the Canada Bill is debated, which I think is the appropriate time.

Maritime Safety
3.47 pm
Mr. John Prescott: I beg to move,
That leave be given to bring in a Bill to increase the safety of maritime vessels and their crews in United Kingdom territorial waters; and for connected purposes.
This weekend witnessed the loss of an oil rig off Canada and a Greek tanker in the Atlantic, with the loss of more than 100 lives. That emphasises the danger of the seafaring occupation. Even in the United Kingdom, the number of deaths among seafarers is four times that among those who are engaged in the dangerous occupation of coal mining.
My Bill, which is supported by hon. Members with Merchant Navy seafaring experience, is designed to improve safety standards for our seafarers. Some of the present inadequacies were highlighted by the tragic loss of the "Union Star" and the Penlee lifeboat in December, with the loss of 16 lives. That same week over 100 seamen died in roughly the same area. That disaster rated very little press attention.
Last week in the High Court in London judgment was delivered on the loss of the Liberian vessel "Salem", confirming that vessels are being sunk deliberately for the purpose of fraud. This twentieth century development of the nineteenth century coffin ship and marine frauds is growing to one a week. Some of it takes place under the British flag, but 90 per cent. of the practice takes place under flags of convenience.
The increasing growth of flags of convenience fleets—they now amount to over a third of world tonnage and many of the vessels are European—owned—is responsible for more than four times as many vessels being lost under such flags as the average loss under the flag of traditional maritime countries. The losses of such vessels, even with their entire crews, do not warrant investigation or inquiry in some of the flag of convenience countries. That applies even to British flags of convenience vessels. The entire crew of 17 of the "Barbra 'B'" was lost, but that did not warrant any inquiry by the Government. However, Panama conducted an inquiry into the loss of that British ship.
The only organisation to resist such practices and trends is the international trade union movement, which uses its industrial strength to protect exploited seamen against such practices. Even that is to be outlawed by the Government's trade union Bill, which has been welcomed by the flag of convenience operators. As British operators switch to phoney flags in the name of competition, seamen are forced to follow and to serve on ships which are less safe and which present greater risks to themselves.
The "Union Star" was British-owned and sailed under an Irish flag. It was able to carry two fewer men, with fewer qualifications, than would have been required if it had been a British-registered vessel. The Bill will require all vessels in United Kingdom waters to observe the minimum safety standards laid down and imposed by the House. Such standards reduce the risk to our crews, particularly the lifeboat men who have to go out to rescue such vessels in difficult circumstances.
The Bill seeks to emphasise that the captain's prime responsibility is the safety of the vessel and its crew. The refusal of the captain of the "Union Star" to accept towing or assistance in gale conditions, with 40 ft waves, and with
150
no engines or steering power, bordered on the criminal. It reflects the growing pressure that is placed upon captains to put commercial judgments before the safety of their vessels and crews. The Bill would make it clear that the captain has that prime responsibility.
The Bill goes much further. It requires that the captain of a ship that is in difficulty and has no motive power shall be forced to accept a tow. The irony is that, under international law, if the "Union Star" had been carrying oil or a dangerous cargo the Coastguard would have had the power to force the skipper to accept a tow and thus the crew of the vessel, and possibly the lifeboatmen, would not have been lost.
It is deplorable that Parliaments and international law give a higher priority to property—the saving of our beaches—than to saving the lives of seafarers. Understandably our seafarers feel that the spilling of blood gets little more attention in the House than does oil and its effect on our beaches.
The circumstances of the lifeboat tragedy demand that a public inquiry be held and an investigation made into related matters. For example, why did a certificated engineer join the "Union Star" on her maiden voyage and leave halfway through the voyage, to be replaced by a man less competent to deal with engine problems? [Interruption.] I hope that hon. Gentlemen are not saying "Nonsense". No doubt a public inquiry would establish the facts.
It is essential to assess the capabilities of the Coastguard and the air-sea rescue services. The cuts that are being imposed on the Coastguard Service's manpower, its watchkeeping facilities and on its whole capability are causing considerable concern, not only in the maritime industry and in the service itself, at low and high levels of command, but in the coastal areas that are affected.
A maritime authority should be established to deal with the many difficult problems of safety at sea because, increasingly, individual departments are proving to be incapable of dealing with cases involving small vessels. Moreover, in inquiries the Department of Trade acts as both judge and jury. That is not a satisfactory situation, and it should be changed.
The Bill seeks to make public inquiries compulsory when vessels and crews are lost. It would reverse the trend of the last few years of fewer public inquiries into losses. This is evident from answers to questions, which show that whereas preliminary inquiries were held in one out of every four losses, the figure is now one in 12. We are not satisfied that the reduction of expenditure and coverage in this sphere increase safety.
Finally, the Bill seeks to correct the inadequate way in which public appeals arising from maritime tragedies are handled. Such uncertainty appear to maximise private anguish for the surviving dependants and undermine public confidence in appeals. Claims by some surviving widows and orphans from the same incident are denied due to terms of reference that are too narrowly drawn.
Yesterday, at the memorial service for the Penlee men, the Prime Minister said that there was little of a practical nature that she felt that she could do. The first practical step that she and her Government could take would be to make it clear to the appropriate Minister that a public inquiry into the loss of the Penlee lifeboat is essential.
Secondly, the Government could support the Bill. It is the least that should be done for the seafaring community, or that Parliament should expect to be done for the dead

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of the Penlee tragedy and for the seafarers who pursue a livelihood in one of the most dangerous of occupations. They do so in circumstances which are more dangerous than they need be, and which Parliament could improve by supporting the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Prescott, Mr. Roger Stott, Mr. Gerard Fitt, Mr. Stan Thorne and Mr. Leslie Spriggs.

MARITIME SAFETY
Mr. John Prescottaccordingly presented a Bill to increase the safety of maritime vessels and their crews in United Kingdom territorial waters; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 2 April and to be printed. [Bill 68.]

Rate Support Grant (England)
3.55 pm
The Secretary of State for the Environment (Mr. Michael Heseltine): I beg to move,
That the Rate Support Grant Report (England) 1982/83, a copy of which was laid before this House on 5th February, be approved.
Mr. Speaker: I think that it is in the interests of the House if this is discussed together with the other two motions on the Order Paper:
That the Rate Support Grant (Increase) Order 1982, a copy of which was laid before this House on 28th January, be approved.
That the Rate Support Grant Supplementary Report (England) 1982, a copy of which was laid before this House on 28th January, be approved.
Mr. Heseltine: As you say, Mr. Speaker, it may be for the convenience of the House if this report is taken with motions Nos. 1 and 2 on the Order Paper.
I seek approval today for three measures: the Rate Support Grant (Increase) Order 1982, the Rate Support Grant Supplementary Report (England) 1982 and the Rate Support Grant Report (England) 1982–83.
The rate support grant order is central to the public expenditure policies of the Government. Technically, it is the means by which central Government distribute taxpayers' money to help finance the spending programmes of local government. But the process of determining the order is based upon the expenditure plans for the individual programmes settled by the Government. That has always been the case. It now involves indicating how £11.5 billion is allocated for over 20 major public services to more than 400 authorities. It is necessary to allocate the taxpayers' support after taking into account the amount each of these authorities should reasonably be able to afford having regard to their rateable resources and other potential local revenue.
The rate support grant has inevitably been a complex and controversial programme affecting directly every local authority and every constituency in the country. It was difficult enough when, every year, there was an increase in expenditure and when the principal basis of distribution was the actual spending decisions of each authority. Over the past three years, I have had to challenge these assumptions of additional expenditure, and I have sought to distribute the taxpayers' support not on the basis of what each local authority decided to spend but upon independently measured criteria of need.
The Government came to office, as I explained to the House in this debate last year, after a generation in which local government manpower in Great Britain had doubled, reaching nearly 3 million—11.2 per cent. of the working population—in 1979. The inevitable effect of inexorably increasing manpower bills was a savage reduction in capital spending programmes. The previous Government cut local government capital and ended up by halving the levels of 1975 before they lost the general election.
It is against this background of spiralling, unearned consumption that the shift in direction that I have sought in local government has to be seen. To anyone who has the first idea of the strain of the present recession on industry and commerce, or who knows of the damage to investment and jobs caused by high rates, the targets I set were reasonable and obtainable.

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The simple fact is that between May 1979 and April 1982 I sought an overall reduction in the volume of local authority current spending of 5 to 6 per cent. That is under 2 per cent. a year.
There has been an uninterrupted flow of misleading threats as to the consequences that would follow. The carefully orchestrated headlines were contrived not to present views or inform the public; they were produced as part of deliberate campaigns to prevent any cuts at all. They are the familiar hallmark of assertive politics.
However, the results achieve by the great majority of local authorities now prove the reasonableness of my policies. Out of a total of 413 authorities, 279 are budgeting to spend within 2 per cent. of the reduced level. It is not any one class of authority. They represent 31 per cent. of shire counties, 69 per cent. of London boroughs, 47 per cent. of metropolitan districts and 77 per cent of shire districts. The onus is therefore on high spending authorities to prove why they cannot do what the majority are doing. It is no longer for me to prove that it is possible.
That is one part of what I mean by the beginnings of a change in direction. I shall return in a moment to the consequences of the behaviour of the minority of authorities that have decided to follow a different course.
Mr. Alfred Morris: Is the right hon. Gentleman aware of the statement by Mr. Peter Westland, under-secretary for social services of the Association of Metropolitan Authorities, that many local authorities can no longer meet their statutory duties under the Chronically Sick and Disabled Persons Act 1970, even to the very severely disabled? For example, Wandsworth is spending twice as much on its social services as the Secretary of State and his colleagues think it should be spending. Yet the borough is still reported to be unable to meet its statutory responsibilities towards disabled people. Is this situation not deeply disquieting to the Secretary of State and to the House?
Mr. Heseltine: I have not the slightest doubt that if any local authority in the country is failing in its statutory duty, someone will challenge the position of that authority. The right hon. Member for Manchester, Wythenshawe (Mr. Morris) is as aware as I am that the arrangement of priorities within each authority is a matter for that authority. We have made it clear that where the cuts should come is a matter for the individual authority's choice and discretion.
It is important for the right hon. Gentleman to square the statement that he has made, which doubtless is designed to present the cuts in the least favourable way, with the fact that 47 per cent. of metropolitan districts either have achieved or are very close to achieving my economies. The onus today is on those authorities which are not achieving or not attempting to achieve our policies to prove why it is no longer possible, because the majority of the authorities have proved that it is possible.
Another indicator of the change in direction is, of course, local authority manpower. The manpower bills of local government account for more than 70 per cent. of current spending and, as a result of pressures in the last three years, the graph which had risen so strongly year after year for 30 years has now turned downwards.
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Between June 1979 and September 1981 the manpower level in local government in England dropped by 4.1 per cent. For nine successive quarters the numbers have fallen.
Mr. Dennis SkinnerYes, to the dole queues.
Mr. Heseltine: The hon. Gentleman undoubtedly wants me to give way.
Mr. Skinner: The Minister is putting before the House figures which indicate that he is gloating because he has managed to get another few thousand people out of local government employment and into the dole queues. As for his figures being correct in terms of local authority expenditure, why should those in local government be terribly concerned about getting the figures to balance when this Government, of which he is a member, reached the end of the 1981 financial year having spent 60 per cent. more than they had originally calculated? The public sector borrowing requirement rose from £8, 500 million to £13, 500 million. Who is he to tell local authorities what to do?
Mr. Heseltine: The hon. Gentleman will want to make his own speech, but he is fully aware of the reason why I want to see lower levels of manpower in local government. It is because I want to help private industry, which has to pay the bills, to take on people, to invest and to enjoy a climate in which it can make the profits on which the prosperity of the hon. Gentleman's constituents depend.
For nine successive quarters, therefore, the numbers employed in local government have fallen. The latest figures show that in the 12 months to September 1981 the numbers employed in England dropped by about 42, 000 full-time equivalent—an annual rate of more than 2 per cent. In the last quarter alone, there was a 1 per cent. drop—an all-time record for a quarter.
I welcome and pay tribute to those local authorities which are now seeking to meet the Government's expenditure programmes. The fact that so many authorities are now showing that, with sensible manpower and recruitment policies, savings can be made, demonstrates once again the reasonable nature of what I have asked for. However, although the shift is happening, it is taking place late in the day. Unless the pace of the last quarter is maintained, it will still be below the level needed overall to maintain current spending targets.
Some authorities have made no effort. They have deliberately chosen to frustrate the Government's policies—policies often debated in and, of course, approved by the House. Instead of an overall reduction in real terms in current spending, we have a budgeted cash overspend of perhaps £1.3 billion this year. We have certainly stopped the upward spiral and rid ourselves of the inherited and unrealistic growth. The direction has changed, but, thanks to a minority of local authorities, it has not yet been reversed. I have decided, therefore, to confirm the withholding of £200 million from the 1980–81 rate support grant. It is for this reason that the first order for which approval is sought today provides only for an additional £84 million in grant. This increase is mainly for increased loan charges in that year. A full £200 million has been held back as the aggregate expenditure of local authorities in that year was 2½ per cent. above the volume target.

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There is one other matter related to the rate support grant for 1980–81. The House knows that last October the Divisional Court, while holding that I had exercised my discretion to abate the grant of six London authorities on valid considerations, quashed the decision on the ground that I had not been prepared to receive representations from the authorities concerned after November 1980. The court held that it was open to me, after considering representations, to reach any decision I considered right. Accordingly, I invited the authorities concerned to submit further representations, and this they have now done.
Having considered carefully the points they have made and taken into account all the factors drawn to my attention, I have decided to reduce the amount of grant payable in respect of 1980–81 to authorities whose adjusted uniform rate exceeded 155p and whose expenditure does not qualify for a waiver. To this extent, this decision is the same as that I announced last year. However, I have decided to modify the conditions for waivers. Authorities which did not gain a waiver on the basis that I announced last year will have their performance recalculated, using outturn figures and appropriate repricing factors, with urban programme expenditure excluded from the calculation. I have made these modifications in response to points made by the authorities themselves. The modifications may enable some of the affected authorities to achieve a waiver and gain exemption from grant abatement.
I do not yet know whether this will be the case. My Department will be asking authorities to provide the figures for making the relevant calculations and will also be writing to the authorities directly affected by the decision to explain it in more detail.
The second measure is the supplementary report for 1981–82. This provides an increased grant of £122 million, mainly to reflect higher loan charges. The report also uses new data to bring up to date the grant-related expenditure assessments—GREAs—of individual authorities. As the report explains, there is likely to be a further supplementary report for 1981–82.
The Local Government Finance Bill makes express provision for adjustment of grant entitlement to reflect the degree to which authorities have followed the Government's expenditure guidance. If enacted, authorities which in 1981–82 spend above their volume target and above their grant-related expenditure assessment could have a loss of grant. There is no reason for the taxpayer to support authorities which choose to ignore the guidelines which have been set. I have explained in detail how the abatement will work. The remedy was in the hands of the authorities concerned. I shall bring the report before the House as soon as practicable.
Turning now to the main report for 1982–83, we are dealing with the disbursement of £11.5 billion of grant, provided by the taxpayer, to more than 400 authorities.
I appreciate that the earlier I can announce decisions, the better for local government, but there is a balance to be struck between informed and early decisions. It was immensely to the gain of local government that, albeit rather later than I would have liked, we were able to provide a settlement which met local government at least half-way on some of its more difficult problems, even though many of those problems were of its own making.
I made my announcements on 2 and 21 December, as soon as possible after examining authorities' revised budgets for 1981–82, including the £1 billion increase over
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the White Paper provision. We made it clear in sending figures out on 21 December that we were going to alter the GREAs by substituting actual capital allocations. Of course, this happens every year, but usually later, in a supplementary report. This year we have done it earlier than usual to reduce the changes in GREA which would still have happened, but would have happened later.
I should refer here to the report of the Select Committee on Statutory Instruments which has suggested that the targets should have been included in the rate support grant report to Parliament. I have, of course, laid copies of the target figures in the Library of the House and they are available to any hon. Member. I did not include them in the report because, as the Committee points out. they have no direct statutory force. What will have statutory force is the grant abatement scheme. As I have assured the House, I shall bring full details of the abatement scheme before the House in a supplementary report before there is any question of its being implemented.
Our starting point for the total allowable expenditure was the overspend this year—an overspend which. as I have explained, stems largely from the refusal of a minority of authorities to adhere to the reasonable targets that I have set. Authorities in 1981–82 are planning; to spend about £17.5 billion. That includes the £1.3 billion cash overspend to which I have referred.
Mr. Bruce Douglas-Mann: To what extent was there an underspend of budgeted expenditure in previous years, and to what extent, therefore, is the planned overspend to which the right hon. Gentleman refers likely to be reached this year? Is that budgeted overspend likely to reflect local authorities' fear of the type of control that has been introduced in legislation to prohibit supplementary rates?
Mr. Heseltine: The overspend is not affected by the fear that there will be no supplementary rates. Only the rating provision, which is not on the same s of the income and expenditure account as the level of expenditure, may be affected, though I hope very much that that will not be the case.
As to the difference between outturn and budget, I do not have the precise figures, but I can give the hon. Gentleman the flavour of the position. In the years preceding the period for which I was responsible for local government there tended to be a 11/2 to 2 per cent. differential between budget and outturn, but that was always against the background of rising levels of expenditure and rising budgets. The indications for the past year or so are that there is not such a margin between budgets and the outturn, but this is a completely new situation for local authorities. They are having to reduce their expenditure and are therefore budgeting much more tightly than they did previously.
Mr. Douglas-Mann: Is the difference to which the right hon. Gentleman refers an underspend of budgeted expenditure rather that an overspend on past experience?
Mr. Heseltine: In the past five or six years there has always been an underspend on the budget by 1½ to 2 per cent., but the position is now changing. Our latest impression is that the budget and the outturn will come much closer than they did previously as expenditure expectations go down.
Mr. Anthony Beaumont-Dark: One of the nitty-gritty points is the grant-related

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expenditure assessment for the police, where the Government have been generous to London at everybody else's expense. London has been given about £60 million—an increase of 24 per cent.—Merseyside has been given about £300, 000—an increase of 0.8 per cent.—and the West Midlands has received £1.4 million—an increase of just 2.8 per cent. How does that square with our promise at the general election that we regarded police expenditure as the most important thing, because we wanted the police to be up to full strength? Is my right hon. Friend aware that the West Midlands police force is now up to full strength and must remain so?
If the Government rightly say that the police force must not be cut—indeed it must not, because we should not be forgiven if it were—what would be his answer to people who said that other expenditure would have to be cut by 37 per cent.? Incidentally, I agree that the Labour-controlled West Midlands is a difficult authority on expenditure. Are the figures as I have been told? Shall we receive a better grant than the paltry sum that I have described, which would have meant that we were paying for London's lawlessness?
Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I remind the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) that hon. Members must not make speeches in interventions.
Mr. Beaumont-Dark: It was a question, Mr. Deputy Speaker.
Mr. Heseltine: I know that my hon. Friend will bear with me. I intend to deal later in my speech with the point that he raised.
Before the interventions I had said that authorities were planning to spend about £17.5 billion in 1981–82, which implied the £1.3 billion cash overspend to which I had referred. But our original White Paper plans imply a total for 1982–83 of under £17 billion. To have stuck to the targets, and allowing for the overspend, I should have had to ask local government as a whole for a reduction in real terms of about 10 per cent. I decided against that.
Given the high percentage of manpower costs in local government current expenditure, there is a limit to any possible rundown in a given year on what can be achieved without redundancy payments that will actually put up the expenditure in that year. If I recognised that there was a point beyond which higher-spending authorities could not go, the only way to achieve the original target would have been to look to those authorities that were achieving my targets, or were close to achieving them, to make up for the failures of the rest. That would have been manifestly unfair. I therefore decided to protect the services in lower-spending authorities.
It would have been fair, given the notice that local government has been given, to base the RSG settlement for 1982–83 on the 10 per cent. reduction figure. But, following discussions with local government, I took the view that a reduction of 10 per cent. would be difficult to achieve in one year. I am therefore proposing an increase to £18 billion for the planned expenditure next year. That is a 2.8 per cent. cash increase over revised budgets for this year. It is over £1 billion more than the White Paper provision.
Our estimate is that, given the cash planning factors of 4 per cent. for pay and 9 per cent. for other costs, local
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government overall needs to make a 3.2 per cent. reduction in real terms from the level of this year's budgets. That is a tough, challenging, but realistic target for local government as a whole.
The next element in the settlement is the grant percentage. We have decided that, as a further means of keeping up pressure on the spending plans of local government, it is fair for a higher percentage of those plans to be financed at the local level, especially given my acceptance of a higher level of overall spend. For that reason, I have reduced the rate of grant from 59.1 per cent. to 56.1 per cent. In cash terms, that means that the Government will provide a total of £111/2; billion in 1982–83—an increase of over £1/2 billion in cash on last year's settlement.
There are three further aspects of the settlement to which I would draw attention. First, the settlement refines the methodology for setting targets. In the past, all local authorities have been asked to make the same volume reduction in settling an individual target. That has been criticised by many authorities. The choice of base years is said to be arbitrary, and equal volume reductions are said to make no distinction between those authorities that have tried to reduce spending in the past and those that have not.
I have always recognised that there is some validity in those criticisms, and I have now begun to move away from those base lines. The new targets are based on the lower of the original or revised budgets for 1981–82. The budgets are then adjusted to compare spending in 1981–82 with both the volume target and the GREAs. For authorities spending less than both those limits the targets are higher. For authorities that are overspending, the targets are lower.
To underline the equitable nature of the new targets, we have built in two constraints. First, no authority is being asked for more than a 7 per cent. reduction in real terms compared with the lower of its original or revised budget for 1981–82, although, of course, if an authority has increased budgeted expenditure during the year against the Government's policy it will be expected to make a larger reduction to offset that increase. For authorities spending less than their volume target and GREA the maximum real reduction will be 1 per cent.
The new targets are fair. They are based on up-to-date spending figures; they include comparison with GREAs; they benefit authorities that have succeeded in reducing spending. On the evidence of three years they are reasonable.
There are three main changes in GREAs for 1982–83. After discussion with the local authority associations we have made a number of changes to the housing assessment this year. We assume an average increase in rents of £2.50 a week. Where that increase results in a notional surplus on housing revenue account the GREA is not, as it was last year, to be a minus figure. It is being set at zero. No GREA is reduced this year by an assessed surplus on housing revenue account. Many district councils have an improved GREA as a result. In agreement with my right hon. Friends the Secretary of State for Education and Science and the Secretary of State for Social Services I have altered the GREAs for education and personal social services to include more weight for social and economic factors.
Of course, I understand that no authority feels that its GRE assessment is exactly right. We are continuing to work on improvements with the local authority

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associations. No single methodology could reflect the precise spending needs of over 400 different authorities, but the GRE system is the best available. Its overwhelming advantage is that we have opened up grant distribution to discussion and the public can now compare and contrast.
Mr. Christopher Price: I am sure that the right hon. Gentleman would agree that this is a very complicated subject and that even he has difficulty from time to time in comprehending it completely. He said that in agreement with his two right hon. Friends he had increased the social and economic elements in the GREA. By how much has he increased them? Is the increase significant enough for any inner city local authority to feel the difference, as it were?
Mr. Heseltine: Yes, it certainly is. That is one of the reasons why the shift of grant has taken place between various authorities in the distribution this year. I shall try to help the hon. Member and perhaps the House, because it is very important to understand how the system works.
When the public expenditure programmes have been set Department by Department. individual Departments then work out how the money should be allocated to the various authorities which administer the services. My task as Secretary of State for the Environment is to draw together, on the basis of the advice I get from the specialist Departments, the whole of the rate support grant settlement. Of course, policy decisions about the allocation of public expenditure ceilings are initiated by the various sponsoring Departments, although I have a coordinating role and am deeply involved in consulting those Departments. As I have said, the work is done in conjunction with the working groups in local government.
I also propose this year to abate grant for authorities which overspend their targets. I should make it clear that no authority spending below its GRE will suffer grant abatement. Only authorities spending above target and above GRE are affected; and, as my right hon. Friend announced earlier in the month, we will not change the grant abatement rules in mid-year. Authorities understand the methodology for grant abatement next year, and we have undertaken to amend clause 4 Local Government Finance (No. 2) Bill now in Committee to ensure that in future tha principles of grant abatement will be set out in the main report for the following financial year.
Those are the main components of the settlement. It is a realistic, fair and achievable package.
Mr. W. Benyon: Before my right hon. Friend leaves this complicated matter, can he give an assurance that the vexed question of rapid increases in population will be considered in time for next year's assessment?
Mr. Heseltine: I am grateful to my hon. Friend. I intend to deal with that point.
I apologise for detaining the House but there are many matters of great concern. The subject is complicated and I must go through these matters with care. Let me comment on specific aspects that I know have caused concern on both sides of the House. Providing expenditure targets are met, M expect the metropolitan areas outside London to retain broadly the same share of the grant total that they have received in recent years, that is, between 29 and 30 per cent. In London the loss of grant during 1981–82 far exceeded the partial reversal I had planned of
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the unjustifiable gain of £300 million grant from the shire areas which took place under the right hon. Member for Stepney and Poplar (Mr. Shore). That loss of grant was entirely as a result of overspending by London authorities.
For 1982–83 I am giving London the prospect of an improvement in its grant share' if expenditure targets are met. That is an opportunity for London, but the House will want to balance that against the considerable shift above what I anticipated that took place as a result of the high spending policies of London in the current year.
There is one change of policy incorporated in the report compared with the proposals issued in December. Those proposals provided for an increase in the proportion of rateable value of London authorities which is discounted in assessing grant entitlements. This change was to be effected by the setting of a multiplier in the same way as the special within London equalisation arrangements and the general safety net provisions. To some extent, these different multipliers interacted so that a minority of London authorities gained no benefit from the changed discount.
On further consideration, I have decided that this was not a fair arrangement and I have therefore recalculated the multipliers so that the benefit of the improved discount is applied as a final stage in the calculation, so allowing all London authorities to benefit equally. So that this change would not disadvantage authorities outside London, it has been necessary to increase slightly the aggregate Exchequer grant.
I shall deal more specifically with the inner city partnership authorities. The change which I have made in the method of assessing GRE to which I referred a few minutes ago to take more account of their particular problems has helped many of these authorities. but for some of them—Manchester, for example—problems remain from the years of unrestrained expenditure growth.
I have never made any secret of my view that more investment in our inner cities is essential, but we cannot make the room for increased capital investment until the stranglehold of ever-increasing current consumption is loosened.
This year I have been able to make a start on capital expenditure. On housing I have been able to announce a real growth in the gross provision for housing capital of 3 per cent. The inner city partnership and programme authorities have been given extra recognition in the distribution formula—as a result their share of the total HIPs will now be an all-time high of 34.6 per cent
I have announced the largest ever urban programme of £270 million. Resources for the partnership authorities will increase by 32 per cent. and for programme authorities by 21 per cent.
I have been urged to consider once again exempting the inner city authorities from having to include their urban programme expenditure when judging their performance against their expenditure targets. The targets for next year differ from earlier targets by being based on actual expenditure levels this year. They therefore largely reflect already existing patterns of spending on the urban programme. The case for an exemption is less clear cut, therefore.
I attach priority to continuing reductions in current expenditure in the inner cities. Nevertheless, I have shown my willingness to be flexible in considering representations from the inner city authorities where these are founded on genuine endeavours to respond to the need for

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economies, as I have shown by the decision I have today announced on the waivers on the transitional arrangements for 1980–81.
My hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) has asked about the police. I am aware that the metropolitan counties have been discussing with my right hon. Friend the Home Secretary the level of their police expenditure in the light of the expenditure targets that I have set. All of these authorities have been set tough targets. This reflects their existing high levels of expenditure. For three of the counties—Merseyside, West Midlands, and West Yorkshire—their decision to increase expenditure or revenue support for transport undertakings has increased their difficulties. I expect those authorities to make expenditure reduction based on their already high level of spending in relation to both this year's target and their GREs.
The authorities concerned must decide for themselves how to set about meeting their expenditure targets. I could not accept their contention, however, that reduction must inevitably fall equally on all services. No service is exempt from the search for economies, but, as the House knows, the Government attach priority to the law and order services and we have provided for this priority in our expenditure plans. The House will expect the metropolitan counties to recognise this priority and seek to find the bulk of the reductions required from those services where they know they are overspending most.
The position of police authorities outside London will be improved by the news today that the precept of the Metropolitan Police will be based on a budget approved by my right hon. Friend the Home Secretary. That provides for total expenditure in 1982–83 of £325 million. That figure is about £13 million lower than the estimate included for GRE purposes in the RSG report. An adjustment to the Metropolitan Police GRE will be made at an appropriate opportunity during the year. There will be modest consequential increases in the GRE figures for police authorities outside London at that time.
Let me say a word about the rural areas—the non-metropolitan areas. Under the Labour Government those parts of the country steadily lost their share of grant to London. It shrank from 57.3 per cent. in 1975–76 to 53.6 per cent. in 1980–81. Last year I took steps to correct that unjustified switch. The non-metropolitan share of grant rose to 55.4 per cent. after revised budgets. For 1982–83, the non-metropolitan share is likely to be about the same, although that will depend on the budget decisions of all authorities.
Some of the non-metropolitan counties are concerned about loss of grant through the close-ending adjustment that must take place later in the year. I have had representations from such authorities as Surrey and Hertfordshire on that point, but it now seems likely that the amount of close-ending reductions will be very small indeed in 1982–83. That is good news for those authorities. Other authorities, such as Essex and Buckinghamshire, have made the point that the statistical base is out of date.
Next year the census results will be coming on stream. We shall incorporate those figures next year. If there are authorities whose population growth was underestimated
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before the census, the new figures will be fairer to them. I hope that that answers the point made by my hon. Friend the Member for Buckingham (Mr. Benyon).
The House will be aware that the level of overall local government expenditure is primarily within the control of local government. We know that 70 per cent. of current costs go on manpower. The level of pay awards is in their hands. If staffing costs rise faster than allowed for, savings elsewhere must be found. In the private sector, employers cannot be insulated from excessive price increases. They must reduce costs, and the same must apply in local government. Instead of leading an inflationary cycle, I wish to see the local government sector leading an accelerated downward trend. The success—or otherwise—of that trend will be reflected in the rate bills of individual councils.
I have refused to set targets for levels of rate increases. I do not believe that that would be a helpful exercise. For example, last year in local government there was a range between an increase of 47 per cent. and a reduction of 3 per cent., so averages mean little. But every councillor now taking decisions has an essential role in the strategy for beating inflation. The decisions taken by local government affect every family's budget, but they also affect the industrial and domestic ratepayer. If councillors have not yet realised that their high rate policies are destroying the jobs and the investment in their areas, they have not listened to the clamour of indignation now coming from those who must earn the wealth that some councils are so freely prepared to spend. There is no question but that they want councillors to keep spending within the set limits. They wish councillors to make savings where they can and they want greater efficiency.
I wish to pay tribute to my hon. Friend the Member for Peterborough (Dr. Mawhinney), who is to be congratulated on the way in which he has persuaded his local Labour council and his local industrialists to work together in looking for economy and efficiency. I wish that we saw far more of such common sense of community. It is in stark contrast to Labour Party spokesmen, who lose no opportunity to encourage and support high rate policies.
Mr. Tony Durant: In view of what my right hon. Friend has just said and his earlier remarks about aid to the shire counties being in sharp contrast with what happened under the Labour Government, would it not be wrong for a local authority such as Berkshire to increase its rates by 371/2 per cent., which seems to me astronomical and unfair to industry?
Mr. Heseltine: I support my hon. Friend, who I know has expressed those views trenchantly locally. It is to be regretted that, when jobs are being lost and investment cut and the wealth-producing sector of the economy is severely strained, local authorities do not bear their fair share of the responsibility to try to contain expenditure.
There has never been—I support the efforts that many of my colleagues are making locally in support of the matter—a greater opportunity for industry and commerce to bring their management expertise and experience to support local government in its search for economies. Perhaps it is not sufficiently recognised that, as a result of what the Government are doing, there has never been so much published information to help those who seek economies to effect them.
Each local authority now should be publishing, service by service, its quarterly manpower figures. Each planning

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authority should be publishing the time that it takes to deal with planning applications. By April there should be registers of unused or underused land of over an acre in size, owned by the public sector in each district authority. The housing authorities should be publishing the cost and value of their capital housing projects. The Chartered Institute of Public Finance and Accountancy—the organisation of local government treasurers—now publishes detailed comparisons of the cost of services provided by each authority. They include actual expenditure figures for 1979–80. In the pressure of recession and the search for economy, there are endless questions to be asked and the information from which to ask them is or should be publicly available.
I shall give an example of some of the questions to be asked. It is perhaps for the right hon. Member for Manchester. Ardwick (Mr. Kaufman) to provide the answers. In Camden, the net annual cost of all services for every 1, 000 people is £370, 000. In Lambeth it is £285, 000. In Wandsworth it is £200, 000. Why does it cost 85 per cent. more in Camden than in Wandsworth?
In the London borough of Haringey, it costs £619 a year for every primary school child. In Barking and Dagenham—also Labour—controlled London boroughs—the cost per child is £504. That is a difference of 21.8 per cent. But, it could be argued, surely Barking must have a vastly inferior pupil-teacher ratio. That is not what the CIPFA statistics show. It is 20 in Haringey and, similarly, 21.7 in the much less expensive Barking
I have taken those figures almost at random from the first dozen pages of the CIPFA statistical comparison. It is an invaluable source for every inquiring ratepayer. Why does it cost £2, 859 per 1, 000 population for planning in Tyne and Wear county and only £767 in the West Midlands? That is a difference of over 300 per cent. Perhaps the ratepayers in Tyne and Wear deserve an explanation.
I was interested to see that in Sheffield this month the Labour-controlled council decided to increase the rates by 20 per cent. for domestic ratepayers, and 18 per cent. for industrial ratepayers. Yet only in November a local Engineering Employers Federation survey produced a report showing lost jobs and the cancellation or postponement of £1.5 million of investment as a result of last year's 40 per cent. increase. I was startled to read that the chairman of the budget committee is alleged to have said:
"I think we are now running a very tight ship."
That was after a 40 per cent. rate rise followed by a 20 per cent. rate rise in a city where the net cost of services per 1, 000 population is 9 per cent. higher than in neighbouring Rotherham and where the cost of refuse collection is 20 per cent. higher than in Doncaster, in the same county area. It costs £649 to educate a secondary pupil in Sheffield and £573 to educate the same pupil in Bolton—a town that I chose because the pupil-teacher ratio is the same.
I cannot know the answers to those questions. They are matters for each authority. But I know that it is right that local people should have the information for an informed public debate and for the wider protection of the ratepayer.
There is a wider lesson to be drawn. This settlement is about responsibility. We now have a system that brings home more clearly than ever before the responsibility of the individual councils for their actions. It is a responsibility that is more visible than ever before. I began
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by talking about a shift in direction. Over the next 12 months it is my belief that that shift will accelerate. That is my objective, and that is what I shall continue to work for.
4.40 pm
Mr. Gerald Kaufman: Listening to the Secretary of State is somewhat like watching the dance of the seven veils. As he peels off each layer we feel that this time, surely, at the conclusion of the performance the truth will be revealed. But when the seventh veil has been discarded we find that all that has been disclosed to us are seven more veils. The right hon. Gentleman may not be good at much, but he is certainly an expert at concealing the truth.
The rate support grant settlement is a prime specimen of his art. After a 45 minute speech by the right hon.Gentleman purporting to explain it, we know, on the whole, rather less than when he rose to address the House. We know that he has reduced the level of grant from 59.1 per cent. to 56.1 per cent., but he gave us no idea what this means in real money. By insisting on comparing the cash award, made last year in last year's prices, with the cash award made this year in this year's prices, the Secretary of State seeks to give the impression that the value of the grant settlement has risen. This is far from the case. Any attempt to obtain a true comparison on a constant price basis has been met with the response that these figures are best presented in cash terms.
On the other hand, local authorities are required to work out on a constant price basis how much they are to cut this year's budgets to conform to next year's targets. The Secretary of State has refused to tell us how much he is cutting their grant on the same constant price basis. Therefore, I wrote to the Prime Minister asking whether she could help and I received the following explanation:
"In some circumstances it may be meaningful to compare expenditure on a constant price basis but it is more difficult to revalue the financing item. It is particularly difficult to make meaningful comparisons involving future years, where the mix of expenditure which the grant will finance is necessarily uncertain.
There are special reasons for using constant prices in constructing the expenditure targets for 1982–83 … This was done so the impact on the target policy could be contained within achievable limits."
Book tokens are offered for the first three correct explanations opened.
As Ministers will not publish the calculations that they have certainly made—[HON. MEMBERS: "What is the correct answer?"] I am about to say that the Minister has the information but will not give it.
As Ministers will not publish the calculations that they have certainly made within their Department and which the Treasury also has, I will assist by publishing them. In constant prices, the Secretary of State has reduced the block grant for the coming year by £827 million, a reduction of 8.7 per cent. Worst hit of all are the partnership and programme authorities, the inner cities, for whom the Prime Minister has just demonstrated her compassion by appointing the Under-Secretary of State for the Environment, the hon. Member for Ealing, Acton (Sir G. Young) to look after them. He is not so much an overlord as a mini-Minister.
The inner city share of the rate support grant has fallen drastically since the Government came to office. One would never guess that from the passage in the Secretary

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of State's speech today. Compared with Labour's last year in office the share of rate support grant going to the inner cities has fallen from 23.5 per cent. to 18.6 per cent. of the total. This year they will be losing £154 million in block grant alone. The Secretary of State is also reducing housing subsidy by £427 million. That means that the local authorities will have to find another £1¼ billion out of rate revenue simply to maintain services and employment at present levels. Even if local authorities make massive cuts, the reduction in the rate support grant will still mean greatly increased rates and precepts.
This is quite apart from the Government's insistence that local authorities should calculate their budgets on an assumption of pay settlements of 4 per cent. when all settlements to date have been well above that level, and on a 9 per cent. inflation rate, when it has just been confirmed that inflation is running at a consistent 12 per cent. So rates will go up substantially, directly as a result of this rate support grant settlement.
When he announced the settlement, the Secretary of State claimed:
"Provided that local government seeks to match our target expenditure levels, rate increases generally will be low next year."
Three areas, East Sussex, Essex and Wiltshire, all less than 3 per cent. above the penalty level, are having to raise their precepts by, respectively, 13.8 per cent., 14.9 per cent. and 13.9 per cent.
My hon. Friend the Member for Harlow (Mr. Newens) referred, at Prime Minister's questions today, to the plight of Essex. Essex has now sent a telegram to its Members of Parliament complaining that its representations to the Secretary of State have been ignored. It is true that the rate support grant settlement includes a safety net to protect local authorities in danger of suffering an excessive grant loss.
Mr. Stanley Newens: Before my right hon. Friend leaves the question of Essex, is he aware that the Secretary of State and his colleagues have confirmed that Essex is one of the most efficient and prudent authorities? It has still suffered the heavy cut to which my right hon. Friend is referring. Surely that shows that there is no reward for pursuing the economic policies that the Secretary of State advocates?
Mr. Kaufman: As I shall seek to demonstrate to the House, it is a sad fact that the more prudent a local authority, the more likely is the Secretary of State to punish rather than reward it.
It is true that the Government tell us that the safety net to protect local authorities in danger of suffering an excessive grant loss has been increased. The Government tell us that the safety net this year will be brought into operation when an authority suffers a grant loss of 5p in terms of rate poundage, compared to 13p last year. That is a great improvement and we should be thoroughly grateful for it, except—I am afraid that with this Secretary of State there is always an "except"—that the safety net is based not on what the local authority will actually be spending but on what the Department of the Environment says that it should be spending.
In the overwhelming majority of cases that will be the lesser of the two. Therefore, in the "through the looking glass world" in which local authorities are being required
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to budget, the Secretary of State may deem a council to be gaining grant when it is losing grant. Even though the safety net has been raised, many local authorities will jump, expecting this protection, but will find that they go right through one of the holes in it.
Local authorities are also being denied grant because of a shortcoming in compiling grant-related expenditure or simply because of mistakes by the computer at the Department of Environment—rather, the two computer systems, which keep a watchful eye on each other but sometimes succeed in doubling the mistakes. Some of the work has been done on computers in Cleveland, Ohio and Rockville, Connecticut. It may be that the calculations were made in United States dollars. That would be as rational an explanation as I have heard for what has taken place.
Be that as it may, the results are very serious. The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) raised the question of the impact on the police of what the Secretary of State is doing and the reply by the Secretary of State was grievously inadequate for those concerned about the matter. My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), in his intervention referred to the inability of local authorities to meet their legal duties under the Chronically Sick and Disabled Persons Act. For example, in Liverpool nearly 400 severely disabled people have been put on an indefinite waiting list for telephones, which social services Ministers have said is illegal. Liverpool's defence is that that has been caused by the Secretary of State's cuts. Councillor Anthony Mogford, the chairman of the policy committee of Buckinghamshire county council, claims that his council's loss of £12.5 million in rate support grant for 1982–83 is due to the failure of the system to take account of the recent population growth. When the Secretary of State purported to reply to a question from the hon. Member for Buckingham (Mr. Benyon), he offered no immediate comfort for that county.
My hon. Friend the Member for Rother Valley (Mr. Hardy) told me that Rotherham, which was an underspender last year, will suffer a loss in grant of at least 8 per cent. in 1982–83, purely because of the Government's artificially low assumption for inflation. Yet the Secretary of State had the nerve today to pay Rotherham a compliment. Birmingham had its grant-related expenditure assessment reduced between 21 December 1981 and 25 January 1982 by £l.l million, which could mean a loss of grant of £2.3 million. The Minister for Local Government and Environmental Services, in a letter to the leader of Birmingham city council, offered the following explanation:
"the reason for the change lies in the correction of an error in the information we use to make an assessment of the component of GRE in relation to land drainage".
The fate of jobs and services depends on such nonsenses.
The most extreme example is that of Thurrock in Essex. That bewildered local authority finds that, at a stroke, it will lose every penny of its grant in the forthcoming financial year. That is largely because its rate support grant allowance for housing revenue account deficit has been wiped out. That is a manifestation of the Secretary of State's gratitude to Thurrock for doing what he asked, and raising rents by the level that he laid down. Thurrock's grant loss will bring about a rates increase of 40 per cent. That council is the victim of the Department of the Environment failing to understand its own methodology.

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No doubt the Secretary of State will take an early opportunity to denounce the high spending policies of Thurrock borough council.
Raising rents is not the only Government policy that councils are being punished for obeying. Authorities will also lose grant as a result of the additional income they obtain from selling council houses. In addition, the greater the number of council houses they sell, the more grant they will lose. They are also punished because the Secretary of State will not let them build new houses to replace those that he is forcing them to sell. Under the GRE assessment house starts indicator, grant entitlement is chalked up on the basis of the number of new houses begun in an area. Yet the Government's housing policy is drastically reducing the number of new starts year by year. Far from increasing the housing investment allocation programme, as the Secretary of State claimed this afternoon, he has cut it by 4 per cent., which is based on a phoney 8.9 per cent. inflation rate. On the proper inflation rate, the cut in housing investment is far greater, and local authorities will be penalised for that by reduced rate support grant.
There are other curiosities in the way that the mysterious GRE assessments are compiled. For example, grants for concessionary fares for the elderly are based not on the number of elderly who may benefit, but on the number who live in an area. Therefore, an area that deprives its elderly of cheap transport is rewarded by the Secretary of State. Not only do local authorities gain or lose almost at random on the basis of their allotted GRE assessments, they suffer from a new refinement in the calculation of their grant-related poundage. Hon. Members will recall that the key element in the calculation of a local authority's block grant is its grant-related poundage. In the rate support grant report, every class of authority is allocated a GRP. That is multiplied by the rateable value for the area, and the product of that calculation is subject to the multiplier allocated individually to each council. The result of that calculation is deducted from the local authority's total expenditure, and what remains is the block grant.
One element in the GRP is the tariff, otherwise known as the slope. For each additional £10 per head of expenditure below the threshold above its GREA, a local authority is required to raise an additional sum in rates. Last year the tariff was 5.6p. This year the Secretary of State has steepened the slope by increasing it to 6p. That may not sound a great deal, but it is a 7 per cent. increase. That penalty is imposed on local authorities even when they are spending below what the Secretary of State tells them they need to spend to provide the services that their area requires. Of course, that penalty increases even more when they spend above the threshold and the taper comes into operation.
But those penalties are as nothing compared with the punishment that the Secretary of State is imposing on local authorities that are spending above his expenditure targets. This is where Sherlock Holmes appears on the scene. Students of Conan Doyle will remember the exchange of dialogue between Holmes and Dr. Watson in the story "Silver Blaze". The detective refers to
"the curious incident of the dog in the nighttime."
Watson comments:
"The dog did nothing in the nighttime."
Holmes remarks:
"That was the curious incident."
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We are debating one rate support grant order, one rate support grant report and one rate support grant supplementary report. In addition to the one supplementary report, which makes certain non-controversial changes following last year's main report, we should be debating another supplementary report to impose the penalties threatened by the Secretary of State when he was conducting his holdback operation last summer—the exercise in which, last June, he ordered local authorities to cut their budgets by 5.6 per cent. below their expenditure for the financial year 1978–79.
At that time, the right hon. Gentleman warned that councils that failed to make the demanded cuts by the end of July would be visited by the most stringent punishment in the form of reduced grant, called "holdback" in the Secretary of State's quaint but sinister phraseology. One hundred and seventy five local authorities failed to do as they were told. The Secretary of State let off 61 of them with a caution, having discovered the irrelevant but extenuating circumstance that they were budgeting below their GRE assessment, even though they were still spending above their target by an aggregate of more than £70 million. That left 114 authorities cowering under the expected lash of the Secretary of State's holdback penalties. But the lash has not fallen—the grant has not been docked. The dog has done nothing in the night time.
There is a simple reason for that, but we would never guess it from the way in which the Secretary of State glossed over the matter in his speech. He has discovered that that holdback operation—targets, penalties and all—is illegal. As he reminded us today, he has already been taken to court once by local authorities from which he withheld grants unlawfully. We shall have to study carefully the text of his belated announcement today. It is clear that he is afraid to risk being labelled a wrongdoer by another set of judges.
The game is given away in paragraph 9 of the main rate support grant report that we are debating today. It says:
"Clause 4 of the Local Government Finance (No. 2) Bill currently before Parliament is intended to clarify the powers under which such a scheme could be operated."
What a nice word "clarify" is! In the dictionary of Heseltinese the definition of "clarify" is "retrospectively make lawful that which was unlawful". Clause 4 of the Local Government Finance (No. 2) Bill, row in Committee, seeks to achieve that clarification by legalising retrospectively both the illegal targets that the Secretary of State set and the illegal penalties that he threatened. The Minister for Local Government and Environmental Services confessed that until the local Government Finance (No. 2) Bill is passed, it will not be proper for the Government to impose the penalties.
So there we have it. The Secretary of State, who lectures local authorities about the need to conduct themselves lawfully, has been conducting himself unlawfully ever since last June. If he were not a Minister of the Crown with an obedient majority ready to bail him out, he would by now be helping the police with their inquiries.
However, the Secretary of State's lack of legal authority to penalise those whom he has categorised as overspenders saved him from some embarrassment last weekend. Two days ago, the Secretary of State made again his now familiar speech about his determination to reduce local authority spending. He said:
"I am unrepentant about the need for economies."

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He made his speech at the Young Conservatives' annual conference. The conference was held in Harrogate. Under the Secretary of State's holdback exercise, Conservative-controlled Harrogate emerged as the second worst overspender of all England's 411 local authorities. The reason why Harrogate has so blatantly contravened the Secretary of State's edicts is that it has been spending vast amounts of ratepayers' money on a grandiose new conference centre. The Secretary of State made his speech attacking local authority extravagance in that same grandiose conference centre, which has turned Harrogate into the second most extravagant local authority in England.
Indeed, the Young Conservative conference was the first major event in that conference centre. There is only one reason why the Secretary of State has not yet fined Harrogate £313, 000 in grant holdback for building the conference centre in which he denounced such extravagance as building the conference centre in which he was delivering his denunciation. The reason is that the penalty is still illegal, and will remain so until Parliament retrospectively legalises it.
The Secretary of State has now changed the whole basis on which he calculated the targets by which overspending will be judged for the forthcoming financial year. During the Second Reading of the Local Government Finance (No. 2) Bill, I mentioned the methods by which the new targets were assessed. Some brows were furrowed when I said that the final stage in the construction of the targets involves the iterative process. So hon. Members will be relieved to learn that in a handy guide just issued, the Association of Metropolitan Authorities has provided a definition of that iterative process, namely,
"required to he calculated over and over again until the right answer appears."
The targets are so sweeping that they indict 365 of the 411 English local authorities as overspenders. That iterative process, far from being fair, as the Secretary of State claimed this afternoon, has led to some serious anomalies, one of them resulting from the rule that no local authority is required to make cuts of more than 7 per cent. from this year's budget. I hasten to add that those anomalies do not affect Harrogate. Just as it is a maximum overspender in the current financial year, so it would be a maximum overspender in the new financial year. That conference centre is an expensive item.
Other authorities are even less lucky than Harrogate. On the other hand, certain councils are much luckier. Let us take Portsmouth and Northamptonshire. In last year's drive for economies, Portsmouth did everything for which the Secretary of State could hope. Obeying his legal instructions, it cut its budget by £669, 000. Those cuts turned Portsmouth into the apple of the Secretary of State's eye—an underspender. However, under his idiosyncratic system of rewards and penalties, he recompensed Portsmouth for its frugality by reducing its rate support grant by £333, 000. That is bad enough, but worse is to come. This year, on precisely the same budget that last year made it an underspender, Portsmouth becomes a maximum overspender. It is being made to cut its budget by the 7 per cent. maximum to avoid penalty. The final turn of the screw is that if Portsmouth had not cut its budget last year in response to the Secretary of State's illegal demands, it would now be called upon to cut 7 per
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cent. only from its original, higher budget, rather than from its reduced budget. So Portsmouth loses four ways: it made cuts last year; it was penalised for doing so; it is being ordered to make maximum cuts this year; and its required cuts are higher as a direct result of the cuts that it made last year.
Letus contrast Portsmouth's agony with Northamptonshire's good fortune. Last year, Northamptonshire completely ignored the Secretary of State's call for cuts. Instead, it increased its budget by £5, 705, 000. The Secretary of State responded smartly by increasing Northamptonshire's grant by £3, 810, 000. This year, it is true that Northamptonshire is an overspender and is due to be penalised—but by only 3.8 per cent. That is half the penalty hanging over virtuous Portsmouth.
Anomalies of that kind can be repeated all over the country. They stem from a series of absurdities—the absurdity of the system by which last year's grant was awarded; the absurdity of last year's illegal spending targets; the absurdity of last year's illegal penalties; the absurdity governing the award of this year's block grant; and the crowning absurdity of this year's penalties.
Sir Julian Ridsdale(Harwich)rose——
Mr. Kaufman: I hope that the hon. Gentleman will forgive me for not giving way, because I am coming to the end of my remarks. The Secretary of State took so long that I want to make a short speech, by comparison.
It is no wonder that the Secretary of State is tired of the whole wretched business. It is no wonder that he is desperate to reform the whole rating system. This week, The Sunday Times revealed details of the top secret, almost occult, Cabinet meeting that was held a fortnight ago to discuss the rates—a meeting that was so secret that only several journalists obtained full details of it. It turns out that the Secretary of State has been compelled by the Prime Minister to bring before the House policies in which he does not believe. As The Sunday Times put it:
"When he was looking for ways to tame spendthrift local authorities last year, one method he rejected was the local referendum. Yet over his strong objections, that is the method the cabinet chose. He was therefore saddled with defending a policy he thought both wrong and unpopular … Later, Conservative MPs proved his judgment right by forcing the government to withdraw its referendum proposal."
Not only do we disagree with what the Secretary of State is doing, but the Secretary of State himself disagrees with what the Secretary of State is doing.
Mr. Ted Graham: Have a referendum.
Mr. Kaufman: The trouble is that there was a referendum in the Cabinet and the Secretary of State lost. If we defeat the Secretary of State in the vote tonight, by imposing on him what appears to be a public humiliation, we shall provide him with a private triumph. Therefore, I not only invite the Secretary of State's sadly numerous enemies, but also whatever friends he may have, to join us in the Lobby tonight to throw out this wretched, illogical, unfair and mean-minded rate support grant settlement.
5.11 pm
Mr. Mark Carlisle: It would be churlish to pretend that one had not enjoyed some of the wit and amusement of the right hon. Member for Manchester, Ardwick (Mr. K aufman). He rightly pointed out—if he is right in the figures that he gave—many of the apparent anomalies in the rate support grant. I am bound to say,

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however, that over the past 14 years, many similar speeches have been made by Opposition Members in debates on the rate support grant, pointing out various anomalies in division of the money.
Although the right hon. Member for Ardwick is not normally given to generosity towards Conservative Members, he may agree that the real point thrown up by his wit and humour is the genuine complexity of the rate support grant. The rate support grant is understood by my right hon. Friend the Secretary of State and by my right hon. Friend the Minister for Local Government and Environmental Services, but it is otherwise understood by only one official in the Department of the Environment, one official in the Department of Education and Science and by the Department of the Environment's computer. However, as we heard, there is a certain doubt about the computer.
This is the first time that I have addressed the House in a general debate since being dropped from the Government last summer. I am grateful to you, Mr. Deputy Speaker, for calling me. In a debate on the rate support grant and local authority expenditure, it is important to remember that a high proportion of that expenditure goes on education. Any debate, therefore, on the funding of local authorities, or on the level of the rate support grant that goes towards the funding of local authority expenditure is bound to have an important effect on education throughout the country. I am not talking only about education in schools. It is worth remembering that local authorities are responsible not only for the education of those of compulsory school age, but also for the education of children under five, of those between the ages of 16 and 18 who wish to stay in full-time education, and for the whole of higher and further education, with the exception of the university sector.
As I said, the rate support grant is a complicated piece of machinery. I do not want to become involved in its complexities now, or in arguments about the effect of any particular grant on an area. I should like to make what I believe are, if over-simplistic, at least straightforward points concerning our approach to the debate.The first point is self-evident and was highlighted in the speech of my right hon. Friend the Secretary of State. In a period of recession, rate increases are placing a heavier and heavier burden both on individuals and on industry and many people are becoming greatly concerned. It is worth remembering that when debating the rate support grant we are debating one quarter of all public expenditure. The types of rate increases that we have seen in recent years—and those that some incoming Labour-controlled county councils have imposed in the past 12 months—are making a substantial impact on the viability of many small industries and businesses and, thereby, on unemployment.
More than half the rate-borne part of expenditure is paid not by the domestic ratepayer but by local industry. That is probably the most classic case of taxation without representation. If we tax or rate small businesses in a way that prevents them from expanding or, in some cases, drives them out of business, we shall increase and aggravate our unemployment problems. The Government must have an overall view about the use of the country's resources. They must take responsibility for the macro economic decisions. I totally support my right hon. Friend and the Government. They are wholly right in doing all in their power to restrain the level of local authority
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expenditure. However, I am sure that my right hon. Friend will agree that expenditure must be commensurate with the provision of adequate services.
My right hon. Friend is right to do all that he can to attack individual spendthrift councils. The Government's critics say not that his attacks have been too successful, but that they may not have been successful enough. Therefore, I am in accord with the basic principle behind the Government's approach. I do not believe—as some members of the public might argue—that education can be excluded from any savings to be made in local authority expenditure. By its very volume, expenditure on education must be part of any attempt to constrain local authority spending. It takes up four times the amount of any other local authority service. At £9, 190 million in the coming year, expenditure on education represents more than half of all local authority current expenditure. It represents about 70 per cent. of the total expenditure of those authorities that are local education authorities.
Of course, it is vital that the country should provide the best education service possible at school, pre-school and post-school age. However, we all know that ultimately the standard of education is not entirely related to expenditure. Other matters must be taken into account. As I have said before, those who criticise the Government for their efforts to restrain such expenditure do not benefit today's schoolchildren, because if we spend more than we can afford on education we may leave them to face even greater economic problems in the future.
Therefore, I believe that it was right to examine education expenditure as we have over the past two and a half years. I ask those who criticise what the Government have been trying to achieve to have a sense of proportion. It is right that we have reduced public expenditure on education. We were aiming to spend 31/2 per cent. less in 1981–82 than in 1978–79, for a further fall of 1 per cent. in the coming year and 6½ per cent. less in 1983–84.
We must remember that those figures are being aimed at and largely achieved against a fall in the number of pupils which is substantially greater. That fall is 7 per cent. from the date of the Government's coming to office to the present day and it will be 13 per cent. by the end of 1984. That means that, despite the genuine savings that have been made, we have today a higher pupil-teacher ratio, and are likely to continue to have one when the 1982 figures are available, than we have ever had before. It is certainly considerably better than it was in 1978 and 1979.
Planning for a reduction is always difficult. l realise that there are diseconomies of scale that are bound to affect the savings made. I support the comment of my right hon. Friend the Secretary of State that the targets that had been set to local government in this area, although tough, were attainable. It would be impossible to go further than we have and I would resist any attempt to make further savings in education.
How successful have we been in making those reductions? Again, it is worth pointing out that, compared with local authority expenditure as a whole, education authorities have been considerably more successful in achieving the reduced expenditure targets than other areas of local authority expenditure. If one examines the outfall for 1980–81, one sees that, apart from an increase in overspend on school meals, the outfall for the rest of education expenditure was equivalent to the relevant expenditure. I dare to predict that for 1981–82 the outcome

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overall will show again that the expenditure is roughly equivalent to that which was allowed for in relevant expenditure.
About 80 to 85 per cent. of the reduction in local authority manpower has been achieved by local education authorities, largely in non-teaching costs. If one could convey to local authorities the need to examine some of their other services, particularly local administrative services, and if they compared that with the way some local education authorities have examined their expenditure, which is a highly politically sensitive area, they would find it easier to achieve many of the targets set by my right hon. Friend.
Therefore, faced by the overspend, my right hon. Friend is right to say that he is carrying through his threat to withhold grant for 1980–81, because he has no alternative. At the moment, it is the only method he has for controlling the total resources that may be used. It is the only method he has for bringing to the notice of local ratepayers the effects of the extravagance of individual local authorities. He is right to make it clear that he intends to withhold grant in 1981–82 from the individual authorities that continue to overspend.
While I take the point of the right hon. Member for Ardwick about the Local Government Finance (No. 2) Bill, I should have thought that it was a substantial step forward that my right hon. Friend and the Government were putting on the statute book legislation that allowed them to pursue an overspending individual authority rather than having to suffer the sins of the few at the cost of the many.
My right hon. Friend the Secretary of State must be clear what is meant by overspending. I do not believe that we can simply look at historical levels and say that every authority—I shall take some figures used by my right hon. Friend—that has not spent 5.6 per cent. below its 1978–79 expenditure is, ex hypothesi, an overspender. As he will agree, that is not so.
In many aspects of local authority expenditure the overall responsibility of a Government is primarily financial and they aim to keep down local authority expenditure. However, with regard to education expenditure, the Government are bound to have an interest not only in the level of expenditure and the cost of the service but in the standard of the service that is provided.
Largely thanks to the energy of my right hon. Friend, today we have a system of assessing the needs of local authorities which is far more sophisticated than past systems, and the level of grant-related expenditure of each authority. I know that the system is not perfect. No system is perfect. I am sure that an amusing and witty speech could be made by the right hon. Member for Ardwick pointing out the fallacies and individual problems of grant-related expenditure.
In the end grant-related expenditure is based on calculations that contain a series of ingredients that have largely been accepted by the Association of Metropolitan Authorities and the Association of County Councils as taking account of the needs of spending in an area. In education, I can say without fear of contradiction that those ingredients were set not by the Department of the Environment but by the Department of Education and Science. I was glad to hear my right hon. Friend say that
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some changes had been made this year which I know were being looked at in conjuction with the other partners—the AMA and the ACC.
As we have grant-related expenditure, and as grant-related expenditure is not the same as historic levels of expenditure, it is nonsense to suggest that authorities that may not be spending 5.6 per cent. below the 1978–79 level, yet are spending at or below the level of grant-related expenditure, are overspenders, whereas those that have achieved the 5.6 per cent. target are not overspenders, even if they are still well above the level of grant-related expenditure. That appeared to apply to many shire counties. That is why I welcome the statement made by my right hon. Friend in the latter part of last year, reaffirmed in the Rate Support Grant Supplementary Report (England) 1982, that those authorities whose expenditure is below the GRE should be exempt from penalties, even if expenditure is above the 5.6 per cent. figure.
I should have thought that the quicker we broke away from the system of judging local authorities on historic expenditure lines as a means of assessing Government help, the better. The sooner we move over to a system of relating that help to grant-related expenditure based on an assessment of needs the better. The block grant provisions in the Local Government Finance (No. 2) Bill allow us to work in that way.
To some extent, there will always be a clash, which GRE will avoid, between the overall view of the Government, who are concerned with the general level of expenditure of local authorities, and a particular view of a Department such as the Department of Education and Science, which, because of the nature and importance of education, is bound to be concerned about the standard of that service.
Will my right hon. Friend the Minister for Local Government and Environmental Services explain—I do not doubt the efforts of my right hon. Friend to do so—the relationship between target levels of expenditure and GRE for 1982–83? I understand that they are different. I am glad that the right hon. Member for Ardwick signifies his agreement with me on that. I think that my right hon. Friend said that before a penalty was exacted local authorities would have to fail on both levels—target and GRE. That is important.
Having made what I hope my right hon. Friend will feel are many remarks supportive of the proposals, I must continue by expressing my anxiety about the Government's intention to reduce the RSG from 59.1 per cent. to 56.1 per cent. this year. I believe that the reduction is likely to have a grave impact on rates, given the public nature of many local authority services although I fully understand the reasons behind the thinking of my right hon. Friend and his Cabinet colleagues in coming to that decision.
I realise that at the back of my right hon. Friend's thinking must be the thought that if local authorities are made responsible for a higher proportion of the money which they spend they will be more accountable and will be forced to be more careful with the money they spend. In other words, the effect will be a squeeze upon them. I thought that the right hon. Member for Ardwick was a little unkind to imply that my right hon. Friend had misled the House with the figures that he gave today. When the right hon. Gentleman gave his figures for the cash reduction in RSG for the coming year, I thought that that

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was the total of the reduction from 59.1 per cent. to 56.1 per cent. and the reduction in volume to which my right hon. Friend had referred. The right hon. Gentleman assisted the House with mathematics rather than revealed any deliberate attempt to evade responsibility for the figures which emerged.
The only way to consider the Government's proposed reduction from 59.1 per cent. to 56.1 per cent. is to see it, as I am sure is the intention, as a further restraining influence. I remind my right hon. Friend and the House that there are already two squeezes working on local authorities. The first, which I welcome, is the volume reduction in expenditure which the Government are attempting to achieve. The second is the tough approach to inflation assumptions in the coming rate support grant. I agree with what the Government have done. They are absolutely right to make an assumption on pay which is hard of achievement. Those who maintain that 4 per cent. is totally unrealistic and the teaching profession generally should remember that since the Government came to office in 1979 teachers' salaries have increased by 58 per cent. as a result of the Clegg award and the later assessment. A 4 per cent. limit is now legitimate and right. I remind those involved in teaching that, to a large extent, despite the inevitable reduction in the number of pupils, they have greater job security and job satisfaction than many people in the private sector.
As a result of the two forms of squeeze that I have mentioned, the only practical effect of reducing the RSG from 59.1 per cent. to 56.1 per cent. will be a transfer of expenditure from central Government to the rates. That in itself will mean a 5 per cent. increase to pay for the assumed new levels of expenditure. To that extent, therefore, the Government are being over-optimistic if they believe that the reduction from 59.1 per cent. to 56–1 per cent. in rate support grant will achieve a further reduction in local authority expenditure. Certainly it will not be possible in education. Indeed, I believe that authorities which attempt to achieve it will probably be those which have always done their best to run a tight service and are therefore least able to achieve it and most likely to suffer damage to services as a result.
I understand the reasons behind the proposals, but it is a pity that the rate support grant has been reduced in this way because in practice it will mean a transfer of expenditure on to rates which is contrary to the direction in which we should be going at a time when rates are attacked for falling unduly hard on industry, households and private businesses.
My final point relates to the future. It is no good criticising the rating system or the level of rate support grant unless one is prepared to say what, if anything, should be done about it. Again, my right hon. Friend is to be congratulated, as is my right hon. Friend the Minister for Local Government and Environmental Services, on the Government's great initiative in inviting public comment on alternatives to the rating system.
It is easy to criticise the rating system for not adequately representing people's ability to pay, the number of people in each household or the extent to which services are used. Nevertheless, it has some advantages, one of which is ease and cheapness of collection. Speaking purely for myself, I cannot pretend to be enamoured of the alternatives set out in the Green Paper. If we are serious in reacting with concern to the burden of rates on small businesses and individuals, we must try to reduce the proportion of
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expenditure collected through rates. Realistically. the only area in which that could be done is that of education expenditure.
Mr. Christopher Price: The right hon. and learned Gentleman has criticised the Green Paper. Does he agree that the appendix to it was prepared under his own stewardship and suggests taking teachers' salaries out of the rate support grant altogether?
Mr. Carlisle: I shall limit myself to saying that the date of the Green Paper is December last year. However, I was about to say that I happen to agree with the views stated in the appendix or at least that they deserve further thought.
I believe that there is a case for transferring a far greater proportion of education expenditure to central Government. This could be done in two ways. Teachers' pay could be taken out and put on to central Government. It should be remembered that for most county and metropolitan districts staffing costs represent 70 per cent. of the education budget and teaching staff alone 50 per cent. of the budget. Alternatively, a specific block rant for education could be provided related to grant-related expenditure for the area.
I realise that the second proposal would affect the present relationship between the Department of Education and Science and local education authorities, but that would not necessarily be undesirable. The very fact that local authority expenditure cannot at present be hypothecated means that the Department cannot ensure that money will be spent in the way that one might wish it to be spent. Indeed, there is confirmation of that.
In recent months and years there have been substantially different levels of provision in different geographical areas. A fair description of the Secretary of State for Education and Science is that he is the reverse harlot of the ages. He must take responsibility for what lie has done in education, although he has very little or no power. Therefore, something which changes the relationship between local education authorities and his Department would not necessarily be undesirable. It would not mean that we would have to do away with all local authority control in education. I certainly do not believe that taking greater financial control centrally would mean local education authorities giving up their right to choose the types of schools in their areas.
We have a system of grant-related expenditure. It would be possible to pay to that level or, better still, to pay to about 90 per cent. of it on a direct grant with any decision above that level having to be met by the local authority out of its ratepayers' pockets. One could then achieve a method of financing education which could live alongside the existing local education authorities with their interest and involvement in education, while at the same time reducing the level of expenditure on the rates, without encouraging financial irresponsibility by the authorities. I very much hope that before next year's rate support grant further thought will be given to this matter.
5.41 pm
Mr. Stephen Ross: I congratulate the right hon. and learned Member for Runcorn (Mr. Carlisle) on his realistic attitude to what is likely to happen on rating reform. So much hot air has been talked and political publicity made out of the whole question of changing the

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rating system that it is only when one gets down to deciding how to improve matters that the subject becomes more complicated. I should prefer to do something more on the lines he suggested than, say, a poll tax, which I gather is the present front option.
This debate is occurring very late in the day. We on the Isle of Wight approved our budget today. I suppose that if the Government are defeated tonight, we could be in some trouble. I made my speech, got the proposal through this morning, and here I am this afternoon debating the grant order.
I am worried about the Secretary of State's announcement, although I know it appeared in the supplementary order, of his withholding about £116 million on the rate increase order, which presumably will affect councils' budgets in a form of clawback. Am I not right?
Mr. Heseltine: The hon. Gentleman will obviously want me to consider any specific question and I shall do that immediately and urgently. I was confirming announcements about which treasurers will be fully aware.
Mr. Ross: I am grateful for that comment, but I am not sure whether the treasurers were aware of it before 28 January. If they were, I shall leave it at that. I am relieved, because I did not want to face changing matters again.
I never opposed the present Administration's change in the formula, and if one considers the record that will be confirmed. Although I believe it was well intended, I never felt that the formula introduced early in 1974—which was a genuine attempt by the previous Conservative Administration to give more money to inner cities—ever worked to my local authority's advantage or many others. The right hon. Member for Manchester, Ardwick (Mr. Kaufman) commented on that aspect, but the same criticisms might be levelled at the previous Labour Administration.
The old formula took the wrong grant base, penalised the thrifty and encouraged overspending. Therefore, I thought that the Government were entitled to change it and to introduce the block grant. My authority's position was improved by the block grant. It is somewhat difficult to talk against it, because it has certainly been a great relief to us.
The transport supplementary grant which we received this year has been generous, and I suspect that other authorities have been similarly treated. We certainly are grateful for it. However, it is a complicated formula and it contains a whole range of new jargon: "claw-backs", "holdbacks" and "super holdbacks". We are supposed to lie back and enjoy the "super holdbacks", but I still do not understand them.
It was rightly stated that many authorities have experienced some pretty odd results. The formula is not yet right.
The right hon. and learned Member for Runcorn referred to the reduction of the rate support grant from 59.1 to 56 per cent. As he rightly said, that places a greater burden on local authorities. In my constituency, it means an automatic rate increase of 5.94p. That sum is required to make up the balance from our rates. I would not object to the shift of grants from central to local level if only the Government would give it more publicity, say what they have done and explain it to our ratepayers.
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I want local authorities, if possible, to raise more of their own finance, so long as they are given greater jurisdiction on how that money is spent. My main complaint against the Government is the continual denigration of local authorities, nearly all of which is undeserved. The general public, of course, tend to believe what they hear and read and it makes the lives of officers and elected members much more difficult and often unenviable. If one wants people to give up time to stand and serve on local authorities, we are not now going about it in the right way.
Another in word is "privatisation". Many Conservative councillors and their supporters at public meetings say "Why not privatise this, that and the other?." There are cases when privatisation can be made to work, but there is nothing wrong with an efficiently managed public service. It is about time that that was also said in the House, because some of our public services are extremely well run and will not improve by being privatised.
The rate support grant settlement this year, as previously, contains an unrealistic allowance for inflation and wage increases. That fact should also be appreciated when local authorities make rate assessments. We have allowed 7.5 per cent. for inflation and the settlement allows 9 per cent., which is, of course, well below the current rate. Individual councillors have virtually no say on wage settlements, and certainly not on educational salaries. It is not good enough to tell them it is all in their hands. It may be in the hands of appointees from the ACC or AMA, but we know that we have no say in determining the level of the wage settlement. Nevertheless, we must pick up the bill at the end of the day. That is a very good reason why teachers' salaries ought to be decided and paid by central Government.
The Secretary of State wants local authorities to issue reports on almost every subject of expenditure under the sun. He must be a little more careful and fairer when quoting comparisons between authorities. There are often good reasons for such differences.
Taking a headage count, as appeared in my local newspaper recently, the numbers at county hall, it was claimed, had risen by about 50. That figure was levelled at me at almost every public meeting I subsequently attended. However, our employees actually decreased between March and December by 53. It depends on the day the count is taken, how many people may be in the office, away through illness or are part-time workers on that day. It is easy to use some of these statistics and create a misleading story.
The main complaint at our rate fixing this morning came from the leader of the Conservative group describing the amount of paper work. He complained bitterly about all the paper work involved with primary schools—he said that he was a governor of such a school—setting out the rights of parents and individuals about the appeal system and other aspects. We had to tell him that the Education Act 1981 introduced the requirement. It is burdensome for local authorities and it adds to their costs. However, it is right that parents and others should have more say in the way in which schools are run and the complaint system. They should be able to make representations that their children should go to a particular school, for example.
However, when the Government introduce these requirements, they should have the generosity to explain that a duty has been imposed on local authorities by central Government that they are expected to carry out and that

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the procedure will be more burdensome and will involve extra paper work to ensure that it is carried out properly. If the requirement is not observed, undoubtedly someone will complain to the ombudsman, which will present a further burden.
My general complaint against the Government is their attitude to housing. Hon. Members will do well to read the third leader in The Times today. We are having yet more rent increases for still poorer services. The bad odour for this falls on the unfortunate housing authorities and the party that is in office, whether Tory, Labour or Liberal. If the party that is in office is increasing the rents, tenants will consider that it is the fault of the council down the road. The Government's housing policies are a disgrace, and I do not know when we shall be able to put them right. It will take a long time to do so.
It is the reported intention of the Secretary of State to limit the expenditure of local authorities on unemployment initiatives to a halfpenny rate. That will be a monstrous imposition. Councillors with any gumption must surely be allowed the opportunity to have more flexibility than that. They are in a position to know better what needs to be done. Local councils will not produce schemes that are contrary to Government policy. They will not come up with schemes that will cost umpteen million pounds, but there are smaller things that they can do. A halfpenny rate on the Isle of Wight would produce only £65, 000 or £70, 000. That would be a flea bite. We want desperately to take more initiatives to help those out of work.
Representatives of the Confederation of Shipbuilding and Engineering Unions met me last night to discuss the 14.2 per cent. unemployment rate on the Isle of Wight. We are not an assisted area. The confederation expects the local authority to do more and the authority wants to do more, even if that is only putting on extra education classes at our technical college.
It is to be expected that any Government who meet over half the cost of local authority services will expect to have a major say in how much taxpayers' money is spent and on what. The argument between central Government and local authorities appears to centre on whether the Government should have control over the portion that is provided by ratepayers. I believe that local communities need local government and should want to keep it. I think that it is their wish to retain it. If they learn that they are about to lose it, they will be profoundly disturbed.
I am concerned at the progressive erosion of local government sovereignty in the name of Government macro-economic control. Whitehall bureaucrats worry me a darned sight more than county hall bureaucrats, and the Whitehall bureaucrats have been far less successful in managing their budgets than those at the county hall.
The Liberal Party has no wish to place unnecessary burdens on ratepayers, whether domestic, commercial or industrial. In my constituency, we shall endeavour to keep within the Secretary of State's limits. The authority in my constituency has laid it down clearly and flatly that it will stay within the GRE. I am delighted that the right hon. Gentleman has confirmed that there will not be any holdback on those who stay within the GREs. It is inevitable that there will be clawback. The authority on the Isle of Wight does not know the extent of the clawback and it has had to provide adequate resources and balances to meet it when it comes. The authority has come up with an
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11.9 per cent. rate increase, which will put it into the lowest third of English and Welsh counties, but that means a standstill budget.
Mr. Heseltine: Perhaps the hon. Gentleman did not hear what I said about clawback. As he has talked about coming to decisions and making provision for clawback, it is important that he should read carefully what said in my opening statement. From what we see of the budgeting of local authorities, it is our view that clawback will be low.
Mr. Ross: I am delighted to hear that, but that is what we were told a year ago. I am a member of the Local Government Finance (No. 2) Bill Committee. When I asked the right hon. Gentleman's ministerial colleague about this issue, he said "Yes, there will be clawback." There is good reason to complain that this news is corning very late. I am sure that authorities other than ours on the Isle of Wight have already announced their budgets. My authority will have to live with its budget now. As I have said, it will mean a standstill budget and a restricted capital programme. I think that there is only one major project. This will not be good news for contractors who are desperately looking for business.
I become rather tired when I hear the constant pleas made from the Tory Benches to relieve the "unfair" burden that commerce and industry have to bear. I own two shops and am a ratepayer. I do not believe that Tory Members' claims are fully justified. I am sure that it is possible to select areas in which there have been huge rate increases. I am not saying that there has not been suffering in those areas. I agree that there are exceptions. However, do not believe that the burden has fallen unfairly on commerce and industry. Just look at current rents arid rate assessments before complaining. It is infuriating that those who shout the loudest are most often those who are demanding improved services.
If the Government want to do something for industry—I am sure that they do—surely they should introduce some measure of derating, which still applies in Scotland and now in the enterprise zones. It is the continuing denigration of local government and not so much the extraordinary vagaries of the rate support grant, which. I fear will be with us for much longer, that leads me to support the Opposition, and I shall do so when the Division is called. It is time that we heard more support for local government from the Government Benches.
5.57 pm
Mr. Nicholas Lyell: I am glad to take part in this important debate on what is a complicated but highly significant subject for the whole of Hertfordshire. I am glad to say that in large measure my remarks will have the support of my right hon. arid hon. Friends who represent the other constituencies in the county.
I shall make some general comments about our overall rate support grant settlement and some detailed remarks about grant-related expenditure, our constantly falling grant, the potential effects—in the light of what my right hon. Friend the Secretary of State has said, I am happy to be able to say "potential"—of clawback, and about the adverse results that we suffer as a result of our high rateable values.
In opening such a speech one is conscious of using a good deal of jargon, and some might think gobbledegook,

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but so technical is the subject that it is essential that anyone who plays an active part in fighting the rate support grant battle for his county or district has to become learned in this sort of necromancy.
I recognise the background to the Government's actions and I fully support what they are trying to do. No one can fail to realise the importance of controlling the consistent overspending that has taken place over the past 10, 15, 20, even 25 years. It was much higher overspending when the previous Labour Government were in office but the Government must tackle the overspending that is still taking place.
Over the past year there has been overspending of about 10 per cent. on the Government's income and that is represented by excessive borrowing in the whole public sector. One cannot overlook the effect of that on inflation, on our competitiveness and, therefore, on the long-term interests of our children with whose future we are so deeply concerned. That will be especially so when I discuss the effect on education of the rate support grant settlement in Hertfordshire. I am entirely behind what the Government are seeking to do to control spending. In seeking control we cannot overlook the fact that local government expenditure, including education spending, is about 25 per cent. of all public spending.
We have some significant problems in Hertfordshire this year arising from the outcome of the rate support grant. I do not suggest that they are our problems alone, or that they cannot be overcome. We shall, however need good-will and help from all influential quarters—from the county council, which has to make difficult budget decisions following the reductions; from those in the education sector whose approach and whose wage and salary levels affect spending so much; and, above all, from the Government, who have to set up and to implement a fair and satisfactory system. I value the discussions that I have had with educationists throughout the county and I shall say more about them later.
I shall summarise Hertfordshire's problems. The county has practically the smallest grant-related expenditure increase of any of the shire counties—about 5.6 per cent. It is within that increase that one has to try to pack the desire for services and spending against a background of inflation in the wages and general sectors.
Hertfordshire has almost the largest loss of grant of any shire county—6.8 per cent. Surrey is the only county that fares worse. Hertfordshire has one of the highest average domestic rate payments. That is an important point. Domestic and business ratepayers in Hertfordshire pay a higher proportion of the total county spending bill than in almost any other county. They have to meet between 57 per cent. and 60 per cent. of the total bill. Although the overall levels of spending are being cut this year, the substantial loss of grant means that rate increases of at least 13.6 per cent. will have to be met.
We in Hertford shire recognise, as my right hon. Friend has pointed out to us in helpful discussions, that the county is a high spender on education. It is a high spender by choice. That choice was not made in the past few years. It has been established by a Conservative-controlled county council over the past 20 years. We believe in high spending on education, not for itself but for what it provides. I am grateful to note that Opposition Members are nodding. But we are not excessively high spenders
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overall. We have our priorities right. Our spending on education is 13 per cent. above average. I know, Mr. Speaker, that you will approve of that. But our overall spending is only 31/2 per cent. above average, and our spending on refuse collection is 18 per cent. below average. That represents a proper sense of priorities in the county that I am proud to represent.
Why is Hertfordshire a high spender on education? It is not because we do not control our budget, but because, 20 years ago, we instituted a system of smaller secondary schools than most counties, with only five form entry, and with many local primary schools.
Hertfordshire is an area of high technology, where parents rightly have high expectations for their children. It provides 21 per cent. more pupils taking 0-levels and A-levels than average. I know that my right hon. Friends will wish to encourage that. They will agree that the principle of reinforcing success should be fostered. It is necessary, when planning this year, and in future years for proper levels of support for education and for proper levels for the education component of the grant-related expenditure assessment, to make enough allowance for the high level of education spending to which I have referred.
This is not to say that there are not things that we in Hertfordshire can do to improve our own position. I shall deal with county council services generally and the education sector in particular before making a particular request to my right hon. Friends concerning what they should do for us. I am glad to be able to say that as a result of close consultation involving senior county councillors and county officials there is a move afoot for the county council, possibly with the assistance of outside consultants, to scrutinise once again—the decision has not yet been taken by the county council but I am glad to see this initiative—its overall level of spending within its grant-related expenditure assessment of £303 million.
Many people believe that the long-standing policy of five-form entry secondary schools should be reviewed and that there must be a willingness to consolidate in line with existing rolls to provide the best possible value for our children and to achieve the spread of subjects and the excellence of teaching that is required. This is the view of many headmasters who have spoken to me privately about the matter. There is a wish to return to a policy of recruiting outside the county to achieve the excellence that I have described. There is need to examine again the number of primary and secondary schools in the county required to achieve the best possible effects.
Mr. Tristan Garel-Jones: Will my hon. and learned Friend agree that the teaching profession can assist Hertfordshire county council to retain the standards enjoyed by our children by working within its trade unions to try to achieve a reasonable wage settlement within the range of the Government's guidelines? If such a wage settlement were achieved, I think I am right in saying that it would probably not be necessary to make any cuts in the education budget.
Mr. Lyell: I am grateful to my hon. Friend. What he says is right. I am sure that this kind of support and cooperation will be obtained from the many teachers that we have met. My hon. Friend and I and, indeed, all my right hon. and hon. Friends within the county have met teachers, governors and parents who have expressed their desire to maintain the fabric of our high standard of

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education. We can be confident, I believe, that when the teachers give advice to their unions negotiating the Burnham settlement they will bear in mind the part that they can play.
It is, I believe, sufficiently well known for me to say that Hertfordshire has allowed 6 per cent. for teachers' pay in its budgeting for this year. The Government guideline is 4 per cent. According to what has appeared on the tape today, the offer within the Burnham Committee—I do not know whether this represents an opening offer—is that 3.4 per cent. is appropriate. The background, as my right hon. and learned Friend the Member for Runcorn (Mr. Carlisle) the former Secretary of State for Education and Science has stated, is a rise in education salaries of 58 per cent. since 1979 and the Clegg report. If salary increases were kept down to 4 per cent., the county would be saved about £2.6 million. The proposal in Hertfordshire this year is for extra cuts of £4.1 million. If the number of teachers were reduced in line with falling rolls, which is not an unreasonable proposition, although it has not happened in all past years, and salary increases were kept to 4 per cent. it would not be necessary to make one other extra cut. That is very significant.
I am sure, from the very responsible attitude of every teacher I have met—and I think I can fairly say that 1 have met scores in the course of my discussions in the last few months—they will be putting that point very firmly when they are looking at what they can do to help. I am not saying that to suggest that teachers are overpaid. I greatly value what they do in our county. But then most other people would not regard themselves as overpaid either, and we know that levels of pay in much of the private sector are often rising between 4 and 6 per cent. and frequently less, as my right hon. Friend said, and not necessarily against the background of the increase of 58 per cent. since 1979, which I am happy to say teachers have enjoyed.
My concluding remarks concern what we look for from Government now and in the future, because my right hon. Friends have not only to look at this year, they have to look keenly at next year. This is where we would be very grateful for their sympathetic consideration. We are tackling our problems this year and some of the things I have said bear on that, but we are also looking to next year when rolls will go on falling and our problems will not simply disappear, though I hope we can square the circle and overcome them.
It is very important that we do not find ourselves boxed in by too tight a grant-related expenditure assessment. It is very important that that assessment, particularly in education, takes account of our high standards, and high standards of achievement, which we wish to maintain, and which parents all over Hertfordshire wish to maintain. When I say that in the last 10 days I have been to a very sensible and orderly meeting on this subject in Tring—which is, after all, a town of, say, 7, 000 to 10, 000 people in my constituency with one major secondary school—and the school hall was absolutely full, with standing room only, that will demonstrate more eloquently than the hundreds of letters that I and my colleagues have received how much we in Hertfordshire cherish our education system. We do not, therefore, wish to find ourselves boxed in on what we are entitled to spend. We have no wish to go into the penalty area but we must have sufficient room for manoeuvre to maintain those standards.
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Last year we were very sensitive on clawback. We lost the equivalent, I think, of 3.3p in the pound in rates by clawback, a sum running to several million pounds. If we had that today, we should be that much better off at the start of this year. I was much encouraged by what my right hon. Friend said, that there is much less to fear from clawback this year, and I shall be inviting those who have the budgetary responsibility in the county to take that into account in manoeuvring right up to the top level of spending to which they are entitled. I see my right hon. Friend blenching a little, but that is how it has to be, because he knows as well as I do that the effect of clawback is not to give us a penny piece more that we are entitled to spend before we hit the penalty area, but simply to ease the cartilages a little, and enable precise budgeting to be done with even greater precision. That is one of the important technical details I have learnt over the last few months.
What we would say about clawback, if there were to be any, is that it is wrong in principle that those who stay within the guidelines should pay the penalties for those who do not. I appreciate that it is a long-standing system and perhaps one which my right hon. Friends have inherited. They inherited many a bad thing which they have sought to put right and I ask them to turn their formidable minds to putting this right as well.
Hertfordshire has been losing grant consistently, year in, year out, Government in, Government out. In 1973 we received 1.8 per cent. of the total grant going; this year we received exactly half that figure, 0.9 per cent. This year, in particular, the fact that we have very high rateable values in Hertfordshire, the fact that the individual has a highly rated house because it is on the outskirts of London and so digs deeper into his pocket to pay his rate bills than do others in other parts of the country, militates against the amount of grant that we receive; since it is assumed that because our rateable values are high we who live in those houses are rich. That is not necessarily a correct assumption. 1 am not taking any brickbats from the Opposition, and I am glad to hear that they are quiet when I mention that. [Laughter.] That is the way to stir them up, Mr. Speaker.
I am not taking any brickbats from the Opposition because more money has gone into inner cities, and more money has gone to the deeply deprived in our society, and this they no doubt welcome. I hope they will give credit for that to this Government, whom they always describe as being unconcerned with such problems.
Nevertheless, it is hitting us hard in Hertfordshire. We are not as rich as our rateable values would make us appear and we need a fairer system of grants for the future.
We are thoroughly behind what the Government are trying to achieve. We recognise the complexity of what they are seeking to do. Nevertheless, we cherish our education above all else and we will not have it said to us that we may not have a high standard of education. We believe it is possible to square the circle in the different ways I have suggested and we look to my right hon. Friends to do everything they can to help us do that.
6.16 pm
Mr. John McWilliam: I have listened with great interest to what the hon. and learned Member for Hemel Hempstead (Mr. Lyell) and also the right hon. and learned Member for Runcorn (Mr. Carlisle) said in relation to education expenditure within the GREAs. I would

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commend to their reading the report of the Select Committee on Education, Science and Arts on 14 to 16-year-olds, laid on the table and published today, because it advises the Secretary of State to introduce a system of curriculum-led staffing.
It is all very well for the right hon. and learned Member for Runcorn to talk about pupil-teacher ratios improving simply because of the accident of fewer children going into schools; and that is true only in certain age ranges, anyway. What he did not say was that that can create problems as well because, whilst there may well be an improving teacher-pupil ratio, if there are insufficient specialist teachers to provide the breadth of curriculum that a child needs, the improvement is illusory and the standard of education of the child accordingly poorer. Indeed, when we were taking evidence on this fact we heard from Dorset that it had attempted to introduce the recommendation that it should go to curriculum-led staffing but that it had been roughly 50 teachers short and had not been allowed to recruit them.
There is no doubt, therefore, that if the hon. and learned Member for Hemel Hemstead and his right hon. Friends want to see an improvement in education, they have to accept that it is marginally more expensive to introduce curriculum-led staffing than to look at misleading pupil-teacher ratios that do not tell us a great deal about either the schools or what the children are taught in them.
I would like also to complain bitterly about the overall level of education expenditure within this rate support grant order because in my county, Tyne and Wear, a very small metropolitan county with poor metropolitan district councils in it, the result of the penny-pinching in education last year and continuing pressure on it this year is that young people, in an area where youth unemployment is over 50 per cent. are unable to take appropriate courses of further education at certain colleges because those colleges happen to be in another local authority area. Unless it is a directly vocational course, or one leading on to a vocational course, those young people will not receive the outwith fee from the local authority.
Before the Government congratulate themselves too much, will they realise that within this set of dry documents there lies a tale of continuing human misery and tragedy in areas such as the North-East? Every halfpenny cut from local authority expenditure hits us in different ways in different parts of the country.
I listened with interest to the hon. and learned Member for Hemel Hempstead complaining that high rateable values in Hertfordshire were causing people problems with high rates. The high rateable value puts a far less onerous burden on ratepayers than the massive social and economic problems that we suffer in the North-East. The money that local authorities have to spend to try to counter at least some of those problems, because the House has given them a duty to counter them, results in high rates in Newcastle as well, not because of high rateable values but because the rate support grants particularly in the past year, going on to this year, are incapable at their present level of doing anything to alleviate the absolute disaster that the present Government have perpetrated on the North-East.
I advise the Secretary of State to think very carefully before he continues his claims that he has saved public money. Every time he cuts expenditure in such a way that
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it costs us a local government job in the North-East not a halfpenny of public expenditure is saved, because the person concerned goes straight on to the dole. All that we do is to change the accounts from which the money comes. There is no opportunity for the person to obtain another job in my area. The adult male unemployment rate in some villages in my constituency is over 45 per cent. When we pay off a school caretaker because we close a school in a village such as Blackhall Mill we not only close the village's only amenity but produce another unemployed person three miles from the Consett steelworks. He does not have a cat's chance of another job. Therefore, let us be aware of when we are saving money and when we are not. Let us not be self-satisfied over the illusion of saving, which the Secretary of State seems to be so keen on.
There is another problem under the order. In an area where youth unemployment is particularly high the local authority, being a good employer, has traditionally always taken on more than its fair share of craft apprentices. Because of the restrictions on public expenditure imposed by the present heartless Government, it can no longer do so. Therefore, we are not only causing youth unemployment today but are storing up trouble. Industry in those areas is going out of existence so fast that it is not true, and it certainly is not taking on many apprentices.
In a few years we shall have acute shortages in necessary skills. Where will the carpenters, the electricians, the bricklayers and the stonemasons come from? Many of our schools are Victorian and are built of stone. We need all those skills to keep the fabric of local government and the education system alive. We are not training those workers and industry is not training them. Where shall we obtain them? The order does not contain sufficient provision even to permit little luxuries such as taking on an additional couple of apprentices.
I should like to refer back to the suggestion that somehow everything will be all right when the Government tell us what will replace the rates. I must again disillusion the House. Like the hon. Member for Isle of Wight (Mr. Ross), I serve on Standing Committee D considering the Local Government Finance (No. 2) Bill. It was clear from the debate on part I that no viable alternative—indeed, no alternative, whether viable or not—would be presented to the House in the coming year and probably not next year.
Any hon. Member who has taken the time to read carefully the Green Paper on the rates will know that the parts knocking down suggested alternatives are more tightly written and better argued than those setting up the suggestions. The overall impact of the Green Paper is to discourage any hope that there will be a real change. I do not believe that there will be any change. My impression is that the Green Paper was published merely to fulfil a pledge given by the Prime Minister some years ago. I have the distinct impression that that is as far as it will go.
I become very annoyed when I hear people decry local government and when I hear people glibly throwing around words such as "overspending", because, in the context in which it is currently used with regard to local government, "overspending" has nothing to do with the idea that the word would reasonably create. I see nothing wrong with a local authority, duly elected on a programme which it fairly put before the people and which it fairly stated would cost more money, carrying out that programme. That is democracy. What is wrong is central Government's trying to suggest to local government that

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the civil servants in Marsham Street know best. They are all extremely able and intelligent people, who work very hard, but they do not know the problems in Winlaton and Blackhall Mill. My local authority certainly does. The civil servants do not know what the problems are in Blaydon and parts of Hertfordshire. Most of them have never been there. Come to think of it, I do not think that I have been to Hertfordshire.
It is ludicrous that local government is told "Be thrifty. We know best. We shall see you all right. We know the problems that you face" and at the same time there is imposed on duly elected local authorities the will of people who do not know where those authorities are, what they do or what the basic problems are. I cannot pay a high enough tribute to the many thousands of local councillors throughout the country, whatever their political persuasion, who spend hours and hours going through the tedious paperwork resulting directly from the Government's legislation. They spend hours and hours slogging their way through budget meetings trying to work out what they can do to save money on this and that and mitigate the worst effects of some of the orders.
I cannot praise those people enough, and I should like to hear the Secretary of State say the same for once. Local councillors receive next to no recompense. They work long hours, and their jobs and their families suffer as a result. I should like to hear the Secretary of State for once graciously tell them "You are doing a good job, lads. A few of you are a bit naughty, but you are all doing a grand job, and I hope that you will continue to do it." Without those willing people, we should not have an active local democracy. We ought to recognise that. Most of us are here all the time and we are paid for being here. We do not have to do anything but eat, sleep and think about politics, but they have their families to look after. So let us have some grace towards local authorities.
Derating and enterprise zones have been mentioned. Industrial derating as it exists in Scotland is an interesting concept. It is designed to try to stop Scottish industry paying more rates than it would, were it located in England. That is all. It does not effectively derate industry at all. The calculations are complex. It depends on fixed plant, investment and all sorts of things. I do not think it is a viable alternative.
It is nonsense to say that enterprise zones benefit. The biggest chunk of an enterprise zone in Britain is on Tyneside, in my constituency. All that has happened is that rental values have gone up by more than the occupiers would have had to pay in rates. The Secretary of State is saying to local authorities that they can forgo the rate income, and the landowner or whoever owns the factory is making a profit. It all seems strange.
This order is appalling. It brings no comfort to us in the North. It does nothing to alleviate the problems that people are facing as a direct result of the policies of the Government. It does nothing to help redress the balance of advantage that has always existed towards the South-East. It does nothing to encourage local authorities to be more entrepreneurial about attracting new industry. It does nothing to help ratepayers find money which, in the North, they are hard pressed to find.
None of us wants people to have to pay excessive rates. On the other hand, all of us want to see the kind of services that the House has legislated for properly financed and applied. I look forward to the day, which I think is coming
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very soon because of this order, when a local authority takes the Secretary of State to court because it cannot carry out its fiduciary duty.
6.33 pm
Sir Julian Ridsdale: I welcome the opportunity to speak in the debate. I have taken pan in many debates on rate support grants. When I first came into the House, rates were not nearly so much of a problem because local authority expenditure was not so high. More often than not the order went through on the nod with just one or two Members present. With inflation and increased spending, so much of which falls on the ratepayer, we all have constituency interests.
Both sides of the House must bear responsibility for what has happened. We have had the opportunity for many years to reform local government finance. One of the absurdities is that we have a rate support grant system so complex that even the Secretary of State, who is an able Minister, has to read very complicated jargon. I wondered whether he understood it himself when he was reading some of it.
Nevertheless, we have had an interesting debate so far. We had an important speech from my right hon. and learned Friend the Member for Runcorn (Mr. Carlisle), a former Secretary of State for Education and Science. I was pleased to hear him advocating the transfer of the huge burden of teachers' salaries from local government to the central Exchequer. The number of teachers in England and Wales is 443, 000. It is greater than the Armed Forces, but equivalent to the size of the Armed Forces after the end of the war. Just think of the reaction if the cost of the Armed Forces had been put on the rates and we had asked for a huge subsidy to help meet it. This is the system with teachers' salaries.
Conservative Members, who do not believe in subsidy, have to find an aggregate amount of rate support grant of £10, 175 million. I support the Chancellor, the Prime Minister and the Government in the aims of their financial policies, but I wonder whether a mistake has been made, as my right hon. and learned Friend the Member for Runcorn said, in making a deduction of 4 per cent. in the rate support grant. That means that the burden will be transferred from the taxpayer to the ratepayer or, as in my constituency, that there will be severe cuts in the social services. Among my 33, 000 constituents there are 10, 000) widows and many disabled people. They wish to live in their own homes. If we as a party care, as we do, we ought to be careful about the move we are making glibly to transfer this burden from the taxpayer to the ratepayer. It would be much fairer if this expenditure were borne by the taxpayer. Because of inflation, ratepayers are finding it more difficult to maintain their property and they are less able to bear the extra burden.
Essex faces cuts of £36 million to achieve the Government's target. When my right hon. Friend replies I hope he will give a detailed explanation of his reasoning and the arguments so that we can put them to our authorities. From the correspondence that I have had with my local authority, I am not satisfied with the position in which I find myself. This is why I am speaking in the debate.
To get down to the grant-related expenditure in Essex, while taking account of inflation, will require a £7 million cut. As I said, the additional cut is £36 million. That means either a further burden on the ratepayer or further cuts in

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social services. I should prefer the burden to be borne by the taxpayer, not the ratepayer. In the end it will not achieve the result we want—value for money. It will bring about aggravation and agitation. It will undermine longterm Government policy, which is the policy that we should be pursuing.
Essex has been treated unfairly because it has done what it can in the past to try to meet the targets and has been good in achieving the required expenditure cuts. We do not like to compare ourselves with other counties, but when we look across the water we see that Kent is getting very much better treatment because of an anachronism in the rateable value. My right hon. Friend shakes his head. I am glad, because it gives me an additional argument to put to my local authority which tells me that Kent is receiving £60 million more than Essex in the settlement. I wish to have arguments that will satisfy not only my constituents but my county authority.
In a speech in 1972, I said that the 1972–73 approved expenditure on which grant was calculated was £4, 735 million, of which the aggregate of rate support grant was £2, 528 million. That has risen fivefold in 1982–83. We now have a figure of £21 billion and a subsidy of £10, 175 million. The subsidies are Alice in Wonderland figures. We do not believe in subsidy, but we believe that we should try to get value for money and responsibility from those who must carry out——
Mr. Dan Jones: I notice that the hon. Gentleman heavily weighed his words on subsidy. The Secretary of State did that as much as the hon. Gentleman. Is it not a fact that the housing stock is becoming older? Costs are bound to rise as a consequence. Surely it must be acknowledged that houses that were built before the turn of the century will now need many repairs or must be demolished and replaced by new houses. Surely the hon. Gentleman will realise that and take it into consideration for Essex.
Sir Julian Ridsdale: I shall take those matters into consideration, but I wish to see realistic local government finance. I hope that my right hon. Friend will answer some of the points that I have made about Essex. I was delighted to hear my right hon. and learned Friend the Member for Runcorn approve the proposed transfer of teachers' salaries to the central Exchequer. If that is done, much of the steam will be taken out of the reform of local government finance. We need not worry about poll tax and other matters. To answer the intervention by the hon. Member for Burnley (Mr. Jones), if those proposals are carried out, the person who looks after his own house will have more money to spend on it because his rate bill will not be so high.
6.43 pm
Mr. John Cartwright: I hope that the hon. Member for Harwich (Sir J. Ridsdale) will forgive me if I do not follow all his arguments about the problems in Essex. However, on his main point, there is no doubt a strong case for transferring the financial responsibility for certain social services from local government to central Government. I hope that we do not grab at that straw without thinking about it carefully, because it could leave us in a position where local authorities are running services for which they are not financially responsible. It would
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cause difficulties in the relationship between central and local government if the former were paying and the latter administering. I agree with the hon Member for Harwich that the rate base is not large enough or buoyant enough to meet the demands that are being made on it, which is why we must have a reform of local government finances.
Faced with the plethora of documents before us and the complexity of the formulae and calculations, my abiding feeling is one of sympathy for my former colleagues in local government and especially for local authority treasurers who must make some sense of the matter. The Government's most powerful supporters would not deny that there is an element of doubt and uncertainty about the impact of the grant system on the present position.
In the Green Paper entitled "Alternatives to Domestic Rates, " the Government said:
"To budget sensibly and tightly, local authorities need to be able to project their income and their cash flow with reasonable precision."
All hon. Members will agree that local authorities have grave difficulties at the moment in forecasting their grant income. That is not a new problem. The rate support grant system has had, in recent years, a lottery element. There have been one or two winners and many losers. The winners and the losers seem to be decided by the attitudes of the Secretary of State of the day.
As long ago as 1976, the Layfield Committee, talking about the rate support grant system, said that the
"amount has been far from constant and its volatile and unpredictable character has been marked."
That has also been a factor in the past few years. The material before us shows that the figures are later than usual and, more shrouded in mystery than usual and that the whole system is more complicated than any that we have had before. Our discussions today are dominated by the spectre of the Government's second attempt at a Local Government Finance Bill. I agree strongly with the point made by the Member for Manchester, Ardwick (Mr. Kaufman). I do not altogether agree with the comment in paragraph 9 of the main report that clause 4 of that Bill will clarify the position. "Clarify" is not a word that I would have used about clause 4 in any of its manifestations.
Three aspects of the procedure before us are the grant-related expenditure assessments, targets and holdback. The GREAs are the central mechanism of the grant system. They are the foundation on which the edifice rests and increasingly they are to be used for target-setting in local government spending, despite all Government assurances to the contrary during the passage of the Local Government, Planning and Land Act 1980. The GREAs are supposed to measure what each council must spend to provide a common standard of service. However, there is wide agreement that GREAs do not properly measure needs in different parts of Britain. I quote the Association of District Councils, which is still Conservative-controlled, which said that the grant-related expenditure system is "extremely suspect and unreliable". In January it said of GREAs:
"They are much more complex, unintelligible and uncertain in their results than the previous system, and produce inexplicable and widely varying assessments unrelated to local spending needs of individual districts and types of district."
That is generally agreed in local government, as can be seen from some of the speeches that we have heard from hon. Members on both sides of the House.
Some of the anomalies have already been referred to in the debate. The police service is the classic example. We

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know that the GREA for the Metropolitan Police has increased by 24 per cent. between the supplementary report of 1981–82 and the 1982–83 report. That compares with a total increase for England of only 8.9 per cent. and an increase for the police authorities outside London of only 3.6 per cent. That huge rise for the Metropolitan Police means that there must effectively be a cut for all other police authorities. As is clear from the GRE figures, the lowest rise is in the area most affected by street violence, Merseyside, where the increase is only 0.8 per cent.
Either the GRE figures for 1981–82 were wrong or those for 1982–83 are wrong. They cannot both be right if there is such a massive change. As a further sophisticated amendment was announced today by the Secretary of State, that means another alteration. That shows that the GRE fixing at the Department of the Environment is not an exact science. Yet much depends upon those figures.
The second issue is housing. The Secretary of State reminded us of the Government's alteration this year, which proposes that if a local authority's notional housing revenue account is in surplus, its GREA is assumed to be zero. It is assumed that there will be no profit made from council rents transferred to the general rate fund. But that means that if there is to be a zero GRE figure for housing for a local authority it has no incentive to raise rents because it is automatically protected from a loss of block grant.
On the other hand, the urban areas, which often still receive housing subsidies and make contributions to the housing revenue account from their general rate fund will, if they fail to raise rents by the Government's recommended £2.50, have to increase their spending to make good the deficit out of the rate fund. That will lay them open to a loss of block grant and all the other penalties that will follow from the loss of block grant. The net result of this approach is to drive up rents in the areas with the greatest housing need and the worst housing problems, and where the service being given to tenants is often declining as the rents are rising. This is typical of the many anomalies of the GRE system.
Although targets are not set out in the report they are clearly central to the Government's strategy on the allocation of grant and in the control of local authority spending. Paragraph 8 of the main report puts it mildly. It says:
"The Secretary of State is therefore issuing guidance to each local authority about a target level of expenditure."
That sounds innocent and reasonable. However, there is a sting in the tail of paragraph 9, which says:
"the Secretary of State considers that it would be desirable to operate a scheme whereby the grant entitlement…should be abated for any authority spending above both its target and grant-related expenditure."
We know that under clause 4 of the Local Government Finance (No. 2) Bill the Government are seeking to introduce a powerful weapon to ensure that those targets are adhered to.
I object to the basic principle of setting targets for individual local authorities in this way. These targets are based on arbitrary decisions, not on any real, effective judgment of local needs and circumstances. They are based on the concept of a standard level of service which if applied would produce the dull uniformity that is inherent in the idea of a standard level of services. Variety, pioneering and experiment have always been the life blood of local government. We shall stamp out that feeling if we
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go too far down this road of overall standard levels of services, and if the target level of spending is applied for all local authorities.
I reject the principle of targets as the Government are applying them because I believe that it is an intrusion into the autonomy and freedom of local authorities. It is based on the centralist philosophy that the man in Whitehall or the man in Marsham Street knows best. I believe that the decisions about spending levels and the quality of local services ought to be taken by local people, and not by central Government or civil servants. I certainly believe that Government should not be involved in all the detailed spending of individual local authorities.
The Minister for Local Government and Environmental Services (Mr. Tom King): I have listened to the speech of the hon. Member for Woolwich, East (Mr. Cartwright) with interest, and I think that the House would be interested to know whether he is the spokesman for the SDP on these matters. He often, says "I believe" and the House would be interested to know whether that includes "we believe". He has spoken of decentralisation, a view with which many hon. Members on both sides of the House will be sympathetic. However, does the hon. Gentleman believe that national Government should have an overall responsibility for the level of public expenditure as represented by local government expenditure? That was the policy followed by some of his senior colleagues when they were in Government in another party. Does the policy of decentralisation mean that that policy has now changed?
Mr. Cartwright: I am the spokesman for the SDP in this House and I carry my colleagues with me in what I say. A little later I shall be spelling out some of the thoughts that the SDP has on its approach to the reform of local government finance. On this issue we are in the happy position of being no worse off than either of the two old parties. Neither of them is clear about its attitude to local government finance. The Government have simply produced a Green Paper that reproduces most of the schemes looked at by Layfield. The Labour Party has riot yet announced its own views about reform of local government finance. Therefore, although the SDP policies may not be clear it is in no worse a position than the other two parties.
Yes, central Government has a proper duty to be concerned about the overall level of public expenditure. Therefore, it is right for the Government to have a view about the overall level of grant and there is a case, although it could be argued both ways, for central Government to have a view about the totality of local Government spending. Where I quarrel with the Government is when central Government become involved in the individual spending decisions of hundreds of individual local authorities. That is wrong and I have not yet seen the Government spell out a clear economic case that justifies that sort of detailed control.
Mr. King: The hon. Gentleman referred to grant. Central Government have to be concerned about the level of grant—that is what the order is about, and it is Government money that is going. I hope that the SDP will realise that the Government have to be concerned about. that. The question is whether they should be concerned about the overall level. The hon. Member thought that there were other arguments, although by and large it was

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probably right for central Government to be concerned about the overall level of local Government expenditure. If that is so, and if those levels are not being achieved, what does the SDP think is the right approach to helping that achievement?
Mr. Cartwright: Our approach is clear from the policy of decentralisation. If, as a result of the reform of local government finance, and probably from reforms of local election procedures, local authorities can be much more directly accountable to electors for spending, instead of large amounts of local authority spending not being perceptible to the ratepayers, because they come from central Government grants or from the domestic rate, we shall have a closer relationship between a local authority, its spending and its local electors. The best way of controlling local authority spending is by local people, not by central Government deciding what the right level of an individual authority's spending should be or what services are right and proper for individual local authorities.
Some of the anomalies in the grant system have already been referred to. For example, the Secretary of State said that no local authority would be asked for more than a 7 per cent. cut in real terms, but that is against the minimum volume budget and is the lower of the original or the revised 1981–82 Budget. That means that those who increase budgets from the original budget of 1981–82 to the revised budget will have to suffer a much larger cut. It also means that some of those who cut their budgets between the original and revised budgets may still find themselves penalised by anything up to that 7 per cent. figure.
We also know that that 7 per cent. is based on the Government's assumption of a 4 per cent. pay increase and a 9 per cent. increase in other prices. There is wide cynicism in all parts of the House as to whether those figures will be achieved. If they are not, and the figures are higher, there will be a further real cut beyond the 7 per cent. figure.
Thirdly, there will be no adjustment in these targets for unforseen circumstances, such as riots, snow damage, local authorities meeting higher costs as a result of an increase in interest rates, or higher rent or rate rebate commitments as a result of the high unemployment. If any unexpected extra expenditure occurs there will be no alteration in the targeting system and local authorities will have to make good by making cuts in other services.
I wish to make a point about the Government application of the targeting system of individual local authorities. Some local authorities, who have met their 1981–82 target figures, are nevertheless clobbered the second time around under the Government's proposals for 1982–83. This is because of the inadequacy of the original GRE figure, which turns authorities into overspenders and wipes out the credit for past performance. That is particularly true of inner London.
I take the examples of four inner London boroughs, of varying political persuasions, so that I am not accused of any political bias. I shall start with Islington, which, as you will understand Mr. Deputy Speaker, is close to my heart. On the 1981–82 figures, Islington was estimated to be 2.9 per cent. below its target figures. It is under its target spending figure, yet it is required to make the full 7 per cent. cut to achieve its target for 1982–83.
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Hammersmith and Fulham, a Liberal-Conservative coalition council, is 2.6 per cent. under target, yet it is expected to make the full 7 per cent. cut. Southwark, a Labour-controlled authority that crept in, was 0.1 per cent. below target, but will have to make the full 7 per cent. cut to achieve its target for 1982–83. Wandsworth, often held up as a model of economy—the sort of authority that makes the cuts that the Government require—achieved a performance of 11.5 per cent. below target, yet it is expected to make further cuts of 3.2 per cent. to achieve its target for 1982–83. That shows the peculiarities and injustices of the target system.
I wish to point out two anomalies in the holdback system. I am grateful to the Association of Metropolitan Authorities, which produced a clear guide on the rate support grant settlement, for drawing attention to them. The first anomaly is the built-in propensity to overspend. As the Secretary of State said, the penalties apply only when spending is above the GRE figure or the target figure. Both add up to the same total. If councils spend to the higher of the two figures, to extract the last penny of grant, the total will be overspent. The AMA assesses the 1982–83 potential overspend as £790 million–58 per cent. will be in the shire counties and 23 per cent. in the shire districts. That is a major anomaly.
The second anomaly is what the AMA refers to as the switchback effect, which affects a number of authorities with a low rateable value per head of population—less than £133. Those authorities have discovered that if they continue to spend through the penalty area where they lose grant, they begin to attract grant again. In some cases, they can theoretically attract all the grant lost in the penalty area if they continue to spend. That is an incentive to spend rather than to cut expenditure. I am hesitant to draw attention to those anomalies as the Government will seek to make their arrangements even more complicated next year to tackle them. I should be grateful if the Minister would deal with those points when he replies.
The orders before us and the Local Government Finance (No. 2) Bill are part of a continuing process of ever-increasing central Government control—a process that rests on the theory that the man in Marsham Street knows best. It is a process of ever-increasing complexity. The Layfield Committee in 1976 said:
"the method of settling and distributing the grant is little understood outside very specialised circles."
If that was true in 1976, it is even more true today with all the talk in the debate about iterative processes, skewed targets, minimum volume budgets and close ending. It is dangerous that something as important as the rate support grant is so little understood by those whom it directly affects.
The whole process confirms one of the major conclusions of the Layfield Committee that local authority dependence on central Government grant has been a main factor undermining the independence and autonomy of local government. Layfield said:
"We are satisfied that the amount of grant…powerfully reinforces the political pressures for Government intervention."
His committee said:
"We too believe that in the end he who pays the piper calls the tune."
The whole centralist approach of the Government, which follows the pattern of the Labour Government, threatens the autonomy of local government. It is a commitment to an ever-increasing, more complicated and incomprehensible jungle of regulations. It will produce inevitable

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injustice and unfairness between local authorities. That is why I and my colleagues believe that the reform of local government finance must reduce the dependence of local authorities on central Government grant. We must create a position in which grant is used simply as a means to equalise varying levels of resources available to local authorities. We must have a system of local government finance that makes local authorities more responsible for paying for their own services. That system must give control of spending to local electors, not central Government. The orders before us go wholly in the opposite direction, and my hon. Friends and I will oppose them in the Lobby.
7.6 pm
Mr. K. Harvey Proctor: I propose to vote against the rate support grant orders. My reasons for doing so are not the same as those advanced by the hon. Member for Woolwich, East (Mr. Cartwright), still less those advanced by the right hon. Member for Manchester, Ardwick (Mr. Kaufman) in his opening remarks. In contrast to the right hon. Member for Ardwick, I fully support the Government's aim of curbing local and central Government expenditure. A reduction in Exchequer support for local authority relevant expenditure from 59.1 per cent. to 56 per cent. is to be welcomed within the present system. Even so, aggregate Exchequer grant in England in 1982–83 will be a staggering £11, 400 million.
My opposition to the orders is based on the distribution of expenditure between shire counties and inner city and urban areas. Before I develop that theme, I wish to thank my right hon. Friend for his timely reply today to a letter that I wrote on 22 December last year—together with the hon. Member for Harlow (Mr. Newens) and some of my hon. Friends—about the position of the London new town counties and the block grant system. I received his reply only today, and it needs careful consideration. I am sure that hon. Members will wish to examine it closely and discuss it with their new town councils before we reply to the Minister. In his letter he said:
"As the paper points out, the actual spending of nearly all the district councils with new towns in their areas is above GRE in 1981–82. The question which we have to address is whether this is because the GRE's understate the spending needs of these authorities, or because they are providing higher than average levels of services—if this is the case, the principles of the grant system mean that their ratepayers should be expected to make a higher contribution than in other areas, and grant is assessed on that basis."
My initial reaction to that statement is that local authorities with new towns have responsibilities placed upon them not of their own volition, but at the request of the Government and development corporations. I wish to discuss that important letter with my district council before I reply to the Minister.
Hitherto, it has been the Government's policy to redress the imbalance of the previous Labour Administration and return funds and resources to the shire counties. The rate support grant settlement orders mark the end of that process and initiate a trend of redistribution back to the urban areas. My right hon. Friend the Secretary of State for the Environment, in a purple passage in his speech, made it clear that much was being done for the urban and inner city areas. 1.understand that within the settlement there will be an estimated increase from 18.3 per cent. to 18.6 per cent. in block grant to the urban authorities within the inner city and partnership schemes, assuming that authorities spend to target.
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I shall briefly describe the effects on Essex. I am sure that the Secretary of State will agree that Essex has consistently been one of the most prudent and efficient local authorities in the country and that its record of expenditure in any service amply demonstrates that. However, the Essex case is that the Secretary of State confirms that the county needs to spend £28 million more just to maintain its present level of service, grant-related expenditure figures. Nevertheless, the county is to receive £7 million less in grant to support that.
The Government are further saying that Essex should really be spending £36 million less to get down to the Government's target figures. Even to get down to the grant-related expenditure figure, while accomodating inflation, has required £7 million of cuts, as my hon. Friend the Member for Harwich (Sir J. Ridsdale) said. To contemplate a further £36 million reduction would require savage reductions in service in all areas, in defiance of statutory duties.
The result is that in 1982–83, Essex is losing £18.8 million of grants, compared with last year. Of that amount, £11.3 million is clue to the national percentage cut, to which I referred earlier, from 59.1 per cent. to 56 per cent. That is a national decision that I and the county council accept. However, the county council objects—.and I agree with it—that its share of grant-related expenditure has fallen from 2.244 per cent. last year to 2.208 per cent. this year. As a result, Essex has lost a further £7.5 million, which the Essex ratepayer has to meet.
I am delighted to see my hon. Friends the Members for Brentwood and Ongar (Mr. McCrindle) and Saffron Walden (Mr. Haselhurst) present for this debate. It shows the importance that we attach to this matter. So far I have probably carried my hon. Friends with me in what I have said, but I may not do so for much longer.
Mr. King: One of the arguments advanced by Essex concerns numbers and the problem whether GREs accurately reflect the up-to-date numbers. The argument is that there are more ratepayers in Essex than there were in earlier years. That should not be overlooked. My hon. Friend will know that we had meetings with the senior members and officials of Essex, and I put the question to them, as I do now to my hon. Friend: what has happened to the product of the 1p rate in Essex during the past three years?
Mr. Proctor: I need notice of that question. I have said that I welcome the statement of my right hon. Friend the Secretary of State about the census figures coming through into the grant-related expenditure estimates in future. That will help a rapidly growing county such as Essex, and also a rapidly growing new town such as Basildon. It will help in future, but it is little consolation for the next financial year.
I come back to my argument. I ask myself why this has happened. I can only assume that it is because of the Government's decision to redirect at least some resources back into urban areas. Why? In my view, it is because of Government panic reaction to the riots that plagued our inner city areas last year. The idea is to throw money at the problem and hope that it will go away. To add insult to injury, we are now throwing at the problem not only money, but Ministers.
That brings me to one of my principal reasons for voting against the order, and that is the unwise appointment, in my opinion, of a Minister

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"to take special responsibility for matters concerned with race relations in the Department of the Environment's field of activity."—[Official Report, 11 February 1982; Vol. 17, c. 465.)
I make no personal criticism of my hon. Friend the Member for Ealing, Acton (Sir G. Young), who has taken on these responsibilities. However, I think that he was most unwise and ill-advised to issue an invitation to the ethnic community leaders, as reported in the Daily Mail, saying:
"If you have any serious problems just write to me and I will be glad to see you. The important thing is that people should feel they have a Minister they can come and talk to. My door will be open."
The extent to which a Minister's door is open should never depend on the colour of a person's skin.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. Perhaps the hon. Gentleman could help the House by saying which part of the instrument he is talking about.
Mr. Proctor: I am dealing with expenditure in the inner city and urban areas, as a number of other right hon. and hon. Members have done. I was commenting on the Minister who, presumably, will oversee the expenditure of these funds. My hon. Friend's reported comments that much of the £270 million mentioned by my right hon. Friend the Secretary of State in his opening remarks that is allocated to the urban programme next year—£60 million more than this year—should go on projects which will help to provide work for young unemployed blacks as well as improving their physical environment through better housing, will be heard with frustration and anger by the unemployed in Basildon and the county of Essex.
In my opinion, that appointment is an exquisite example of positive discrimination. It is an insult to the vast majority of the ethnic community and the indigenuous population who did not riot, burn and loot last year to the tune of £28 million, and who believe that this settlement represents funds which have been diverted from shire counties, such as Essex, and new towns, such as Basildon, to inner city areas. It will be seen—rightly, in my view—as a political sop, a gimmick, that will be regarded as being nothing more than an affront to the dignity of the ethnic communities and one which will do untold damage to race relations in this country.
I shall use my vote tonight in protest against an unworthy act which will be bitterly resented and regretted by the British people. It will make more certain, not avert, racial strife in the months and years ahead.
7.18 pm
Mr. Frank Haynes: I have listened carefully to what has been said in the debate, and it appears to me that there is a lot of complacency among Conservative Members apart from the hon. Member for Basildon (Mr. Proctor), some of whose comments I welcome.
I am sorry that the hon. Member for Harwich (Sir J. Ridsdale) has left the Chamber. He said that he did not agree with subsidies. It is odd to hear a statement of that kind when one realises that there is a fair amount of agriculture in Harwich. Agriculture obviously involves subsidies. If the hon. Member wants the subsidies to be stopped, he should say so.
Mr. Michael Brown: Is not the hon. Gentleman on a slightly dangerous point when he refers to subsidies? I presume that he is trying to make the point that farmers in Harwich are subsidised. However, I always thought that agricultural subsidies were meant to benefit consumers rather than farmers.
Mr. Haynes: I am a little surprised that the hon. Member should make a point like that. He represents a steel constituency. He went into the Lobby to stop subsidies to the steel industry in his constituency. He ought to be ashamed of himself for making a comment like that.
The Secretary of State for Defence asked the House for more subsidies to buy Trident, because it is much more expensive nowadays. He will be asking again. Conservative Members complain about subsidies, yet go into the Lobby to approve subsidies for that type of expenditure. Therefore, it is a bit hypocritical to hear such comments from Conservative Members.
The right hon. and learned Member for Runcorn (Mr. Carlisle)—who has left the Chamber—said that the rate support grant was complicated. That is not the point. The rate support grant should help local authorities to provide services for the people. Cuts in the rate support grant mean cuts in services. I have a whole list of them here, particularly for the county that I serve. What does a reduction mean? I have heard more about education this afternoon than anything else, as though it is only education that matters. I am a little surprised at that. The hon. Member for Ealing, North (Mr. Greenway) knows as well as I do that the Government have imposed massive cuts on local authorities that provide adult education. In some places, adult education has almost disappeared. People, particularly in my constituency, are trying to encourage those who have accepted redundancies from heavy industry to keep themselves active by means of adult education.
Mr. Harry Greenway: I should like the hon. Gentleman to make it clear that he does not deplore education debates and that they are most valuable. To that end the hon. Gentleman and I have sought to have education debates in the House. His remarks are a little out of phase with what he ought to be saying.
Mr. Haynes: I accept part of the hon. Gentleman's point. However, he must agree that many places have almost lost their adult education set-ups. My county was seriously affected. That was one reason why the adult education group was set up in the House. We go all over the place to find out the problems and to see if we can help.
The winter is not quite finished yet. I listened to the Prime Minister today talking about the way in which the economy has been affected by the snow and bad weather. The roads were tremendously affected by the bad weather. At times, we could ill afford even to grit them because of the Department of the Environment's cuts. The Minister should listen to what is being said, because I am severely criticising the Government and their monetary policy. The rate support grant is related to that. The Government's policy has been a dismal failure and the number of those who cannot find work speaks for itself.
The rate support grant is linked to the Government's policy on monetarism. Many local authorities will have to cut back even further than at present. My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), who once had responsibility for the disabled, asked a

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question today about 1981 being the International Year of Disabled People. Cuts were made up and down the country, although we were supposed to have provided that little bit extra. The disabled should be considered not only in 1981 but in every year and we should provide the proper services.
The social services could not exist without a Government grant. They get a slice of the rate support grant in order to provide the necessary services. One day an elderly lady met me at my surgery. She was 68 and had a mother at home aged 96. Her mother was not in an old people's home or in a warden's complex but was living with her daughter in a bungalow. The county of Nottingham has recently had four years of Conservative rule and cuts were being made before the Conservative Party formed the Government. The lady received home help twice a week. The Conservatives were elected to county hall, and at the end of the first year she received help only once a week. After the second year, she did not receive any help. However, there has been a change in political flavour at county hall and those services have been restored. That elderly lady was not looking after her mother at the State's expense, although that would have been possible. She is eaten up with arthritis and finds it difficult to cope.
That is what cuts mean to the social services. The same applies to the disabled. Ministers come to the Dispatch Box and ask for voluntary services, but life does not work like that. Sometimes we must beg people to do something, people have plenty to do anyway. We try to encourage families to look after their old people and they usually do. However, we have tremendous responsibility for some people and we should look after them. They are being hit by the cuts in the rate support grant.
We are told that inflation is the No. 1 priority. If inflation rises, as it has under this Administration, and if the rate support grant decreases, how are we to pay for the services that must be provided? That can be done only by increasing rates. Nevertheless, the Secretary of State has the nerve to stand at the Dispatch Box and to say that local authorities should not increase their rates. That is what he is saying in so many words. If local authorities go a little beyond the guidelines that he has suggested, he clobbers them and threatens to apply cuts in some other way.
Mr. D. N. Campbell-Savours: He taxes them.
Mr. Haynes: Taxes will not work for this Government. At present we have a means test in the form of rateable value. If we switch to tax, those with money will have to pay. That will not help the Conservative Party, because its members will stop contributing to party funds. The Government will get a belt in the mouth for that.
We must be sensible. I cannot see any alternative to the present system. It is obvious that there is no other alternative, or the Government would have adopted it by now. The Government made many promises before the election. I remember when the Minister of State and the Secretary of State were in Opposition. They talked differently then from the way they talk now. They said that when the Conservative Party returned to office there would be less Government control over local authorities. The exact opposite has happened. The Conservative Party is now in power, and the Government are shackling local authorities. They are also shackling the trade unions—or they think they are.
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Whatever the Government attempt, it goes wrong. That is clear if one looks at the economy since 1979. People outside have recognised that. People recognise it in my constituency because I tell them why the rates are going up. It is because of this Administration. I shall continue to tell my constituents the truth. The Government are causing the rate increases, not the councillors back home, who are being made to increase them.
7.32 pm
Mr. Harry Greenway: I cannot go down the same road as the hon. Member for Ashfield (Mr. Haynes), who has given us a wide-ranging speech with masterly content. I know what an excellent fellow he is. However, if I went through education in general, adult education, the problems of the disabled, social services, inflation, taxation, reform of the unions—to name but a few subjects mentioned by the hon. Gentleman—I would be supporting him in his misdirected straying from the business before the House. Therefore, I return to the subject.
I welcome the grant-related expenditure assessment as a more flexible and selective system, on the whole, than the old method of calculating the rate support grant. I cannot see how anyone can argue for a blind block grant that is not open to scrutiny in detail as against the much more open system, which has a much greater moral force on the areas to which it relates—[Interruption.] I am no longer following the argument of the hon. Member for Ashfield. I had to explain that I could not go down the same road. The system that we have had for the past two years is much more open and much fairer, and is to be welcomed for that.
For the hon. Member for Woolwich, East (Mr. Cartwright) to say that the figures for this year are more shrouded in mystery than usual is nonsense. With the exception of last year the figures are more open this year than they have ever been. The hon. Gentleman went on to say that, if implemented, the target levels would produce a dull uniformity of provision and that it was a case of Whitehall knowing best. What the hon. Gentleman says does not stand up to examination. One has only to examine the GREA in detail to see that it takes account of local needs specifically and visibly. There is no question of uniformity. There are things that one can say against the GREA, but not that.
Mr. Campbell-Savours: The hon. Gentleman implies that the GRE is translucent and that he can see it in detail. Has he seen the formula on which it is based?
Mr. Greenway: Yes, Sir. It is open to everyone to see the formula. I am pleased that the Under-Secretary of State for the Environment, my hon. Friend the Member for Ealing, Acton (Sir G. Young) is in the Chamber bsssecause he will be concerned with what I shall say.
Mr. King: Did not my hon. Friend think that that was an extrordinary intervention by the hon. Member for Workington (Mr. Campbell-Savours)? As my hon. Friend is a conscientious Member of Parliament, he will have studied the GRE formula, which we published last year and which we made available to every hon. Member. We shall do the same this year. Each local authority has its own printout of its calculations and it is possible for hon. Members to see the way in which the formula is put together. It is obvious from the question by the hon.

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Member for Workington that this is the first time that he has heard of the formula being available for examination. We published it and every responsible Member should have read it.
Mr. Greenway: I am grateful to my hon. Friend because it puts the hon. Member for Workington (Mr. Campbell-Savours)——
Mr. Campbell-Savours rose——
Mr. Greenway: I shall not give way to the hon. Gentleman because I made my point clearly. It was based on a detailed study last year and this year of the figures to which he referred. It was unworthy of him to make that intervention.
I welcome the system and this year's settlement because the needs of London are recognised. A real term improvement in cash grant has been made for 1982–83 compared to 1981–82. I am particularly in favour of this year's GREA because the special needs of boroughs such as Ealing can be met by the increased weighting given to the proportion of the population that is non-white or non-United Kingdom born. I know that my hon. Friend the Member for Ealing, Acton will be concerned about that.
Ealing's GREA for 1982–83 more closely represents the needs of an authority that in some ways are more akin to those of an inner London borough than an outer London borough. It is commendable that the system is so flexible as to admit recognition of that important point. I am thinking of the needs in some parts of Ealing for extra teachers of English as a second language. It all costs money. The rate support grant allows for that. We are grateful. There are other relevant social and housing needs, which are covered in the settlement. We are grateful for that.
I congratulate Ealing council on meeting expenditure targets worked out with the Government for 1981–82 because that will be to the benefit of the borough and its ratepayers. The target set for 1982–83 leaves it only a 1 per cent. reduction in real terms to find—enough in itself, but small compared to that of almost everyone else.
Hon. Members will not be surprised to hear that Ealing is a Conservative-controlled council. Its efficiency has been achieved by well-run local government and other factors such as the selling of council houses and by crediting the housing revenue account with interest on receipts from those sales, which are expected to reach 2, 000 by the end of March.
Mr. Geoffrey Robinson: What receipts? There will be none.
Mr. Greenway: That can be worked out. I shall find out for the hon. Gentleman. That will be shown in the council's accounts.
Additionally, capital receipts from the disposal of surplus land for which there is no use, bought by previous Labour Administrations, have also been credited to the housing revenue account. Much of that surplus land was released quickly, when Ealing council was taken over by a Conservative Administration, to the private sector so that starter homes for private ownership could be built. That meant £10 million for the housing revenue account, employment for local people and more money in the form of rateable value for the rest of the local community.
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Last December, I had the pleasure of opening one of a number of houses. Land had been released just over a year previously, work started shortly after that, and within a year the houses were completed and people were living in them. That has been a great gain in local housing. All types of house have been built—low-priced, single-bedroom and larger units.
The borough's direct labour operations have also been streamlined and that has helped to balance the books. Direct labour is an area, if ever there was one, in which many authorities have been wasteful, overmanned and inefficient. Much remains to be done in areas other than Ealing, and even Ealing is not yet satisfied. Nevertheless, it has tightened up its direct labour operations substantially, to the great benefit of the community.
This has been a great success story, not one of pain and anguish as many would have us believe, and it is based on a fair system of GREAs, which penalises those authorities which have no care for tomorrow and are spendthrift with people's hard-earned rate payments. If Ealing had overspent by £1 million, the rates would have been increased by 4p in the pound. Ealing borough council has done its ratepayers a great favour by not doing that. Moreover, as a result of its efficiency, if there is any increase at all in the coming year's figures it will be small—contrasting sharply in the minds of people in Ealing and elsewhere with the 60 per cent. increase that took place in the penultimate year of the local Labour Party's last period of office.
The only threat to the smooth running of local authorities is the built-in pay increase of 4 per cent. allowed for in the GREAs. If the teachers, for example, settle for more than 4 per cent., the result will be either fewer teachers or an increase in rates. I am not arguing against the setting of pay targets. As has already been said, teachers' pay has increased by 58 per cent. since 1979. A 4 per cent. increase would be more than reasonable for them, and the same is true of other local government employees. They have benefited substantially in wage terms since 1979 and a wage target is reasonable for this and other years.
We should seriously consider hiving off this part of local authority expenditure and making teachers' salaries centrally funded. That would relieve local education authorities of an enormous financial responsibility that could seriously disrupt local finances if a large claim were awarded to teachers.
I wish to comment briefly on the way in which the GREA has affected advanced further education in Ealing. We have one of the best colleges in the country—the Ealing college of further and higher education—but I must draw my right hon. Friend's attention to a problem that has arisen. Unlike other areas of the rate support grant, the advanced further education pool does not penalise authorities which overspend. The Ealing college receives 80 per cent. of its funding from that pool. Because the pool is overdrawn nationally, Ealing has been asked to cut the college's funds by £500, 000 in the remaining two months of the current financial year. It is clear that authorities which refused to reduce their budgets have benefited at the expense of those such as Ealing which have done so. That is grossly unfair.
As an authority which pursues a definite policy of financial discipline for its colleges, Ealing must not be expected to pay for overspending or lack of budgetary discipline by other authorities. I say that straight and true

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to my right hon. Friend and ask him to consider it. Nor should Ealing be expected to pay because student numbers for 1982–83 are incorrectly calculated on out-of-date and partial statistics. For the grant system to work equitably, it must be adjusted to the actual number of students. At present, Ealing is understated by some £900, 000.
I have been strong in my comments as I wish to draw my right hon. Friend's attention to this. For those authorities exercising financial discipline and efficiency, the GREAs are certainly working, but in advanced further education, unfair irregularities must be ironed out urgently.
As a London Member, it would be wrong of me to participate in the debate without saying something about the profligacy of the GLC. [HoN. MEMBERS: "Come off it."' It is my duty and my business to defend the people of London, and particularly those of Ealing, North, who are being bled of hard-earned cash through the profligacy of the bunch of cowboys in control at county hall. My area is being subjected to a GLC rate increase of 90 per cent. The hon. Member for Ashfield, who has conveniently left the Chamber, talked about inflation and percentages. Let him take that on board.
Mr Newens rose——
Mr. Greenway: No, I shall not give way for a moment. A supplementary rate demand of £50, 000 for one building, which has since been quashed, helped to break the back of the Hoover factory in Perivale in my constituency. As we know, that factory is now closing and employees being made redundant. Therefore, when I hear people saying that rates have no bearing on jobs, I bridle strongly.
Mr. Newens: The hon. Gentleman should make that point to the Government.
Mr. Greenway: A small shop next door to the Hoover building received a supplementary rate demand, happily also quashed, of £1, 200. That, too, cost somebody's job. There is further proof of what I say.
The GLC has had to levy that higher rate because among other things it has established at least 50 jobs costing about £25, 000 each, many of them totally unnecessary and non-statutory. In addition, each of those 50 people probably has a personal assistant, a secretary, a telephone, office space, all the paper that is pushed around, a typewriter and so on—[Interruption.] That is not cheap. It costs a lot of money, and people who cannot afford to do so, such as the disabled and many others who find it hard to make ends meet, are being milked to pay for it. Hon. Members cannot say that it is cheap to play the county hall game and throw other people's money around in that way.
I cite another example. The Londoner, the paper that is pushed through everybody's door four times a year, costs around £500, 000 per year. Moreover, it contains nothing but Socialist propaganda, much of it of a low and unattractive kind.
Mr. Newens: The hon. Gentleman wants it to be more attractive?
Mr. Greenway: It could not be attractive. Following the first edition, I received letters from business men and from ordinary people protesting strongly and vigorously against it. I sent them on to county hall but one does not often get answers to letters to Mr. Livingstone.
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The GLC is establishing a job creation board costing £80 million. It has been said that every time there is an increase in a firm's rates of £5, 000, a job is lost. If one takes that as a rough figure and divides it into £80 million, the result is 16, 000. Therefore, the board needs to create 16, 000 new jobs to maintain the present position. What would happen if there were job creation at the rate established by the Labour Government of the late 1960s? Jobs were then costing £78, 000 a time, so today that £80 million would produce about 1, 000 jobs. Therefore, we are dealing with seriously diminishing returns.
Money is being granted to "weirdo" arts and many peculiar activities, such as the formation of a police committee costing £250, 000. The GLC has no remit to interest itself in the police. It has set aside over £1 million for the race relations committee. Heaven knows what that committee will do. The GLC has no remit on race relations. Therefore, one can understand why London people are so resentful about the way in which their rates are levied by the GLC.
If I had to end with an example of the sort of encouragement that business does not need to set up and produce real work, I should take the Brent local authority which is adjacent to Ealing. Houses stand side by side on the border of Brent and Ealing. A three-bedroomed house in Brent costs a ratepayer £600 a year while the house next door in Ealing, costs a ratepayer £300 a year. The difference speaks for itself. There are no better services in Brent and it is not such a nice place in which to live.
Finally, I hope that the Secretary of State will consider forcing the GLC directly to precept its rates so that it must go straight to the people on whom it makes these extravagant demands. It would get a direct crack back from them, which it deserves and needs.
7.53 pm
Mr. Stanley Newens: The hon. Member for Ealing, North (Mr. Greenway), at the end of his speech, indulged in a trivial and petty argument which was unworthy of him and the respect in which he is generally held in the House as a result of his contributions on education.
The hon. Gentleman earlier argued adequate financial support for his constituency, which he regards as having the problems of an inner city area, in contrast to his hon. Friend the Member for Basildon (Mr. Proctor), who attacked the distribution of the total rate support grant as giving additional funds to inner city areas. I am utterly opposed to the attempts to set inner city areas against shire counties as rivals. Both shire counties and inner city areas have needs and we should he setting out to meet both. I oppose the policy of ruthless cuts in public expenditure
A principal reason for the increase in rates this yew is the rate support settlement and the Government's cutbacks. It is all very well for the hon. Member for Ealing, North not to face that aspect and to talk about the GLC. His attacks should be directed at the settlement proposed by the Secretary of State.
The objective pursued by the Secretary of State since he accepted office has been the reduction of public expenditure. Although he was frustrated, with the help of some of his hon. Friends, on some of his methods, he has relentlessly continued towards the same goal. It is not difficult to win public approval for this policy as long as it is presented as an opportunity to pay lower taxes or rates

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it is presented as an opportunity to pay lower taxes or rates and provided that no one mentions the consequences. People will applaud a policy if they are unaware that they will suffer as a result.
Many members of the public are now waking up to the fact that cuts, far from being painless, are becoming increasingly irksome and fraught with real hardship. We now see a continuing and, in many ways, catastrophic decline in local government expenditure in real terms. More and more local authorities are forced to make cuts in education provision, facilities for the old and disabled, fire cover, road maintenance and in many other spheres. As my right hon. Friend the Member for Manchester Ardwick (Mr. Kaufman) stated, the more local authorities have been prepared to economise, the harder they have
It is not true that Labour authorities are extravagant and that Conservative authorities are prudent. The records of many Conservative authorities are just as open to criticism, as my right hon. Friend the Member for Ardwick demonstrated, on the criteria set by the Government.
The truth is that the system for determining and distributing the rate support grant is not an effective method of measuring and rewarding efficiency. That fact ought to be recognised.
It appeared earlier in this financial year that all areas characterised by rapidly expanding populations were being shabbily treated. Among them, the new towns were probably hardest hit. As the hon. Member for Basildon stated, that was recognised not merely by Labour Members, such as myself, but by Conservatives. I see the hon. Member for Basildon nodding in agreement.
As a result of certain changes, particularly the way housing income has been treated, the situation fortunately altered. I have not yet seen the letter to which the hon. Member for Basildon referred, but I shall be interested to study it. Consideration should be given to introducing into the formula for determining rate support grant a factor which would reflect the particular problems of new towns and other areas where there have been rapid population expansions.
It is frequently necessary, in order to provide for the needs of such populations, to incur heavy capital expenditure on the provision of amenities, at much higher interest rates than those prevailing in past years when other communities were able to provide those amenities for themselves.
When compared with old towns, the position of new towns is analogous to that of an owner-occupier who begins to buy his house today compared with an owner-occupier who began to buy perhaps 30 years ago. In those circumstances, it is wrong and, frankly, idiotic to regard new towns as expanding areas which are extravagant. Their expenditure is higher. The very character of their problems necessitates spending at a much higher level than is true for older communities.
Therefore, I hope that careful consideration will be given to the introduction of a factor in the formula for determining rate support grant which will reflect new towns' problems. However, in the present rate support grant settlement, among the worst hit of the authorities are certain county councils. I shall refer, as did the hon. Members for Harwich (Sir J. Ridsdale) and Basildon, to Essex, to where my constituency is situated.
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Essex has not been under Labour control in recent years, and its leaders have always claimed to be strong supporters of the Conservative Party and advocates of prudent expenditure. It is not possible to attack them as being responsible for extravagance or to blame the Labour Party for indulging in extravagant expenditure.
I have frequently been opposed to some of the policies of Essex county council. In some areas it has been prepared to aim at the standards that I and many of my Labour colleagues on the authority desire. I am critical of its failure to provide nursery education, of its lack of generosity with student grants and of the introduction of charges for many services that are available for the less well off. It has been quite wrong in not collecting transport supplementary grant to pass on to support the Epping-Ongar stretch of the Central line in my constituency. I am not intent on attacking the county council. I am merely showing that I speak of its present problems as one who cannot be regarded as an unqualified supporter of all that it has set out to do.
Having made that clear, it is fair to say that the way in which Essex has been treated is little short of disgraceful. The grant-related expenditure figure is the Government's assessment of the amount that an authority needs to spend to maintain a common standard of service. They set Essex's GRE at £450.7 million. However, the Secretary of State has set the target for Essex—the realistic and fair figure that would result in low rate increases—at £415 million—in other words, £36 million below the GRE.
Essex will receive £7 million less in 1982–83 than it received in 1981–82. The Secretary of State is requiring Essex to make draconic cuts equivalent to about £36 million. It cannot possibly carry out those cuts, even on the basis of the figures that have been provided by the Government, without a drastic reduction in services which would hit all Essex people very hard.
There is no equity in the Government's approach. Kent, with a similar population and area, will receive £60 million more than Essex. I appreciate that rateable values in Essex are higher than those in Kent and that Kent should receive more than Essex, but the disparity between the two counties cannot be explained adequately on that ground.
Earlier in the debate the Minister for Local Government and Environmental Services asked about the product of a 1p rate in Essex. He was implying—although the hon. Member for Basildon could not give him a direct reply—that the product had increased considerably. According to the figures that I have, the product of a penny rate in 1981–82 was £2, 309, 000. By 1982–83, it had increased to £2, 333, 000. It is true that it has risen, but the increase is nothing like the proportion that would be necessary to justify the way in which Essex has been treated in this rate support grant settlement.
The vote this evening will determine the position for this year, but the matter should not be left there. I shall vote against the rate support grant settlement, and I hope that Conservative Members who represent Essex constituencies will decide likewise. However, I suspect that even if they do, the Government will still have a majority. None the less, I hope that they will find the means of returning to the specific problems with which the Government have landed Essex. Ultimately, county ratepayers will be hit hard—let it be stated clearly—by the Government, not by any local authority or the Labour Party or the Conservative Party in the country. It is their responsibility. When I receive complaints about the level

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of rates, I shall reply that it is the Government who are to blame. I shall use that reply for industrial, commercial and domestic ratepayers alike. As the House knows, domestic, commercial and industrial ratepayers' circumstances concern me greatly.
Everybody knows that industry in Harlow is having a thin time. Everyone knows also that in many instances those who are engaged in small businesses are finding it difficult to continue their operations under this Government. In the circumstances, it is too much for the Government to saddle them with additional rate payments and then to blame local authorities. Responsibility for any cuts which take place in school transport, education provision, social services and other facilities will rest equally in the same quarter.
I shall oppose many of the cuts that the Essex county council may determine to implement. Having said that, I recognise the impossible position in which the county council has been placed by the Government. That is the message that the Under-Secretary of State should take to the Secretary of State and the Prime Minister. It comes from Opposition Members and Conservative Members representing Essex.
It will be no good the Under-Secretary of State, or whoever is to reply, saying "Next year, Essex will do better." What is Essex supposed to do during the current year? What will it do if services have to be cut? Services cannot be left in limbo. We cannot say to employees "Go away and come back for your wages in a year's time when we have a more favourable rate support grant settlement."
The Government have imposed a serious financial crisis upon Essex county council. They should not be allowed to get away with it. I hope that, even at this late stage in the debate, the Government will come forward with other proposals that will enable the people of Essex—whether supporters of the Conservative, Labour or any other party—to enjoy the standards to which they are entitled without having draconic rate increases imposed on them as a result of the Government's policies.
8.9 pm
Mr. Michael Brown: The hon. Member for Harlow (Mr. Newens) will forgive me, as a Northern Member, for not following the intricacies of the rate support grant and grant-related expenditure in his county. However, I am competent to speak about the situation in Humberside. The right hon. Member for Manchester, Ardwick (Mr. Kaufman) made a witty, interesting, knowledgeable and lively speech. We always enjoy the right hon. Gentleman's style. He made many jokes about GREs and the way in which the rate support grant settlement has affected counties and towns in Britain.
The right hon. Gentleman ranged far and wide around the country but he did not dare mention the county of Humberside. Only five or six days after the county council, Labour controlled since May last year, announced its rate increase, the right hon. Gentleman knows that it is no joke for the people of Humberside. The rate increase in Humberside is the second highest so far announced in the country.
I thought that the right hon. Gentleman might suggest, if he was being true to his argument, that the Government had withheld a certain amount of grant last year, as, indeed, happened. He knew, however, that he would be unable to get away with that argument. Nor can the Labour
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Party in the county use it. If it had been the case, the hon Members for Grimsby (Mr. Mitchell), Kingston upon Hull, Central (Mr. McNamara), Kingston upon Hull, East (Mr. Prescott), Kingston upon Hull, West (Mr. Johnson) and Goole (Dr. Marshall)—the five Labour Members of Parliament representing the county of Humberside—would have been present to criticise the Government. They are not present. They know, as the Labour Party in the county knows, that if they try to use the excuse that the Government have held back funds, the argument will not wash. They know jolly well that the reason for the 61 per cent. rate increase over last year when the Conservative administration left office is due to their own deliberate overspending and profligacy.
Before the local government elections, the Conservative administration, sadly to be defeated, had announced the last of four budgets that it had implemented in its four-year term of office between 1977 and 1981. The county council was at that time extremely well run.. Its leader in the early years was my hon. Friend the Member for Bridlington (Mr. Townend). As a result of pegging expenditure, it was able to reduce the rate last May. However, the electorate, for better or for worse—it knows now definitely for the worse—returned a Labour county council. That happened through apathy. The first action of the Labour county council was to lump on a supplementary rate last October. Not content with that. the county council last Wednesday rendered many constituents and myself speechless. That is not normally a condition in which I find myself, as you, Mr. Deputy Speaker, will know. I have now recovered my speech. I also had the opportunity last weekend to assess the real cost of the rate increase.
I have read in the Scunthorpe Evening Telegraph a statement by the managing director of BSC Scunthorpe on the cost of the rate increase to BSC Scunthorpe just at a time when the steelworks is in profit following many years of problems. I can only say "God help them". The rate of the Scunthorpe borough council—another Labour-controlled authority with which I have to live—has yet to be announced. I predict that it is bound to show an increase over last year.
For the Humberside county council rates alone, BSC' Scunthorpe has to find £3 million. In steel debates in the House, Opposition Members are always anxious, rightly in my view, to point to the additional costs and burdens imposed on the British Steel Corporation in Scunthorpe and elsewhere. A burden of £3 million at this sensitive time can only cost jobs. An irate road haulage operator came to see me at my surgery last Saturday morning. The rate increase means that he will have to find an extra £15, 000. I managed to extract the figure from him only after I had foolishly asked the cost to his company of the rate increase. His first response, when I asked him the cost to his company, was "Two jobs". Throughout the county of Humberside, firms ranging from the British Steel Corporation to the small businesses will be making people redundant because they cannot bear this extravagant burden.
Mr. Dennis Skinner: Is the hon. Gentleman aware that the Government, during nearly three years in office, have caused more than 20, 000 bankruptcies, some of them perhaps in the hon. Gentleman's constituency? Is he aware therefore that one of the main reasons for high rates for commercial,

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industrial and domestic hereditaments is that there are fewer industrial and commercial concerns that can forward money to the Exchequer? The jam is spread much thinner.
Mr. Brown: I cannot accept the hon. Gentleman's argument in relation to Humberside, the county about which I am competent to speak. The hon. Gentleman defeats his own argument. If the British Steel Corporation has to find £3 million to meet the rate increase, that sum will determine whether or not it is viable in the future. I predict that it is the rates that will be the straw that breaks the camel's back: it will break industrial ratepayers. As inflation falls, industrial and commercial ratepayers will find that rates are the largest single burden of costs. This will create the self-defeating cycle that the hon. Gentleman predicts.
There is no excuse, other than profligacy, for the increase in rates in the county of Humberside. When the Labour county council was returned to power it issued marvellous press releases stating that it would create 600 jobs, that it was taking on people and that it would put up the rates. This happened in one of the most depressed areas of the country. Grimsby and Hull both face the problems that afflict the fishing industry and Scunthorpe faces the difficulties associated with the steel industry. At least the hon. Member for Bolsover (Mr. Skinner) takes the problem seriously. The hon. Member for Grimsby and hon. Members representing the Kingston upon Hull constituencies to which I have already referred have been conspicuous by their absence. They know that the rate increase cannot be blamed on the Government.
I cannot speak for Essex. I accept the logic of the arguments of the hon. Member for Harlow. The Humberside county council, Labour controlled, has simply created jobs out of nothing. They are bogus jobs. I suspect that they have been created at the cost of destroying far more jobs, running into several thousand in the industrial and commercial sectors, as a result of the rate increase. There is no question but that Humberside has to trade off services against rates or rates against what the county alleges it loses from the Government. The county council has announced that it will not pay rate increases. It wants to defend its own employees before anything else. The county council has no regard for the industrial and commercial prosperity of the region that pays the salaries of its work force. The county council is deceiving and deluding its own work force. The county council sees itself as nothing more than a self-perpetuating, job-creating agency for 3, 000 or 4, 000 people.
Last week, when announcing the rate increase, the county council stated that it was a question of either putting up the rates by 61 per cent. or losing 3, 000 jobs in county hall. I should like to know what those 3, 000 people are doing in county hall. I want to know what contribution they are making. I am quite sure that, as individual council employees, they all do very good work; but we must be absolutely honest about this and not hide behind the skirts of the old arguments that we must not attack council employees. I do not attack them as individuals. I am sure that all of them, in their own way, do a very good job for their employers, the Labour-controlled Humberside county council. My point is whether their jobs are necessary in their present form.
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I should like to know what additional benefit ratepayers in Humberside are receiving today that they did not have 12 months ago now that 600 more people are working in county hall. All that the commercial ratepayer or the householder living in my village receives is the rates bill and he has to sign the cheque or increase his overdraft to meet it.
Mr. Dan Jones: I am sorry to intervene at this point, Mr. Deputy Speaker, because I want to speak myself in a moment or two, but surely the hon. Member should realise that the responsibility is not that of the employees at all; it belongs to those who manage the town hall. That is where the responsibility must lie.
Mr. Brown: I completely accept the responsibility, or rather the irresponsibility, of the Humberside county council in taking on people when there is no money to pay for them except by extracting vast sums from industry which is already hard pressed in the harsh, cold reality of the world outside.
The only point at which I part company with my right hon. Friend the Secretary of State is that I submit that Humberside county council, acting like latter-day highwaymen, like pirates, literally confiscating money from people who have no option but to pay, has abrogated its responsibility and acted in an irresponsible way. Earlier this afternoon my right hon. Friend said that he had resisted the temptation to impose targets on authorities. He said he wanted to preserve their freedom. I submit that the freedom of the so-called democratically elected Humberside county council has been abrogated, together with its responsibility.
I urge my right hon. Friend seriously to reconsider the decision not to set targets in the case of my own county council, for that is the only way in which we may be able to preserve the steel industry, under threat once again after doing its best in the last two years to become competitive. At the end of last year it showed a profit, and now all its forecasts are to be tossed aside because of the irresponsibility of the spendrift and profligate Labour-controlled local authority.
8.23 pm
Mr. Arthur Palmer: The hon. Member for Brigg and Scunthorpe (Mr. Brown) will forgive me. He could not follow my hon. Friend the Member for Harlow (Mr. Newens), coming from further north, and equally it would be difficult for me to follow him, because I want to speak about the affairs of Avon county council. I have been longing to do this for quite a time. Before Christmas we had a kind of "dawn raid" by hon. Gentlemen who are not in their places, the Conservative Members for Bristol, West (Mr. Waldegrave) and Bristol, North-West (Mr. Colvin). I also regret what I hope is the temporary absence of the Minister for Local Government and Environmental Services, the right hon. Member for Bridgwater (Mr. King) because Bridgwater, of course, is very close to Bristol and to Avon. This "dawn raid" was a very wild attack on the Avon county council, now Labour-controlled, for being a spendthrift authority, the argument running along the lines to which we are all too accustomed at the moment.
As a Bristol Member of Parliament—Bristol was an excellent county and city in its own right at one time—I was never enthusiastic about the creation of Avon county

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council. This was done, of course, by a Conservative Government. The hon. Member for Brigg and Scunthorpe forgets that if there is overlapping, if there is too much bureaucracy in county council work in relation to district council work, it is the fault of that Conservative Government who established these authorities. It very often means—and I am sure that the hon. Member for Southend, East (Mr. Taylor) at least will agree with me—that no jobs are lost at district level and extra jobs are always created at county level. That is where the responsibility lies, with the Conservative Party, which made this possible.
We have this in Avon. In Bristol we had one of the finest all-purpose local authorities in the country, a city and a county in its own right, and we had put round us this ring fence of Avon. The Conservative Government of the time abolished Rutland but created Avon. It was rumoured that this was intended to put a Tory cordon around the traditionally Labour-controlled city of Bristol. At the last county council election, however, the ring fence was broken through; the Labour Party secured for the first time in the short history of Avon a majority on the county council.
Now apparently, under Labour, Avon has committed a crime. It has committed the crime of carrying out the programme on which the Labour Party was elected. It is doing this, as far as I can judge—and I have a letter, from the county treasurer, from which I shall quote in a moment—with as much economy as is reasonably possible. What is the charge brought against Avon by the present Administration, and by the Minister? It is that Avon is carrying out the programme on which the majority of its members were recently elected and is not carrying out the programme of the Conservative Government, elected in 1979.
It is all part of democracy, and I do not complain too much about it, but the Avon county council has been the subject of a sustained campaign of vilification by the local press and local industry because of the rate increases. I shall come on in a moment to the practical reasons for those increases. As I say, the burden of the complaint has been that the voters of Avon have no right to have the programme for which they voted carried out, and that the county council must be content simply to carry out the programme on which the Government were elected three years ago.
What are the results of the Government's policies? Figures released this morning show that this country's industrial output is now less than it was 15 or so years ago. Indeed, it is less than it was during the three-day working week. I do not know whether that is a triumph of Conservative economics and financial policies, but it seems to me that those in Bristol who say that they speak for local industry would help their own businesses and employees if they protested against the Government's monetarist and credit policies, which are ruining this country's industry. However, the Bristol chamber of commerce and the local representatives of the Confederation of British Industry complain about the burden of county rates instead.
I met the CBI local spokesmen last summer on what was a very pleasant evening, both outside and inside. They were most courteous. We discussed many subjects, including the difficulties that were placed in their way when seeking loans for productive investment. But they
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said not a word to me about the local rates creating unemployment. I think that that was because it had not then become the fashion to do so.
When the representatives of local industry recently talked to the leaders of the Avon county council they were asked to tell the council what cuts should be made. Those representatives, by the way, never said a word when the council was Conservative-controlled. Do they now want cuts to be made in education, on which they depend so much for the training of their employees? Do they want the cuts to be made in expenditure on the roads? As those roads were maintained, or not maintained, by the previous Conservative majority, they were nothing less than a disgrace. Does local industry accept that? I was interested in what the hon. Member for Brigg and Scunthorpe told us about his road haulier who talked about the high level of his rates. Did he also complain about the condition of the roads? These things are not in separate compartments.
We often hear employer complaints about excessive local government spending, but I have recently received letters and circulars from the building construction industry and the architects of Bristol and district. The architects are particularly noisy on the subject, saying that there is not enough local government expenditure to sustain the balanced level of building and construction locally. They are right but they cannot have it both ways.
As an answer to what Conservative Members for the city of Bristol said some time ago I want to read front a letter I received from the county treasurer of Avon, at my request. He writes in the rather flat style which is typical of local government officials—very clear, of course, but with no poetry about it:
"I would like to draw your attention to the following points:—

A.The major factor in the need for the Supplementary Precept was the loss of £12.4 million Rate Support Grant.

B.Even without the additional expenditure proposals approved by the newly elected Council, the County would have suffered a Grant loss of £10.2 million."

I am glad to see that the Minister for Local Government and Environmental Services has returned to the Chamber, because I am talking about a county next to his own, which he knows very well.
The letter continues:
"C. Even with the additional expenditure proposals, the County plans to spend less in real terms than in the 1978/79 base year which the Secretary of State has arbitrarily chosen as his target."
The county treasurer adds, bitterly, I think:
"This contrasts with the growth in Central Government expenditure of over 7% in the same period."
Why should the Government demand that local authorities cease to put right the neglect of years before? Why should they object to local authorities carrying out the programme on which they were elected, when the Government are apparently incapable of carrying out their own programme in the matter of Government expenditure?
I have also received some figures, with which Ministers will be familiar, for the average domestic rate payment per household by county in England, expressed in pounds per week. It is interesting to note that Avon—so much attacked, criticised and vilified for its so-called spendthrift policies—is well down the list. Indeed, there are 14 Conservative local authorities that are spending more per household than Avon. I would draw that to the attention of the Minister.
When the county treasurer wrote to me he enclosed an article that appeared in Local Government News. I wish to

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quote one paragraph because it raises an interesting constitutional point. I am sorry it is a little long but I did not write it. It was written by a learned professor, Professor John Stewart. He says:
"Once central government has committed itself to targets for individual local authorities, it has crossed a constitutional divide. It has moved from a concern at the national level into an area which is not its responsibility but is the responsibility of individual local authorities. The danger is that with central government committed to targets, alleged failure to achieve those targets is seen by central government as defiance. Yet a local authority failing to achieve a target is a local authority carrying out its proper responsibility to determine its own level of expenditure or its own judgment of local needs. It is merely that its judgment, in its proper area of concern, differs from central government's judgment in an area that is not its area of concern."
There is a fascinating international thing about this Conservative Government not of the Centre but of the Right; some might say of the extreme Right. Across the Channel in France, where there is a Socialist Administration under President Mitterrand the traditional central control of local government by Paris is being steadily 'relaxed. From the point of view of French democracy that is excellent. On this side of the Channel, under a Government of a very different political outlook, centralised control of local government is being strengthened all the time.
I should like to ask the right hon. Gentleman one question that should provide an interesting answer. If it is right for a Conservative Government to compel local authorities to cut expenditure to fit in with the national programme of priorities, will it be right for a Labour Government to compel local authorities to increase expenditure where they are neglecting social needs? What is sauce for the goose should constitutionally be sauce for the gander.
8.39 pm
Mr. Neil Thorne: I listened with interest to the hon. Member for Bristol, North-East (Mr. Palmer). I shall not comment on his speech immediately, because I hope to develop later one or two points that he mentioned.
My hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) said that he was not competent to follow the speech of the hon. Member for Harlow (Mr. Newens). I am sorry that the hon. Member for Harlow is not in his place, because I should have liked to make one comment to him. I understand his concern for Essex. It is proper for him to advance the cause of that authority. However, I do not share his concern to the same degree, because my constituency, now forming part of the London borough of Redbridge was liberated from that county under the London Government Act 1963.
I am sad to say that we have only just received permission for our town centre scheme after 30 years of effort. Rightly or wrongly, the feeling in the local council was that Essex county council was doing all that it could to stop the advancement of our scheme before 1963 because it felt that if we obtained permission for it and expanded, as we expected to do—as had Croydon, East Ham, West Ham and other authorities nearby—we could have applied for county borough status and had we received it, our rateable value would have been removed
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from the Essex county council. I do not therefore have too much sympathy for Essex county council today, because we had so much trouble getting our scheme under way.
I support what the Government are trying to do in getting the public sector borrowing requirement under control. One of my major regrets is that the Government did not get the public sector borrowing requirement under control quickly enough. Many of my constituents who have small businesses and who are paying exorbitantly high interest rates on their borrowings felt that local government was having too long a honeymoon with the Government after they came to office. I know that it was not easy to achieve control over local government expenditure, which now accounts for much of our national expenditure. I served on the Committee on what became the Local Government, Planning and Land Act 1980. It took some time for the Government to get the necessary power to do what they were elected to do. Because of that, it was over two years before the Government were fully able to implement what the electorate undoubtedly elected them to do in the first place.
I was interested to hear the hon. Member for Isle of Wight (Mr. Ross) express his interest in a form of industrial derating. Many years ago, our predecessors realised how important industry and commerce were to the well-being of the country in general and in providing employment. If my memory serves me correctly, they provided a derating system that made those industrial ratepayers pay only a quarter of their total assessment. I do not advocate a return to that system, but it demonstrates the feeling in the Chamber during those years that it is important to provide the right environment for employment.
I have heard it said that, however high local rates are raised, one is talking only about 1/2 per cent. to 3/4 per cent. on a firm's bill. That may appear to be a small figure, but, when one considers it overall and realises that the majority of business enterprises now produce only about 3 per cent. profit, 1/2 per cent. to 3/4 per cent. is a substantial proportion. Undoubtedly it can mean the difference between survival and bankruptcy for firms oprating on those margins.
Mr. Palmer: In making that balance, does the hon. Gentleman allow for the services that industry receives from local government in the form of roads, sewerage, waste collection and education? Those are gains to industry for which it should pay.
Mr. Thorne: The hon. Gentleman has got it wrong. Sewerage charges are paid through the water rates, not through general taxation. Industry must pay separately for its rubbish to be removed and it must pay substantially for its transport. The road fund tax that it pays goes into the Government's coffers and is more than enough to pay for road maintenance. The examples that the hon. Gentleman advances are not correct, because industry and commerce do not receive the benefits that he mentioned out of that expenditure.
For this reason, I should like taxation of commercial and industrial property to be transferred to central Government. The rate should be levied so that it is paid into central Government coffers and the services provided and adminstered by local government should be funded by central Government. For example, my right hon. and learned Friend the Member for Runcorn (Mr. Carlisle) suggested that education charges should be covered by the

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Government. That would be ideal. In addition, the police and fire services should follow suit and be dealt with in this way.
Rates for industry should be on a common basis. It is wrong that a firm, employing a large part of the labour force of an area should pay perhaps twice the rate poundage of another firm on the other side of the road. It is in the interests of the Government to preserve and foster employment as they are left to pick up the bill for greater unemployment through unemployment and social security payments. It is wrong that there should be such a variation in' the level of charges to industry.
However, local government should have a fair measure of decision-making of its own. I do not believe that everything should be taken over by central Government, but, like the hon. Member for Bristol, North-East, I am concerned to ensure that this does not happen. I fully support what the Government are trying to do, but the method that has been adopted is not the best. If local people elect a particular type of local government, then the cost of their decision should fall upon the electors' heads, and they, particularly in the residential sector, have a right to determine what they will pay as local taxes.
The Government will soon have to examine rating revaluation. No one has suggested that the industrial and commercial sectors should not have some form of local property taxation. I have been pressing Ministers for some time to bring us up to date because the longer we leave revaluation the worse will be the disparity among different areas. Here I should declare an interest as a chartered surveyor. Rateable value should be assessed on the same basis throughout the country. If this is done properly it will be possible to compare equally different parts of the country—for example the North with the West, or the Midlands with the South-East. There should be a common basis, but the longer the revaluation is left the worse the situation will become.
I hope that the Government will soon take some decision on whether there will be a capital or a rental basis for the commercial sector. The Government will then have to decide what they will do about the residential sector, and whether the present system will be replaced in total or in part. Various systems have been suggested, including a form of poll tax, and there is a possibility that the existing type of rating should be continued.
However, I hope that the reform will not be on the lines of the present system. It is far too expensive to rate every residential property individually. I should like a type of banding valuation. Moreover, it would avoid the bad feeling that is generated when people improve their properties. If people improve their properties by adding an extra room or central heating, they resent the fact that it will affect the local tax that they pay. I know that certain exemptions have been introduced in recent years to prevent that from happening automatically. Nevertheless, the valuation officer still has to carry out a valuation in each case to establish whether the limit has been reached. It is an enormous waste of civil servants' time and energy, and it is wrong to penalise people for modestly improving their private residence.
I applaud the Government for introducing the Green Paper. I am glad that they are consulting widely on this matter, and I hope that they will quickly reach a decision so that we may know what form local taxation will take in future and how it will be administered.
8.51 pm
Mr. Guy Barnett: In spite of all the protestations of the hon. Member for Ilford, South (Mr. Thorne), he made a highly centralist speech, first by suggesting that education and other services should be centrally funded, and secondly by suggesting that firms operating in an area should pay not rates but taxes to central Government.
I value the fact that firms pay rates to local authorities, because it means that those firms have the right to knock on the door of the local authority and demand the roads and other services that they need for the successful pursuit of their business. Moreover, the local authority then has an incentive to improve the environment in which business can operate.
No doubt there have been times in our history when local authorities have paid too little attention to the needs of local industry. However, during the past few years there has been strong evidence from many parts of the country that local authorities now recognise that if they do all that they can to encourage the development of local industry and increase the rateable value of that industry the community as a whole stands to gain. Moreover, many' local authorities now recognise the value of encouraging local industry as a means of alleviating local unemployment.
The speech of the hon. Member for Ilford, South reflects several of the speeches that I have heard this evening. In some ways, it is a sad commentary on the Government's policy and legislative programme for local government since they took office. I recall the Second Reading debate on the Local Government, Planning and Land Bill, when I predicted that the inevitable consequence of that legislation would be the necessity to discuss the detailed policies of local authorities on the Floor of the House. The ultimate consequence of that legislation and the Local Government Finance (No. 2), Bill which is now in Committee, is that decisions which in the past have been taken by local authorities are now taken by the Government.
Last night I was present at a meeting of the social services committee of the London borough of Greenwich. I and many other people were protesting at the threatened closure of the Vanbrugh day nursery in my constituency. The crowd there included single-parent families w ho are heavily dependent on the nursery because, without it, they could not go out to work and they would then be dependent on unemployment benefit, and in many cases supplementary benefit, too. The nursery has a high priority in my constituency.
A councillor told me that it was no good going to the meeting, because the grant had been cut by £2 million. He said that the council was having to make cuts. He said that the priorities were right, but that the budget had been cut in such a way that one would be justified in protesting only to the Secretary of State for the Environment and to the Secretary of State for Social Services. He said that they—and not the councillors—had made the decisions. The councillors did not want to make those decisions. They wanted to keep the nursery open. However, given the budgetary situation, there was nothing that they could do to alter the decisions. I hope that the nursery will stay open, but nevertheless that is an illustration of the difficulties facing local authorities as a consequence of the Government's centralist policy.

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There are other and more dangerous implications of the way in which the Government have assessed the grant-related expenditure. In the debate on Second Reading of the Local Government Finance (No. 2) Bill I said that the grant-related assessment for my borough was roughly £36 million and that the spending level during the current year was about £50 million. If an element is allowed for inflation, if the borough is to retain the services that it now operates, it will need to spend about £55 million. The target figure that the Government have chosen from goodness knows where is £48 million. That means an overspend of £7 million.
Greenwich is described as an overspending authority, yet the House will recall that in the Local Government, Planning and Land Act there is a requirement on local authorities to describe, according to certain formulae, the cost of running their services. During his speech the Secretary of State compared the cost of services run by one authority with those run by another. There is an incredible situation in my borough. We are told to compare the services of my borough with those run by other inner London boroughs. Greenwich is described as an overspending borough.
I want to compare the expenditure figures for Greenwich with the average figures for inner London. For instance, the net annual cost of providing all council services for every 1, 000 of the population in Greenwich is £222, 291. The inner London average is £318, 131. In Greenwich, the figure for rent arrears, as a proportion of the rent collectable for the year, is 4.5 per cent. I make no criticism, but the figure for Lewisham is 12.4 per cent. and for Southwark 8.48 per cent. I do not know the circumstances, but no one could describe Greenwich as an inefficient borough on that basis.
Let us take the cost of libraries. The net annual cost of library services for every 1, 000 of the population is £8, 494 in Greenwich. The inner London average cost is £12, 302. I could go on to describe case after case to show how Greenwich compares favourably with the inner London average. The number of administrative staff for every 1, 000 of the population in personal social services in Greenwich is 0.90. The inner London average is 1.12. The net annual cost of personal social services for every 1, 000 in Greenwich is £77, 086. The inner London average figure is £103, 857. Last month the Minister pointed out that Greenwich's needs may be different from those of other boroughs. He said:
"The hon. Member for Greenwich (Mr. Barnett), in referring to comparisons of GREs, spoke only of standards of service. He will know that, like the previous needs assessment, the size of the client groups also influences the overall GRE per head—a point that perhaps he did not take fully into account in his contribution."—[Official Report, 18 January 1982; Vol. 16, c. 112.]
I did take that into account. The difference between the needs element and the present situation is that the grant-related assessment expenditure figure has been invented by the Department of the Environment and is not in any sense objective. I wish that the Minister would understand that under the previous system of multiple regression analysis there was some objectivity, because that figure was related to and in part determined by expenditure levels by groups of local authorities as a whole.
That is the essential difference between the system being operated now and that operated under multiple
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regression analysis. In some of the speeches that I have heard there has been almost a feeling of "Come back multiple regression analysis, we need you." The incredible system now being operated results in the absurdities mentioned by many hon. Members and which are also true of my local authority. The Under-Secretary of State, Lord Bellwin, will see a deputation from my local authority soon. I hope that they will carefully examine together the systems implications for my authority and for other authorities. Local government, as I understand that phrase, will become increasingly impossible to operate.
9.1 pm
Mr. Kenneth Lewis: When my small county of Rutland was taken over by, or pushed over into, Leicestershire, some years ago, I said that the modest rates that we then paid would escalate. They did. Indeed, as far as I can see they will continue to escalate.
People said that I should not worry because everyone would get more for their money. The area was supposed to lack services. For example, I was told that the area was somewhat short of services for mental defectives. I did not think that anyone thought that we had any mental defectives unless some people put the Member of Parliament or other politicians in that category. Those in my district would tell the Minister today that services have not improved, or have been only so slightly improved as to be hardly noticeable. In recent years many people think they have decreased. I suppose that we are all experts on rates and taxes, because we all have to pay them. I believe there should be a balance between the rates paid and the services provided. I am not one of those hon. Members who say that rates must be kept so low that services wither away. I like my district and county councils to provide reasonable services. By and large, my area gets them. It is extraordinary that some councils have managed with rate increases that are within the rate of inflation and that some have even managed with rate increases that are below the rate of inflation. One of my councils, Lincolnshire, will increase rates this year by a figure that is below the rate of inlation. In Leicestershire, however, rates will increase by about 30 per cent. One wonders why one council spends so much more than another.
What is most extraordinary is that many of the councils in areas where unemployment is highest and where industry is having the greatest difficulty are the ones that are putting their rates increases through the roof. I wish to make two brief pleas to the Ministers who are struggling with this problem. I congratulate them on that struggle because it is a difficult problem. Their objective must be to press down in order to bring reason back into the system, because reason has gone out of the system in recent years.
My first plea to the Ministers and to those who are running the councils, if they have ears to hear—the plea has been already made by a number of my hon. Friends—is that it is vital that industry should not have to carry on with this built-in burden that increases every year. I wonder whether hon. Members appreciate that rates are the largest tax imposed on industry. In many cases, industry has to pay little or no corporation tax. Industry is encouraged by Government not to pay corporation tax because it is allowed to write off all manner of investment to avoid paying that tax. Is it recognised that, in money terms, rates are twice as high as the national insurance surcharge? That position has only developed in recent

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years. National insurance surcharge was introduced as a tax. Like all taxes, once it is introduced it is difficult to get rid of it. It is now built into the system although I hope that the Chancellor of the Exchequer will do something about it in his Budget speech. However, the fact remains that national insurance surcharge is now less than the burden imposed on industry through rates.
High rates on industry and commerce mean fewer jobs. Therefore, unless councils are realistic and understand that they must keep rates down for industry, there will be more and more unemployed. The unemployed then go on to the dole and become another burden on the rates because once they claim social security they have the advantage of rate rebates. Therefore, there is a vicious circle of unemployment leading to a greater burden placed upon the local councils because they have to finance some of that unemployment. All these problems arise because rates are too high on industry and it is forced to shed jobs.
My second plea is that in the coming grant considerations—we had a second review last year, and we may have a second review this year—the Ministers should bear in mind that councils that are doing their best should be encouraged. Good councils should continue to be encouraged because the councils we want to assist are those that are economical and those that have a fair balance between good services and reasonable rates.
9.8 pm
Mr. Dan Jones: I do not intend to speak for more than five minutes, in deference to the needs of the Minister of State. I would not speak at all if it were riot for the fact that I wish to bring to the attention of the House what I honestly believe to be an injustice.
The Secretary of State has found for Blackpool about £9 million in grant. He has found for Burnley about £5 million in grant. That is a difference of £4 million.
In terms of economic advantage to the country, Burnley is of greater value. Since before this century, Burnley has regularly produced what the country wanted. There was an occasion when two Labour Ministers came to Burnley wanting a change from textiles to other industries. They thought that Burnley would profit by that change of industrial structure. The unions wanted it, but the work force preferred, and stuck to, textiles.
On the other hand, Blackpool has constantly been a seaside resort. I have nothing against Blackpool, but I believe that the Ministers should analyse the figures and find out if they bear any relation to justice. I do not think they do.
The people in Burnley are extraordinarily moderate. Since I have been there they have never been on strike. Were that so everywhere, I would boldly say that the country would be in a finer economic position than now. I hope that the Ministers are taking heed of that instead of whispering to one another.
Burnley has made a handsome contribution to the country for a long time. It must be reasonable to believe that, as it has had over 100 years of industrial experience, the town has achieved a certain standard. As a consequence I should like the Minister to examine the figures that show that Blackpool has an advantage of £4 million over Burnley. He should give me an answer about the authenticity of the figures and their justice.
9.12 pm
Mr. Teddy Taylor: I am sure that Ministers and Opposition spokesmen appreciate that rate support grant orders are never popular. This order involves a reduction of the Government's contribution from 59.1 per cent. to 56 per cent., which makes it especially unpopular. It represents a direct increase in taxation in a roundabout way.
The Secretary of State will be fully aware that, apart from the complaint about the general reduction about which everyone is concerned, the redistribution on top of that and the hammering of other authorities involves injustice. I hope that he will accept that there is injustice in the figures for Essex.
We accept that for all authorities the rate support grant order will involve special problems and increased rates. However, the Minister must also accept that Essex is suffering a further blow amounting to about £71/2 million, which appears to be unjust.
I should like the Minister to explain to the ratepayers of Essex why there has been a further redistribution in the formula. Ratepayers in Essex, particularly Southend, find it difficult to understand why the redistribution gives a significant bonus to substantial parts of inner city areas and to many authorities that have openly been defying the Government in all their policies.
The ratepayers of Essex find it hard when they hear leaders of the Greater London Council announcing that. although they have increased spending by 50 per cent.. they still think that some ratepayers in the GLC area will have their rates cut this year because of a substantial increase in Government grant. How can that be fair? We know that both Labour and Conservative Governments are often accused of rigging the rate support grant so that their friends are helped. However, the Minister will appreciate that there is no possibility of the present Government being accused of that. They have hammered those who supported Government policy 100 per cent. and gone out: of their way to give a bonus to those who flouted and openly defied it.
It is also difficult to understand why a special bonus is given to areas which have suffered from race riots. If expenditure in connection with race riots is to be disregarded under the formula, is the Minister suggesting that if towns in Essex had had some race riots they could have enjoyed a significant bonus?
The Minister will know that Southend has led Britain in its policy of privatisation, prudence and enterprise. As a result, last year it was able to cut the borough rate. The Minister may not know, however, that only yesterday it was announced that the borough has frozen its rates for this year. Having reduced its rates last year, it has managed, despite inflation and a cut in Government grant, to hold its rate this year. That unique achievement is largely the result of our policy of privatisation, which has achieved a major saving for the ratepayers, better services and higher wages for those employed in the services.
How can the people of Southend be happy when, having achieved that miracle of local government efficiency and reorganisation, they are told the next day that the average ratepayer in Southend will be paying about £1 per week more next year, not because of any failure on their own or the borough's part, but because the Government have introduced a policy which especially hammers Essex?

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I recently moved from Glasgow to Southend in circumstances of which most hon. Members are aware. [HON. MEMBERS: "And nearly had to go back. Yes, I almost had to go back, but I now enjoy Southend very much. Having moved to Essex from Glasgow, I have been very conscious that Southend is in no way a lavish authority which wastes money. My children go to school in Southend, and I was surprised to find that this year they had a horrifyingly long Christmas holiday, but their summer holiday has been cut to five weeks, making it very difficult for the average person to fit in holiday arrangements. That had to be done simply to save money on heating schools during the Christmas period. Unlike Glasgow, Southend has no local authority nursery schools because it simply cannot afford them in its budget. I can find no area in which there is waste, although there must be some. Certainly, it seems to be an astonishingly prudent council compared with my previous area, although the rating burden seemed lower to me as a householder.
Essex is especially hammered, first, because it has been prudent in the past and thus has not the same scope for cutting. Secondly, rateable values are high. That problem is largely historic as there has been no revaluation south of the border for a long time, and an area such as Essex with many new properties clearly suffers. The Minister will have heard from the excellent speeches of my hon. Friends the Members for Harwich (Sir J. Ridsdale) and Basildon (Mr. Proctor) and from the hon. Member for Harlow (Mr. Newens) that Essex has a justifiable grievance. I hope that the Minister will accept that there has been injustice to Essex, and especially to Southend which went out of its way to cut rates last year and to freeze them this year, despite having to pay more for the county rate. I hope that the Minister will accept that there has been injustice and will tell us that he intends to do something about it.
9.19 pm
Mr. Gordon Oakes: It is astonishing that this debate is and has been throughout so ill-attended by hon. Members of all parties. I should tell the Secretary of State, who has not been present a great deal himself, that hon. Members on both sides have been conspicuously absent. As the right hon. and learned Member for Runcorn (Mr. Carlisle) said, we are discussing one quarter of public expenditure in this country. Our discussions affect every hon. Member because we all have a local council relying on us to deal with and to debate grants with the Government. Therefore, it is astonishing that this debate is so ill attended.
That is not because hon. Members on either side of the House are uninterested in what is happening. They merely pick up the three or four documents issued by the Government on the rate support grant, read them, consider the "multipliers", which mean six decimal figures against their own authorities, and find that they cannot understand a word that has been presented to the House. That is the truth of the matter. When debating the Local Government, Planning and Land (No. 2) Bill in 1980, I remember the Secretary of State saying that he was introducing a new system to simplify matters. That statement was similar to what my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) said earlier, about the right hon. Gentleman's clarification.
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There is a smokescreen over the important issues. The important issues have been mentioned by hon. Members on both sides of the House, particularly by my hon. Friend the Member for Ashfield (Mr. Haynes). In a brilliant and compassionate speech he referred to a 68-year-old constituent who has a mother of 96 years of age and does not have a home help. That is what the debate is about, and that is the essential nature of our discussions.
My hon. Friend the Member for Greenwich (Mr. Barnett) referred to a nursery school. He was told that the borough had no more money to spend upon it.
I hope that hon. Members on both sides of the House will not be put off or terrified by what the hon. and learned Member for Hemel Hempstead (Mr. Lyell) called "gobbledegook" and what the hon. Member for Isle of Wight (Mr. Ross) called "jargon". The essential nature of our discussions is the bread and butter issue of deprivation in local authorities that results from the Government's actions in successive rate support grants.
As my right hon. Friend the Member for Ardwick said, the only mention of grant abatement that is made in any of these documents is in the rate support grant order for next year. That suggests that provision will be made in the Local Government Finance (No. 2) Bill.
To this minute local authorities have no idea what is going on or, when fixing their budgets, what will happen. It may be said that a Bill is going through Parliament, but it is not yet law. As we say in Lancashire, "There is many a slip betwixt cup and lip." There have been so many slips "betwixt cup and lip" on this issue that it is almost unbelievable. Clause 4 of the Local Government Finance (No. 2) Bill is not as it was referred to when the rate support grant paper was written. A completely different clause has been introduced as the result of an amendment proposed by the hon. Member for Hornchurch (Mr. Squire). We debated the new clause 4 at the last meeting of the committee.
My right hon. Friend the Member for Ardwick and I would dearly love to quote the debate that took place last Thursday in the course of moving the amendment to clause 4. The rules of the House, of course, rightly do not permit that. However, I have news for the House. The amendment to clause 4 that we debated last Thursday is now old hat. Further amendments, as I understand it, have been tabled today by the Government. Therefore, we shall discuss yet another clause 4 when we meet on Thursday. The Government have created confusion for local government and Opposition Members—indeed, for the whole House. In the rate support grant settlement we are dependent on legislation that has not been passed or finalised.
The truth is that the Government do not really know what they want to do. That is why we have the ridiculous discrepancies between authorities that hon. Members on both sides of the House have quoted in the debate.
There are two crucial considerations to be applied to the rate support grant settlement for England for 1982. Some hon. Members have discussed them, but they have been avoided by many because of concern for individual authorities and concern about all the gobbledegook to which the hon. and learned Member for Hemel Hempstead referred. However, the crucial considerations were taken up by the right hon. and learned Member for Runcorn, who is my near neighbour. Our constituencies share an authority. I was delighted to hear the right hon. and learned Gentleman speaking again from the Back

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Benches. His speech, though loyal to the Government, was constructively critical. It was not an example of the whining speeches that we sometimes get from ex-Cabinet Ministers who have lost their positions. Far from it. It was a good Back-Bench speech.
The right hon. and learned Member for Runcorn fairly said that one of the crucial issues in the RSG is the reduction in Government moneys from 59.1 per cent. to 56 per cent. That means that local authorities will get less Government money. They will have to cut their vital services or increase their rates, or both. Nearly every authority, Labour or Conservative, has received less, cut vital services and increased its rate. Authorities have cut their services to the bone, yet have had to increase their rates.
Crocodile tears have been shed by Conservative Members on behalf of the poor ratepayer, especially the industrial ratepayer. The hon. Member for Ealing, North (Mr. Greenway) even suggested that Hoover closed because of the high level of rates. That was an astonishing suggestion. Apparently, the closure had nothing to do with the recession. We were told that it was the local authority's rate that closed the company. The reality is that the Government are forcing local authorities to increase their rates for domestic, industrial and commercial ratepayers. That is what happens when the Government reduce the rate support grant settlement by 3.1 per cent. If the Government had real concern for ratepayers, let alone the spending needs of local authorities, they would have adopted a policy that operated in the reverse direction.
The previous rate support grant was based on the assumption that the rate of inflation for local authorities would be 6.7 per cent. That assumption has never been altered. Indeed, it has not been altered in the supplementary report. The Government know that that is a fictitious figure. I am talking not about deterring future expenditure but about past expenditure. The Minister for Local Government and Environmental Services knows that the current rate of inflation is about 12 per cent. and that wage settlements made during the year have been considerably in excess of the figure set by the Government. That is history.
The same ridiculous assumptions are being made for next year's rate support grant. Are the Government saying that when they decided upon 9 per cent. for the whole of next year they sincerely believed that inflation next year would decrease to 9 per cent. or lower? Do they believe that now? Even the most optimistic figures suggest that the rate of inflation will be about 10 per cent. by the end of the year. Local authorities will have to pick up the tab for that. We cannot judge local authority expenditure fairly on the ordinary cost of living index. The index that is relevant for local authorities is totally different from that for ordinary families. For example, if food prices moderate, that movement will be reflected in the cost of living index and families will benefit, but that will not have a great impact on local authorities. Fuel price increases, for example, have a great effect on local authorities. Local authorities are affected just as much as industry. Only yesterday we heard that gas prices are to be enormously increased during the next 12 months. Most schools and local authority offices are heated by gas. Post and telephone charges are a major item of expense for local authorities. They do not have much effect on the ordinary cost of living index, but they have an enormous effect on local authorities' expenditure. The price of school
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textbooks has increased. For years inflation has raged in education expenditure. Some schools have no books worthy of the name. Instead of books being beautiful objects to handle they are old, tattered ruins. That has a terrible psychological effect on children and on the way in which they approach books.
The inflation faced by local authorities is totally different from that faced by ordinary families. But the Government take no account of that. They do not even take the ordinary cost of living inflation into account. Not only have the Government reduced the total grant from 59.1 per cent. to 56 per cent., but they have added the further burden on local authorities of a false rate of inflation built into the order. The local authorities either have to make cuts or increase rates.
The Secretary of State says that it is necessary to take these stringent measures because one can see from the expenditure per head of population, or per thousand, how much the figures differ between authorities. Surely, he says, there is room for pruning down and prudence. He gave a number of examples of differences in local authority expenditure per thousand people. What, therefore, will the Minister say to my hon. Friend the Member for Greenwich? That exemplary authority in the London boroughs and the South-East of England has figures that are better than most of the other boroughs. But, lo and behold, according to the Secretary of State, it is an overspending authority. What can one do to satisfy the Secretary of State?
My right hon. Friend the Member for Ardwick referred to the rate for the red areas of East Sussex, Essex and Wiltshire, which are, presumably, deliberately overspending. I concentrate on Essex because there are a number of hon. Members from that county—the hon. Members for Basildon, for Southend, East (Mr. Taylor) and for Harwich (Sir J. Ridsdale) and my hon. Friend the Member for Harlow (Mr. Newens)—all of whom are loyal to their county. They spelt out to the Government the evil and insane effects of the present rate support grant figures. My hon. Friend the Member for Harlow spoke on behalf of a Conservative-controlled county council because he is a democrat. He does not believe in its policies but he believes in democracy and the right of Essex to spend its money in its own way. Essex has not been an imprudent authority, yet it is placed in a deplorable and disgraceful position. Whatever else the Minister does, he must explain to the House, and to the people of Essex, how the county has offended the Secretary of State so much that it should be so cruelly treated by him, after having tried its very best, as so many have done, to follow the dictates of the Secretary of State. As my right hon. Friend said, the more one tries to follow the dictates of the Secretary of State, the harder one is hit as a result.
The right hon. and learned Member for Runcorn introduced a breath of common sense when he stated that, in his opinion, as a former Secretary of State for Education and Science, it is impossible to go further with education cuts. I am sure he is right. As a former Minister of State for Education I agree that education cannot be exempted. Two-thirds of expenditure by local authorities goes on education. The right hon. and learned Gentleman gave a clear warning, however, that one cannot cut further. Yet, when the totality of the rate support grant is cut, that is precisely what the Government are doing. Two-thirds of the burden will inevitably be borne by education.

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The right hon. and learned Gentleman also asked what was meant by overspending and argued that the policy could not be pursued on a historical basis. I am sure that the right hon. and learned Gentleman is right. All the anomalies that arise in the difference between grant-related expenditure and targets result from the Government trying to act on a historical basis.
Mr. Mark Carlisle: I stated that it would be wrong to cut further on the limit of relevant expenditure for education which I accept is that proposed when I was Secretary of State for Education, including the additional £60 million cuts that the Prime Minister announced. I was not suggesting that it had been cut further. I stated, however, that I would oppose any further reduction in that level of expenditure.
Mr. Oakes: I agree. I hope that I did not misinterpret the right hon. and learned Gentleman. Inevitably, as a result of this rate support grant settlement, education, like other services, will be cut due to the reduction in the total amount of money given to local authorities and the built-in figures for inflation, which are false figures.
My hon. Friend the Member for Blaydon (Mr. McWilliam) and the hon. Member for Isle of Wight made the valid point that we should stop kicking councillors. They perform an extremely useful service. It is no use blaming the media for the attack on local government. The attack on local government is led by the Government and by Conservative Members. They are the first to call all local authority workers bureaucrats. They are the first to suggest that all councillors, Tory or Labour, are hell-bent on overspending and being profligate with ratepayers' money. They lead the attack.
It is wrong, however, for hon. Members to imply that local government is wasteful. It is not half so wasteful as central Government. It is not half so wasteful when decisions are made on the spot by elected local people rather than by civil servants in Whitehall. Yet the whole idea of grant-related expenditure is precisely a case of officials, people, or a computer, taking decisions. It may sound unbelievable, but I understand from my right hon. Friend the Member for Ardwick that it is an American computer. I wonder whether the Minister can explain why we need an American computer to work out this matter. Are the complications of the rate support grant so horrendous that no British computer can deal with the matter and we need an American space age computer for this purpose?
I am pleased that the hon. Member for Basildon will vote with his feet by joining us in the Lobby tonight. I do not agree with his remarks about his hon. Friend the Under-Secretary of State and the responsibilities that he has been given. The Minister has a difficult job. It is an important job. We on the Opposition Benches wish him well. I do not like to hear an hon. Gentleman attacked before he has even started a job. Despite my strictures, I welcome the hon. Member for Basildon into our Lobby. I wish that other Conservative Members would act as honestly as the hon. Member for Basildon and join him in our Lobby.
We have heard from a number of authorities. I am not going to go into the specific complaints of different authorities. Suffice it to say that, from the debate we have heard tonight, this is a bad report and a bad rate support
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grant. It is illogical and totally mean and will bring a great deal of distress to many needy and disabled people in this country. I hope that this House votes resoundingly against it.
9.41 pm
The Minister for Local Government and Environmental Services (Mr. Tom King): I start by agreeing with one thing: this has certainly not been the best attended debate I have ever seen in the House of Commons. One may draw certain conclusions from that. I do not pretend that rate support grant orders are the most thrilling stuff of which Parliament is made, but they are often a barometer of unhappiness and disquiet about some aspects of these matters.
As has been said very fairly, in every settlement—and this point was made to the right hon. Member for Manchester, Ardwick (Mr. Kaufman)—anomalies and difficulties are inevitable. This happens every year. Certain authorities feel very disaffected by the settlements. Every year, therefore, there are safety nets and changes are made to try to protect authorities from the more extreme variations.
We are discussing three motions. The first is on the Rate Support Grant (Increase) Order 1982, for the year 1980–81, in which we have confirmed that, in view of the overspend outturn in that year, we shall be withholding the £200 million which my right hon. Friend the Secretary of State intimated on an earlier occasion would probably be the case; therefore, it covers £84 million, in connection mainly with adjustments for interest and loan charges. We have confirmed the position with regard to the transitional arrangements affecting certain authorities and have said that we shall be writing to those authorities with those amendments which my right hon. Friend has made in the light of the representations that they have made to us.
We also have before us the Rate Support Grant Supplementary Report (England) 1982, for 1981–82, involving £122 million of grant on higher loan charges and the updating of certain of the grant-related expenditure assessments. We have confirmed that we shall be laying before the House a further supplementary report for 1981–82 to confirm and clarify, after the clarification of the legal situation, the whole of the back arrangements for those in excess of volume targets and GREs in 1981–82.
The main matter before us is the Rate Support Grant Report (England) 1982–83. This involves, against an estimated £20.5 billion of public expenditure, the allocation of £11.5 billion of grant, spread among just over 400 local authorities. I recognise that this is a tough settlement. As my right hon. and learned Friend the Member for Runcorn (Mr. Carlisle) said in a most impressive and valuable contribution, it involves a 3 per cent. reduction in the rate support grant. Even with the increased public expenditure allowance that we have made, it is still a tough public expenditure target for local authorities, and, of course, it involves a tight cash limit.
However, included within it are the targets, which we believe are fairly based, to encourage further progress in local government expenditure towards greater value for money, economy and efficiency, about which I shall say something shortly. As my right hon. Friend the Secretary of State said, against the background of the targets that we have set, it is highly significant how many local authorities are now hitting our targets.

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Last year 279 out of 413 authorities were able to hit or almost to hit those targets. Those authorities were spread widely over all classes, whether metropolitan districts, London boroughs, or shire counties. They do not include metropolitan counties, but the other classes all made a contribution.
I do not think that the hon. Member for Blaydon (Mr. McWilliam) was listening to the speech of my right hon. Friend the Secretary of State. My right hon. Friend paid tribute to the many people in local authorities throughout the country who have tried to play their part in achieving our public expenditure targets. The hon. Gentleman called for my right hon. Friend to say something nice about those who were playing their part. My right hon. Friend has regularly paid tribute from the Dispatch Box to those authorities that are achieving their targets.
I should like to make clear to some of my hon. Friends who have been concerned about the matter that, of course, the targets are tough. Some have believed that inability to hit targets is an automatic indictment of an almost criminal offence. We have made it clear that the targets collectively represent the overall target that needs to be achieved if local government is to carry out its proudly repeated claim of matching national public expenditure figures.
We have set the highest spenders higher targets, but we have realistically taken into account the maximum reductions that they can make. Others may then have to make their contribution if the overall targets are to he achieved. But we have tried fairly to limit this within a reasonable range. That is why we have set the targets within the range of 1 per cent. to 7 per cent. The highest-spending authorities are on a 7 per cent. reduction, and the figure goes down to 1 per cent. and even in certain cases to a zero reduction where expenditure is significantly below the volume target and grant-related expenditure.
Having put forward our original proposals, we listened to the representations of the local authority associations and made a number of changes. We increased the public expenditure figures for local government by more than £1 billion. Nobody can say that that was not listening to representations from local government. Moreover, we have exempted from the holdback provisions those authorities which are below our GREs, once again, in response to representations. I hope that hon. Members will acknowledge that we have tried to respond to representations which we thought were valid.
I should like to say a quick word about GRE. The hon. Member for Woolwich, East (Mr. Cartwright) again ran that dangerous course for the SDP of coming perilously close to making a policy statement. He tiptoed round the course with great delicacy, but it appears that the old rate support grant system, with all its crudity, unfairness and across-the-board treatment, had certain attractions.
I have here the copy of the document that will be available in the Library and the Vote Office for every hon. Member to consider the GRE formula for this year, in the same way as we published it last year, showing its breakdown. That was not possible with the old multiple regression analysis. Only three people in my Department understood it—not one alone, but the three together in combination were able to give a full explanation. The document, together with the sheet available in each of their local authorities, sets out for hon. Members the GRE for each local authority—the categories and the allocation
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made against each one. That is a much more comprehensible system for those hon. Members who wish to understand it.
I have often said that a document distributing £111/2 billion around 413 local authorities is not a child's mathematics paper. It is a complicated matter. We are making a genuine attempt to do it in a way that is open and available for discussion and debate. I invite hon. Members who are concerned about the GREs of their authorities to study the documents and to start discussions with us and with their local authorities now. It is not much good starting discussions in October or November, when the die is cast. This is the time when discussions will start on next year's rate support grant settlement. Because we have made the information available, we welcome people who wish to make their contributions.
Mr. Dan Jones: Will the right hon. Gentleman give way? I shall be only 10 seconds.
Mr. King: No, I am sorry; I have very little time.
We shall seek to continue to improve the workings of GRE. In one respect the introduction next year of the full details of the 1981 census will be of benefit, particularly to expanding counties where there have been problems. My hon. Friends who represent constituencies in Essex and Hertfordshire are concerned about these population figures, as are representatives of the expanding county of Buckinghamshire. The figures will be helpful to all these authorities.
Some hon. Members referred to rating reform, which is not a subject for this debate. We have published a Green Paper. My right hon. and learned Friend the Member for Runcorn, my hon. Friend the Member for Harwich (Sir J. Ridsdale) and my hon. Friend the Member for Ilford, South (Mr. Thorne) referred to the possibility of the transfer of some element of education expenditure to the national Exchequer. I see in an article in The Sunday Times that my right hon. Friend and I have undertaken
"a task to make strong men cringe with horror: between them they are preparing to 'consult' every single Conservative MP, individually, about rating reform."
Neither my right hon. Friend nor I cringe with horror at that prospect. We are always delighted to speak to cur colleagues and to other hon. Members.
Mr. Dan Jones: Would the right hon. Gentleman speak to me now?
Mr. King: May I ask the hon. Gentleman to forgive me because I have very little time?
In regard to the moves we have made in the rate support grant this year, my right hon. and learned Friend the Member for Runcorn encouraged us to pay greater attention to GRE. He will recognise that in giving exemptions in GRE this year we have given, as it were, the supremacy of position to GRE even though we still have the volume element within the targets.
I agree very much with what my right hon. and learned Friend said about teachers' pay. Some hon. Members have criticised the cash limits in the rate support grant settlement. My right hon. and learned Friend drew attention to the fact that since 1979 teachers' pay has gone up by 58 per cent. On his estimate, it is not unreasonable to expect teachers to look on 4 per cent. as a not unacceptable provision. That is the provision that is included within the rate support grant of local government

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as a whole. If some people get more, others are liable to have to make do with less. So I do not accept the overall 4 per cent. as an unreasonable provision.
My hon. and learned Friend the Member for Hemel Hempstead (Mr. Lyell), my hon. Friends the Members for Watford (Mr. Garel-Jones), for Southend, East (Mr. Taylor), for Harwich and for Basildon (Mr. Proctor) and the hon. Member for Harlow (Mr. Newens) referred to Hertfordshire and Essex. There are two issues in regard to which the problems are similar. I shall deal first with the case of the new towns. I know that the hon. Member for Harlow and others represent the concern about the GRE for new towns. We do not accept on the evidence that there is a case for changing the GREs, but we are prepared to have discussions to see whether there is some way in which in next year's settlement we can cover aspects of new towns which are not properly reflected. I have written to my hon. Friend the Member for Basildon about it, and I confirm my offer to have discussions.
My hon. and learned Friend the Member for Hemel Hempstead supported the overall need to control public expenditure but expressed concern about the situation in his county. We have welcomed the discussions which we have been able to have with him, with his hon. Friends and with the county council. I know that they are concerned to play their part in the overall need to reduce public expenditure. I understand that they have been hit by the cut in the grant percentage. That has affected all authorities, but it has a particular effect on high resource authorities such as Hertfordshire and Essex. In both cases I hope that all hon. Members will recognise that the majority of their district councils have done rather better. If we take the district councils into account, the grant share for Essex has changed from 2.82 per cent. to 2.81 per cent. That cannot be said to be a massive slaughter of the grant share.
The new census data will be helpful to authorities in high-growth areas. I know that Hertfordshire and Essex are concerned about the clawback that might be operated. I have better news for them, because there is every prospect that the clawback this year will be very small or even nonexistent.
My hon. Friend the Member for Basildon decided that he would register a protest about the appointment of my hon. Friend the Under-Secretary of State for the Environment to have special responsibility within the Department for ethnic minorities, with which my Department is already involved. I could not disagree with his comments more. It is a part of our responsibilities that we intend to discharge to our full capacity. My hon. Friend the Member for Basildon may object to my hon. Friend saying that he has an open door to members of ethnic minorities, but he should know that that is not discrimination. It has been the policy of my right hon. Friend the Secretary of State and all Ministers to keep as open a door as possible to everyone. Since part of that open door policy included opening it to representatives of the hon. Gentleman's county council, who visited us at their request, I hope that he will support an open door policy in all areas.
We have tried to put before the House a rate support grant settlement that we believe is fair and that, while being tough, recognises the reality of the present economic position. We have had many comments from members of
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the Labour Party about the way in which they would approach local government. There have also been criticisms of the Government. There seems to be a muddle. I have had the pleasure of reading the press release from the Leader of the Opposition, which is not entirely in line with some of the policies put forward by the right hon. Member for Ardwick. The Leader of the Opposition stated the need to achieve greater independence for local government. The hon. Member for Bedwellty (Mr. Kinnock), who is now the Opposition's education spokesman, is launching proposals to remove control of education expenditure from local authorities. He insists that the present system is not working and that centralisation is the only answer. That may come as a shock to the hon. Member for Greenwich (Mr. Barnett), who took great exception to what my right hon. Friend the Secretary of State said about that.
It seems to have been an unhappy conference for the Labour Party. It was not chaired by the hon. Member for Crewe (Mrs. Dunwoody), who was unkindly described in The Guardian Diary last Friday as "John Golding in Drag". There is an extraordinary story about the wing of the party to which the right hon. Member for Ardwick is attached which was described as the
"For God's sake stop talking about socialism—there's an election coming"
wing. Apparently that wing of the party, which includes people such as the right hon. Member for Leeds, East (Mr. Healey), the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and the right hon. Member for Ardwick has been jumping up and down on the right hon. Lady the Member for Lanark (Dame Judith Hart). That sounds like an extremely painful performance, but apparently they did so because she was threatening not to chair the Labour Party's local government conference. There was then a risk that it would be chaired by the hon. Member for Sheffield, Brightside (Miss Maynard). Not only did it involve the right hon. Member for Sparkbrook, but his mum Enid, the lord mayor of Sheffield, who might have walked out. [HON. MEMBERS: "Answer the debate."]
The
"For God's sake stop talking about socialism, there's an election coming"
wing of the party has now been joined by the leader of Lambeth council. Hon. Members will have noticed that there is no more talk about increased expenditure in Lambeth or of tree sculptors and poets on the rates. There is rather talk of tough cash limits, because there is a fear of facing the electorate. No longer are Labour local authorities trying to ignore the ratepayers. In a desperate attempt to curry electoral favour, they are seeking to claim that they are the real protectors of the ratepayers.
As my hon. Friend the Member for Ealing, North (Mr. Greenway) said, there has been a 90 per cent. increase in the GLC rate, a 35 per cent. increase in Avon, a 52 per cent. increase in Nottinghamshire, a 61 per cent. increase in Humberside, and a 66 per cent. increase in West Yorkshire. That does not give Labour councils credentials for claiming to be the friends of the ratepayers.
It is against that background that the Government are seeking to protect employment and to fight for industry in these areas. In the knowledge of the damage that Labour councils are doing, we have sought to preserve a sensible approach to local government expenditure, to give authorities, where they so wish, the opportunity to apply low rates, and to ensure that where authorities are prepared

231
to pursue economic policies it is possible for them to levy low rates. I am delighted by the efforts of a considerable number of authorities this year. I only wish that a number of Labour authorities would follow that example.
It is against that background that the Government put the rate support grant before the House. I commend the settlement.
Resolved,
That the Rate Support Grant (Increase) Order 1982, a copy of which was laid before this House on 28th January, be approved.
That the Rate Support Grant Supplementary Report (England) 1982, a copy of which was laid before this House on 28th January, be approved.
Question put,
That the Rate Support Grant Report (England) 1982/83, a copy of which was laid before this House on 5th February, be approved.
The House divided: Ayes 306, Noes 252.

Division No. 68]

[10.02 pm

AYES

Adley, Robert

Cope, John

Alexander, Richard

Cormack, Patrick

Alison, RtHon Michael

Corrie, John

Amery, RtHon Julian

Costain, SirAlbert

Ancram, Michael

Cranborne, Viscount

Arnold, Tom

Critchley, Julian

Aspinwall, Jack

Crouch, David

Atkins, RtHon H. (S'thorne)

Dean, Paul (NorthSomerset)

Atkins, Robert (PrestonN)

Dickens, Geoffrey

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

Dorrell, Stephen

Baker, Kenneth(St.M'bone)

Douglas-Hamilton, LordJ.

Baker, Nicholas (N Dorset)

Dover, Denshore

Bell, SirRonald

du Cann, Rt Hon Edward

Bendall, Vivian

Dunn, Robert (Dartford)

Benyon, Thomas (A 'don)

Durant, Tony

Benyon, W. (Buckingham)

Dykes, Hugh

Best, Keith

Eden, Rt Hon Sir John

Bevan, David Gilroy

Edwards, RtHon N. (P'broke)

Biffen, RtHon John

Eggar, Tim

Biggs-Davison, SirJohn

Elliott, SirWilliam

Blackburn, John

Emery, Sir Peter

Blaker, Peter

Eyre, Reginald

Body, Richard

Fairbairn, Nicholas

Bonsor, SirNicholas

Fairgrieve, SirRussell

Boscawen, Hon Robert

Faith, MrsSheila

Bottomley, Peter (W'wich W)

Farr, John

Bowden, Andrew

Fell, SirAnthony

Boyson, Dr Rhodes

Fenner, Mrs Peggy

Braine, SirBemard

Finsberg, Geoffrey

Bright, Graham

Fisher, SirNigel

Brinton, Tim

Fletcher, A. (Ed'nb'ghN)

Brittan, Rt. Hon. Leon

Fletcher-Cooke, SirCharles

Brooke, Hon Peter

Fookes, MissJanet

Brotherton, Michael

Forman, Nigel

Brown, Michael (Brigg&Sc'n)

Fowler, Rt Hon Norman

Browne, John (Winchester)

Fox, Marcus

Bruce-Gardyne, John

Fraser, Peter (South Angus)

Bryan, Sir Paul

Fry, Peter

Buck, Antony

Gardiner, George(Reigate)

Budgen, Nick

Gardner, Edward (SFylde)

Bulmer, Esmond

Garel-Jones, Tristan

Burden, SirFrederick

Gilmour, RtHonSirlan

Butcher, John

Glyn, DrAlan

Cadbury, Jocelyn

Goodhart, SirPhilip

Carlisle, Kenneth(Lincoin)

Goodlad, Alastair

Carlisle, RtHon M. (R'c'n)

Gorst, John

Chalker, Mrs. Lynda

Gow, Ian

Channon, Rt. Hon. Paul

Grant, Anthony (HarrowC)

Chapman, Sydney

Gray, Hamish

Churchill, W.S.

Greenway, Harry

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

Grieve, Percy

Clark, Sir W.(CroydonS)

Griffiths, E. (B'ySf. Edm'ds)

Clarke, Kenneth (Rushcliffe)

Griffiths, Peter Portsm'thN)

Clegg, Sir Walter

Grist, Ian

Cockeram, Eric

Grylls, Michael

Colvin, Michael

Gummer, JohnSelwyn

232

Hamilton, Hon A.

Moore, John

Hamilton, Michael (Salisbury)

Morgan, Geraint

Hampson, Dr Keith

Morris, M. (N'hamptonS)

Hannam, John

Morrison, Hon C. (Devizes)

Hastings, Stephen

Mudd, David

Havers, Rt Hon Sir Michael

Murphy, Christopher

Hawkins, Paul

Myles, David

Hawksley, Warren

Neale, Gerrard

Hayhoe, Barney

Needham, Richard

Heath, Rt Hon Edward

Nelson, Anthony

Heddle, john

Neubert, Michael

Henderson, Barry

Newton, Tony

Heseltine, Rt Hon Michael

Normanton, Tom

Hicks, Robert

Nott, Rt Hon John

Higgins, Rt Hon Terence L.

Onslow, Cranley

Hill, James

Oppenheim, Rt Hon Mrs S.

Hogg, HonDouglas (Gr'th'm)

Osborn, John

Holland, Philip (Carlton)

Page, John (Harrow, West)

Hooson, Tom

Page, Richard (SW Herts)

Hordern, Peter

Parkinson, Rt Hon Cecil

Howe, Rt Hon Sir Geoffrey

Parris, Matthew

Howell, Rt Hon D. (G'ldf'd)

Patten, Christopher (Bath)

Howell, Ralph (NNorfolk)

Pattie, Geoffrey

Hunt, David (Wirral)

Pawsey, James

Hunt, John (Ravensbourne)

Percival, Sirlan

Hurd, Rt Hon Douglas

Peyton, Rt Hon John

Irving, Charles (Cheltenham)

Pink, R. Bonner

Jenkin, Rt Hon Patrick

Pollock, Alexander

JohnsonSmith, Geoffrey

Porter, Barry

Jopling, Rt Hon Michael

Prentice, Rt Hon Reg

Joseph, Rt Hon Sir Keith

Price, Sir David (Eastleigh)

Kaberry, Sir Donald

Prior, Rt Hon James

Kellett-Bowman, MrsElaine

Pym, RtHon Francis

Kershaw, Sir Anthony

Raison, Rt Hon Timothy

Kimball, Sir Marcus

Rathbone, Tim

King, Rt Hon Tom

Rees-Davies, W. R.

Kitson, Sir Timothy

Renton, Tim

Knight, MrsJill

Rhodes James, Robert

Knox, David

Ridley, HonNicholas

Lamont, Norman

Ridsdale, SirJulian

Lang, Ian

Rifkind, Malcolm

Langford-Holt, SirJohn

Rippon, RtHonGeoffrey

Latham, Michael

Roberts, M. (Cardiff NW)

Lawrence, Ivan

Roberts, Wyn (Conway)

Lawson, Rt Hon Nigel

Rossi, Hugh

Lee, John

Rost, Peter

LeMarchant, Spencer

Sainsbury, HonTimothy

Lennox-Boyd, HonMark

St. John-Stevas, Rt Hon N.

Lester, Jim (Beeston)

Shaw, Giles (Pudsey)

Lewis, Kenneth (Rutland)

Shaw, Michael (Scarborough)

Lloyd, Ian (Havant & W'loo)

Shelton, Willam (Streatham)

Lloyd, Peter (Fareham)

Shepherd, Colin (Hereford)

Loveridge, John

Shepherd, Richard

Luce, Richard

Shersby, Michael

Lyell, Nicholas

Silvester, Fred

Macfarlane, Neil

Sims, Roger

MacGregor, John

Skeet, T. H. H.

MacKay, John (Argyll)

Smith, Dudley

Macmillan, RtHon M.

Speed, Keith

McNair-Wilson, M. (N'bury)

Speller, Tony

McNair-Wilson, P. (New F'st)

Spence, John

McQuarrie, Albert

Spicer, Jim (WestDorset)

Major, John

Spicer, Michael (S Worcs)

Marland, Paul

Sproat, lain

Marlow, Antony

Squire, Robin

Marshall, Michae (Arundel)

Stainton, Keith

Mates, Michael

Stanbrook, lvor

Maude, RtHon Sir Angus

Stanley, John

Mawby, Ray

Steen, Anthony

Mawhinney, DrBrian

Stevens, Martin

Maxwell-Hyslop, Robin

Stewart, A. (ERenfrewshire)

Mayhew, Patrick

Stewart, Ian (Hitchin)

Meyer, SirAnthony

Stokes, John

Miller, Hal (B' grove)

Stradling Thomas, J.

Mills, lain (Meriden)

Tapsell, Peter

Mills, Peter (WestDevon)

Taylor, Teddy (S 'end E)

Mitchell, David (Basingstoke)

Tebbit, Rt Hon Norman

Moate, Roger

Temple-Morris, Peter

Monro, SirHector

Thatcher, Rt Hon Mrs M.

Montgomery, Fergus

Thomas, Rt Hon Peter

233

Thompson, Donald

Warren, Kenneth

Thorne, Neil (Ilford South)

Watson, John

Thornton, Malcolm

Wells, Bowen

Townend, John (Bridlington)

Wells, John (Maidstone)

Townsend, Cyril D, (B'heath)

Wheeler, John

Trippier, David

Whitelaw, Rt Hon William

Trotter, Neville

Whitney, Raymond

van Straubenzee, Sir W.

Wickenden, Keith

Vaughan, DrGerard

Wiggin, Jerry

Viggers, Peter

Wilkinson, John

Waddington, David

Williams, D.(Montgomery)

Wakeham, John

Winterton, Nicholas

Waldegrave, Hon William

Wolfson, Mark

Walker, B.(Perth)

Young, Sir George (Acton)

Walker-Smith, Rt Hon Sir D.

Younger, Rt Hon George

Wall, Sir Patrick

Waller, Gary

Tellers for the Ayes:

Walters, Dennis

Mr. Anthony Berry and

Ward, John

Mr. Carol Mather.

NOES

Abse, Leo

Dean, Joseph (Leeds West)

Allaun, Frank

Dewar, Donald

Alton, David

Dixon, Donald

Anderson, Donald

Dobson, Frank

Archer, Rt Hon Peter

Dormand, Jack

Ashley, Rt Hon Jack

Douglas, Dick

Ashton, Joe

Douglas-Mann, Bruce

Atkinson, N.(H'gey,)

Dubs, Alfred

Bagier, Gordon A.T.

Duffy, A.E.P.

Barnett, Guy (Greenwich)

Dunn, James A.

Barnett, Rt Hon Joel (H'wd)

Dunnett, Jack

Beith, A.J.

Dunwoody, Hon Mrs G.

Bennett, Andrew (St'kp'tN)

Eadie, Alex

Bidwell, Sydney

Eastham, Ken

Booth, RtHonAlbert

Edwards, R.(W'hampt'n S E)

Boothroyd, MissBetty

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

Bottomley, RtHonA. (M'b'ro)

Ellis, Tom (Wrexham)

Bray, Dr Jeremy

English, Michael

Brown, Hugh D. (Provan)

Ennals, Rt Hon David

Brown, R. C. (N'castle W)

Evans, loan (Aberdare)

Brown, Ronald W. (H'ckn'yS)

Evans, John (Newton)

Brown, Ron (E'burgh, Leith)

Ewing, Harry

Buchan, Norman

Field, Frank

Callaghan, Rt Hon J.

Fitch, Alan

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

Flannery, Martin

Campbell, Ian

Fletcher, Ted (Darlington)

Campbell-Savours, Dale

Foot, Rt Hon Michael

Canavan, Dennis

Ford, Ben

Cant, R. B.

Forrester, John

Carmichael, Neil

Foster, Derek

Carter-Jones, Lewis

Foulkes, George

Cartwright, John

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

Clark, Dr David (S Shields)

Freeson, Rt Hon Reginald

Cocks, Rt Hon M. (B'stolS)

Garrett, John (NorwichS)

Cohen, Stanley

Garrett, W. E. (Wallsend)

Coleman, Donald

George, Bruce

Concannon, RtHon J. D.

Gilbert, Rt Hon Dr John

Conlan, Bernard

Ginsburg, David

Cook, Robin F.

Golding, John

Cowans, Harry

Graham, Ted

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

Grant, George(Morpeth)

Crawshaw, Richard

Grant, John (IslingtonC)

Crowther, Stan

Grimond, Rt Hon J.

Cryer, Bob

Hamilton, James (Bothwell)

Cunliffe, Lawrence

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

Cunningham, G. (IslingtonS)

Hardy, Peter

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

Harrison, Rt Hon Walter

Dalyell, Tam

Hattersley, Rt Hon Roy

Davidson, Arthur

Healey, Rt Hon Denis

Davies, Rt Hon Denzil (L'lli)

Heffer, Eric S.

Davies, Ifor (Gower)

Hogg, N. (EDunb't'nshire)

Davis, Clinton (HackneyC)

Holland, S. (L'b'th, Vaux'll)

Davis, Terry (B'ham, Stechf'd)

HomeRobertson, John

Deakins, Eric

Homewood, William

Question accordingly agreed to.

234

Hooley, Frank

Pavitt, Laurie

Horam, John

Pendry, Tom

Howell, Rt Hon D.

Penhaligon, David

Howells, Geraint

Powell, Raymond (Ogmore)

Hoyle, Douglas

Prescott, John

Huckfield, Les

Price, C. (Lewisham W)

Hughes, Mark. (Durham)

Proctor, K. Harvey

Hughes, Robert (Aberdeen N)

Race, Reg

Hughes, Roy (Newport)

Radice, Giles

Janner, Hon Greville

Rees, Rt Hon M (Leeds S)

Jay, Rt Hon Douglas

Roberts, Albert (Normanton)

John, Brynmor

Roberts, Allan (Bootle)

Johnson, James (Hull West)

Roberts, Ernest (Hackney N)

Johnson, Walter (Derby S)

Roberts, Gwilym (Cannock)

Jones, Rt Hon Alec (Rh'dda)

Robinson, G. (Coventry NW)

Jones, Barry (East Flint)

Rodgers, Rt Hon William

Jones, Dan (Burnley)

Rooker, J.W.

Kaufman, Rt Hon Gerald

Roper, John

Kerr, Russell

Ross, Ernest (Dundee West)

Kilfedder, James A.

Ross, Stephen (Isle of Wight)

Kilroy-Silk, Robert

Rowlands, Ted

Kinnock, Neil

Ryman, John

Lambie, David

Sandelson, Neville

Lamborn, Harry

Sever, John

Lamond, James

Sheerman, Barry

Leadbitter, Ted

Sheldon, Rt Hon R.

Leighton, Ronald

Shore, Rt Hon Peter

Lestor, Miss Joan

Silkin, Rt Hon J. (Deptford)

Lewis, Arthur (N'ham NW)

Silkin, Rt Hon S. C. (Dulwich)

Lewis, Ron (Carlisle)

Silverman, Julius

Litherland, Robert

Skinner, Dennis

Lofthouse, Geoffrey

Snape, Peter

Lyon, Alexander (York)

Spearing, Nigel

Lyons, Edward (Bradf'd W)

Spriggs, Leslie

Mabon, Rt Hon Dr J. Dickson

Stallard, A.W.

McCartney, Hugh

Steel, Rt Hon David

McDonald, DrOonagh

Stoddart, David

McElhone, Frank

Stott, Roger

McGuire, Michael (Ince)

Straw, Jack

McKay, Allen (Penistone)

Summerskill, HonDrShirley

McKelvey, William

Taylor, Mrs Ann (Bolton W)

MacKenzie, Rt Hon Gregor

Thomas, Dafydd (Merioneth)

McNally, Thomas

Thomas, DrR. (Carmarthen)

McNamara, Kevin

Thorne, Stan (Preston South)

McTaggart, Robert

Tilley, John

McWilliam, John

Torney, Tom

Marshall, D (G'gowS'ton)

Urwin, Rt Hon Tom

Marshall, DrEdmund (Goole)

Varley, Rt Hon Eric G.

Marshall, Jim (Leicester S)

Wainwright, E. (DearneV)

Marlin, M (G'gowS'burn)

Wainwright, R. (ColneV)

Mason, Rt Hon Roy

Walker, Rt Hon H. (D'caster)

Maxton, John

Watkins, David

Maynard, Miss Joan

Weetch, Ken

Meacher, Michael

Wellbeloved, James

Mellish, Rt Hon Robert

Welsh, Michael

Mikardo, lan

White, Frank R.

Millan, Rt Hon Bruce

White, J. (G'gowPollok)

Miller, Dr M.S.(E Kilbride)

Whitehead, Phillip

Mitchell, Austin (Grimsby)

Whitlock, William

Mitchell, R.C. (Soton ltchen)

Wigley, Dafydd

Morris, Rt Hon A. (W'shawe)

Willey, Rt Hon Frederick

Morris, Rt Hon C. (O'shaw)

Williams, Rt Hon A. (S'sea W)

Morris, Rt Hon J. (Aberavon)

Williams, Rt Hon Mrs (Crosby)

Morton, George

Wilson, Rt Hon Sir H. (H'ton)

Moyle, Rt Hon Roland

Wilson, William (C'try SE)

Newens, Stanley

Winnick, David

Oakes, Rt Hon Gordon

Woodall, Alec

O'Neill, Martin

Woolmer, Kenneth

Orme, Rt Hon Stanley

Wright, Sheila

Owen, Rt Hon Dr David

Young, David (Bolton E)

Palmer, Arthur

Park, George

Tellers for the Noes:

Parker, John

Mr. James Tinn and

Parry, Robert

Mr. Frank Haynes.

Rate Support Grant (Wales)
10.16 pm
The Secretary of State for Wales (Mr. Nicholas Edwards): I beg to move,
That the Welsh Rate Support Grant Report 1982, a copy of which was laid before this House on 28th January, be approved.
Mr. Deputy Speaker (Mr. Bernard Weatherill): With this, it will be convenient to take the second motion:
That the Welsh Rate Support Grant Supplementary Report 1982, a copy of which was laid before this House on 28th January, be approved.
Mr. Edwards: I shall deal with the reports in turn and it may be convenient for the House if I deal fairly quickly with the supplementary report before going on to the main report for the 1982–83 settlement.
The supplementary report is primarily a mechanism for adjusting the rate support grants for the present financial year to take account of certain costs and factors which were uncertain or unknown when the main report was made. The supplementary report therefore takes account of the latest information on rates of interest for loan charges and subsidies within the housing revenue account and the addition to relevant expenditure to take account of the additional costs of the September 1981 police pay awards. The supplementary report also "close ends" the grant—that is, it ensures that the grant payments to individual authorities in aggregate equals the total amount of grant available. The necessary adjustments to grant entitlements have been made by a method agreed with the Welsh Consultative Council on Local Government Finance. The report also takes account of more up-to-date factual information affecting grant entitlements; for example it uses rateable values as at the mid-point of the grant year and data changes arising from local authority area boundary changes made in the year under the provisions of the Local Government Act 1972.
This supplementary report can be regarded therefore as essentially a tidying-up process. Its most significant aspect probably is that it reflects my decision not to reduce the total amount available for local authority grants in the current financial year. Here the position differs from that in England. Although authorities' budgets suggested that the current expenditure would exceed the overall expenditure target, I accepted the Welsh local authority associations' view that that excess was likely to be eliminated by various means, including the normal process of budget drift during the year. In taking that decision, I placed my trust in the local authorities. However, I have made it clear to the local authorities that I will have to look at this decision again when I have firmer information about actual expenditure in the current financial year. If an excess remains I may have to reduce the grant by means of a further supplementary report. At this stage, I must reserve my judgment.
I turn to the main Welsh rate support grant for the next financial year. The report gives effect to my decisions and determinations in respect of local authority grants for next year. Before dealing with the report itself, I would like to set out briefly the background against which my decisions have had to be taken.
The year 1981–82 was, of course, the first year of the separate Welsh rate support grant system. As I said in last year's rate support grant debate, the settlement is a matter of major importance, not simply to the local authorities
236
concerned but to the Government and the country as a whole. That statement is as relevant today as it was then. Public expenditure has to be kept at a level that the nation can afford. Local authority expenditure accounts far a substantial proportion of total public expenditure and it cannot be exempt from that fundamental requirement.
Within that inevitable and necessary constraint the Government's main objectives have been to recognise the relatively good performance of Welsh authorities in seeking to meet our aggregate expenditure target and to do everything possible to help industry and commerce. Clearly, it makes no sense to set expenditure level reductions that are unattainable. In arriving at our decision on the appropriate level of expenditure we have taken fully into account the need for realism. We have set authorities an aggregate expenditure target that they can achieve.
There has been a recognition in local government circles that, though there may be differences on certain matters, the settlement overall is fair and indeed generous. I have increased the relevant local authority current expenditure to £1, 126 million, an increase of £94 million or about 9.1 per cent. over last year's settlement figures. Total relevant expenditure on which grant is paid and which reflects the additional provision for loan and other capital charges arising from the substantially increased capital allocations I have been able to make is increased from £1, 187 million to £1, 300 million.
The aggregate Exchequer grant is at a level of support of 72.5 per cent. of relevant expenditure and amounts to £943 million, an increase of £72 million over the 1981–82 total or about 8.3 per cent. Of this total, specific grants total £96.62 million, transport supplementary grant—capital only—£30 million and the national parks supplementary grant £1.69 million. That leaves for the rate support grants themselves—that is the domestic rate relief grant and the block grant for local authorities—£814.69 million.
As I have said, this is a fair, indeed generous, settlement. The level of current expenditure provision is such that it implies for Welsh local authorities as a whole virtually the same level of services as envisaged in the 1981–82 settlement. If, of course, pay and price increases exceed the levels allowed for in the settlement, authorities will be expected to make compensating savings within their budgets. That discipline applies to local authorities as it does to the Government.
Local authorities must realise that they have a choice of options in that situation. Some are making statements—and are determining rate levels—on the assumption that any excess should simply be loaded on ratepayers. That is not so. They have a choice of cutting costs and manning levels, of reducing services or of putting up charges. It is wrong for them to argue that there is no room for further improvement in efficiency Every ratepayer will know that that is rubbish.
The marginal percentage reduction in grant of 0.9 per cent. is considerably less than the percentage reductions in England and Scotland. The relevant expenditure to which it applies has been substantially increased, so that the volume of central Government support is higher than a year ago and some £7 million more than would have been the result if we had applied last year's grant percentage of 73.4 per cent. to the planned expenditure figure in last year's White Paper. Some local authority spokesmen refer only to the percentage figure without any reference to relevant expenditure. The two have to be looked at

237
together. The Welsh authorities are in a much less difficult position than their English colleagues. They look like coming close to achieving the overall expenditure level that I set last year so that they do not have to make up lost ground, and they actually start with more Government grant for this year than they might reasonably have expected a year ago.
Before leaving the question of grant, it is useful to put the totality of grant into perspective. Last year, out of the total amount of grant available for England and Wales as a whole, the Welsh share was a little above the average share of grant for the period 1975–76 to 1980–81. This year, following a review of the procedures for allocating grant to Wales and to England, that share has been increased again, and is some £43 million higher than it would have been had the historic share applied. I think that that factor alone, if nothing else, is more than adequate justification for a separate Welsh rate support grant system.
Sir Anthony Meyer: Before my right hon. Friend leaves this aspect of the matter, can he assure me that in assessing the rate support grant he has taken full account of the special needs of areas such as the county of Clwyd? Because of decisions taken not by market forces but by governmental agencies such as the British Steel Corporation, Clwyd has found itself suddenly confronted with about 10, 000 additional unemployed people at extremely short notice. It has, therefore, special requirements in the need to attract new industry. Can my right hon. Friend give an assurance that that has been taken fully into account in assessing the rate support grant?
Mr. Edwards: Those factors have been discussed in great detail with local authority associations and the consultative council. Some aspects of the GRE formula have been revised and somewhat greater account has been taken of unemployment than was the case in the last settlement. As I told the House yesterday, in allocating capital, particularly for the urban programme, I have paid particular attention to the need to help new industry and the social problems that arise in areas of high unemployment. I think that I can, therefore, give my hon. Friend the assurance that he seeks.
As I have also stated elsewhere, I have shown that we can now insulate Welsh authorities from events taking place in England and decisions of English authorities. This is another advantage of a separate Welsh rate support grant system. We can treat them on the basis of their own performance and not tar them with the brush of Mr. Livingstone or anyone else.
I was anxious in my settlement to recognise the Welsh authorities' relatively good performance in a way that would help industry and construction and therefore employment. I have done this in two ways. First, the Government have significantly increased the provision for local authority capital expenditure next year. Including the urban programme that I have just mentioned to my hon. Friend, we are allocating £279 million for capital expenditure, which is an increase of £46 million or about 20 per cent. above the amounts allocated in 1981–82. The increase includes an additional provision for local authority roads, housing and the urban programme. Although this is not directly part of the rate support grant settlement, the increase in capital expenditure reflects the
238
Government's view of local authorities' overall spending performance. I think that this demonstrates as clearly as anything that there is a trade-off between capital and current expenditure. If current expenditure is constrained, it enables resources to be made available for worthwhile capital projects—something that we all want to see.
Mr. Dafydd Wigley: I listened to the Secretary of State's remarks about the capital allocations to local authorities during yesterday's Question Time. In view of his remarks now, how does he explain that for the county of Gwynedd the capital allocation is down 5 per cent. in cash terms, which is presumably equivalent to 15 per cent. or more in real terms? That has decreased the allocation to £6.5 million, which means being unable to proceed with vital road projects.
Mr. Edwards: The allocation of those projects is not done on some formula basis of distribution but on particular projects, which are geared to essential infrastructure to attract jobs. We must make decisions on those. They must also be fitted into the context of other major infrastructure improvements occurring in North Wales. For example, Clwyd made the same complaint but also issued some publicity material drawing attention to the excellent road links created there.
That emphasises the importance of local authorities coming forward with specific relevant proposals directly related to this sort of requirement. The matter has been dealt with in that way and not on a formula basis related to individual authorities. Some authorities will not do as well as others because particular projects seem important to us now and we have given them the go-ahead.
I yesterday announced the details of the urban programme, which supports many very worthwhile projects all over Wales to which local government attributes great importance. The total of £15.3 million is 47 per cent. higher than the amount allocated last year and more than double the programme in 1979–80.
Second, I reduced the level of domestic rate relief from its present 36p to 18.5p—the same level as in England. This means that industry and commerce will pay a little less of the total rates call in Wales and domestic consumers a little more. As hon. Members will know, the rate support grants proper comprise two elements; the domestic rate relief grant, which is a direct subsidy to domestic ratepayers, and the block grant itself which is paid to local authorities in respect of their expenditure on the services that they provide. Last year, I kept the level of domestic rate relief grant at 36p in the pound because I did not think it appropriate to reduce this level in the first year of operation of the new and separate block grant rate support system in Wales. However, hon. Members should understand that the differential between the levels of domestic rate relief in England and Wales—amounting to 17.5p in the pound—has become increasingly hard to defend. Whatever the justification for this differential in the past—of course I acknowledge that it has been of help to domestic consumers—I simply do not believe that it can be justified in the present circumstances. One has only to compare domestic rate bills.
In 1981–82 the average unrebated domestic rate bill in Wales was £153 compared with an average unrebated bill of £239 in England. Even allowing for factors such as lower rateable values in Wales, or income levels, there is

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no justification for maintaining this discrepancy at the expense—that is what it means—of industry and commerce.
Mr. Donald Anderson: Does the right hon. Gentleman accept the historic link between this higher domestic rate relief and higher water rates in Wales? Given the figures we just heard about higher water rates from the Wales water authority, can he now say that it is time to reduce by half the domestic rate relief?
Mr. Edwards: I shall say two things. First, even if one adds on the water charges on the revised basis, it is still true that the totality will be a good deal less than in England. Secondly, I can repeat the values given by the right hon. Member for Rhondda (Mr. Jones) on 16 March 1977., when speaking on this subject in the debate on the Water Equalisation Bill 1977.
He said:
"In the settlements for 1976–77 and for 1977–78 there is no question of water charges being taken into account by the Government in their decisions about the levels of domestic relief. Those decisions that were taken for the years 1976–77 and 1977–78 were based solely on the likely effects of changes in the levels of relief on local authority domestic rate poundages and had no relevance whatsoever to the level of water charges in Wales or in any other part of the United Kingdom. They had no connection with them."
The right hon. Gentleman continued:
"However much one sought to alter the level of rate support grant, it would not affect the level of water charges."
He added:
"I assure him that the water charges are not taken into account and were not a factor in deciding the level of the domestic element." [Official Report, 16 March 1977; Vol. 928, c. 568.] That has been the position under successive Governments for a number of years and it was spelt out by the right hon. Member for Rhondda.
As I was saying, this is not the time to maintain such a discrepancy at the expense of industry and commerce. The favourable settlement provided the opportunity to reduce domestic rate relief without unduly penalising domestic ratepayers. I recognise of course that this reduction in domestic rate relief will mean that domestic ratepayers will have to pay more than would otherwise be the case. But the amount involved is not the 17½p reduction in the rate but, on average, about 9p. This is because the amount of money "saved"—about £23 million—has not been taken away from the rate support grant's total but has been added to the block grant going to authorities. This of course has the effect of reducing the general rate poundage which benefits both industrial and domestic ratepayers so that domestic ratepayers will have to find only about half of the absolute reduction.
I make no apologies for the change. No one likes to see domestic rates increased, but we must balance the increase against the substantial help that this change will give to industry and commerce and, of course, to employment. Just as I was concerned to see capital expenditure increased so, for the same reasons, I want to give the maximum help that I can to industry and commerce in the Principality and thus help them in their efforts to overcome the recession.
At the end of the day rating decisions depend entirely upon the decisions taken by the local authorities themselves—I have no control over those decisions. However, I am sure—at least I hope I am sure—that all authorities in Wales will be as anxious as I am to see that the maximum benefit accrues to industry and commerce
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from this move. I look to them to keep their general rate poundage down to the lowest possible level, which, of course, will benefit all ratepayers.
I want to avoid too many technical details, but I trust refer to the block grant mechanisms. They remain virtually as last year, the only changes being those to the power of the curve above the threshold and to safety nets. I shall try to explain. As regards the former, I have increased the power of the mysterious thing called the curve from 1.35 to 1.45 so that authorities spending substantially in excess of GRE will suffer a slightly greater percentage reduction in grant on such expenditure compared to last year—in other words, the ratepayers will have to fund slightly more of very high levels of expenditure compared to GRE. As for safety nets, for this year I have decided that I will have only a single stage 5p safety net at the ratepayer level, with 4p going to the counties and 1p to the districts. In other words, there will be a 5p maximum change at the ratepayer level. But the safety nets will protect only against changes to GREs and the residual effects from moving to the new block grant system and not from authorities' expenditure decisions.
Mr. Tom Hooson: I shall be grateful if my right hon. Friend will comment on a factor that is of considerable importance to the rural areas of Wales, and that is the evaluation of the sparsity factor. Is he satisfied with the situation when there has been no progress in making allowance for the problems of rural areas in the first year during which the formula has been under the control of the Welsh Office?
Mr. Edwards: This matter has been discussed in great detail in the consultative council in an attempt to obtain the fairest possible treatment for all areas, including the rural areas. The present formula was agreed with the local authority associations. In so far as changes are produced, there will be safety nets to protect individual local authorities. I have always undertaken, as my hon. Friend is aware, to examine this matter to see whether improvements can be taken into account. My hon. Friend can rest assured that sparsity and other factors have been taken into account in the settlement.
Before concluding, I should like to say a few words more about expenditure. I have already referred to the fact that, unlike what has happened in England, I have decided not to withhold grant this year because of the potential current expenditure excess.
Similarly, unlike the position in England, I have not set individual authority expenditure targets. I would like to make it perfectly clear and repeat what I have said on other occasions. I do not want to be driven down the road of setting individual authority expenditure targets. No matter how carefully these are constructed, a degree of imprecision is inevitably involved, which can be unfair for individual authorities. As local authorities know, my concern is the aggregate expenditure target and I and they accept that, if that is achieved, some authorities with similar characteristics may be spending at different rates.
I am, of course, determined to see that my overall expenditure target is met. As I have explained, the settlement provision for next year should enable broadly the same level of service to be provided by authorities as in the current year. This means authorities in aggregate will have to constrain their cash expenditure within my target. Again, as I have already remarked, if pay

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settlements and prices move differently from the Government's assumptions used in the settlement, local authorities will have to absorb these increases by increasing efficiency, reducing manpower, cutting services or some combination of these methods. The alternative would be to push up rates and require all ratepayers—both domestic and non-domestic—to bear the brunt of a level of expenditure not justified in our present economic circumstances. If this happens and expenditure exceeds my target, I will have no alternative but to withhold grant.
I must say to local authorities that some of the early decisions on budgets that I have heard of do cause me to fear that they are relaxing their efforts to reduce costs. If some authorities push the total of local government expenditure over the target then others, which have made efforts, may find themselves suffering in the inevitable cutback. I might be forced to introduce individual targets to protect authorities that have made an effort to reduce expenditure.
There should be no misunderstanding. If there is an overspend next year and, indeed, if the current expenditure overspend this year is not substantially reduced from the present level, I shall have to withhold grant.
Mr. D. E. Thomas: The right hon. Gentleman says that he does not operate expenditure controls for particular authorities. Within the document there is published the grant-related expenditure overall for each authority. The right hon. Gentleman also publishes the GRE unit for each factor. Yet the same document states that the figures
"do not form a basis for calculating a notional allocation of either grant-related expenditure or grant to individual authorities for any particular service."
Why does he not publish such information? It would be useful to hon. Members in examining the performance of authorities and would also be useful to his Department.
Mr. Edwards: One reason is that I do not wish to dictate to local authorities their own priority decisions and their own choices. The local authorities themselves. I believe, would be unhappy to go down the road that the hon. Gentleman suggests. As he has put the suggestion, I shall consider it and perhaps return to it if I am able to reply to the debate.
By any standard of comparison—by comparison with previous settlements, by comparison with the English and Scottish settlements—and on the simple basis of what it will enable Welsh authorities to do next year this is a fair and reasonable settlement.
However, I am shocked by reports that in Cardiff rates for industry may go up by 14 per cent. and domestic rates may go up by 42 per cent. In the Vale of Glamorgan a general rate increase of 18 per cent. has been proposed with an increase in domestic rates of 45 per cent. Between 80 per cent. and 85 per cent. of rate bills arise from the county precept. Therefore, the prime cause of these astonishing propsals seems to be the intention of South Glamorgan to impose an increase in its general rate of 21p over its main rate last year and 15p over its supplementary rate.
The proposals of the Labour-controlled county council seem extraordinary. The effect of reducing domestic rate relief is to increase block grant, which means that the
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general rate should be 8½p in the pound less than would otherwise be the case. In those circumstances it is hard to conceive of a financial circumstance confronting the council that dictates an increase of 21p over its original main rate last year.
Let us look at what other counties have done. Where the average increase is not 21p but less than 2p. Three counties are not increasing their precept at all, and one—Gwynedd—is proposing to reduce its precept by 5p in the pound. If South Glamorgan cares at all about its ratepayers, job creation and the health of its businesses I hope that it will reconsider its proposals. If Labour Mid-Glamorgan, for example, with its social problems, can hold its rate, it is very odd, to say the least, that Labour South Glamorgan cannot exercise more restraint.
Of course, the effect on domestic ratepayers of my decision to reduce the level of domestic rate relief is an increase of about 9p, or 7 per cent., in the domestic rate, but that is a very different picture from the massive increases reported in South Glamorgan. I accept that there are bound to be some variations in domestic rate increases around this figure. But what ratepayers should clearly understand is that domestic rate increases over double figures are the results of decisions that are made by the local authorities themselves and over which I have no control. Such increases certainly do not arise from my decision to reduce the level of domestic rate relief.
The contrast between what is apparently happening in South Glamorgan and what is happening elsewhere is stark. Other local authorities have proved that on the basis of this settlement rates can be held down, although I appreciate that it will require a considerable effort by them to do that and maintain services.
Manpower levels, cut by about 4.6 per cent. over two years, will need to continue to fall. But if they do, and if every effort is made to keep costs down, there should be on average little or no rate increase for industry and commerce, and increases for domestic ratepayers should be less than those of recent years.
I look to Welsh local government to maintain its responsible approach and to seize the opportunity that this settlement undoubtedly gives it.
10.48 pm
Mr. Alec Jones: After listening to the Secretary of State's speech, I am beginning to think that his contribution to local government in Wales has been so great that he must recently have been awarded the medal of honour by the Welsh Counties Committee or by the Council for the Principality. But when the rate bills, the rent increases and the increased water charges all come tumbling through the letter boxes, the people of Wales will feel the full impact of the settlement that we are discussing—both the financial effects and the continuing worsening of local authority services.
The key elements in the settlement are as follows: first, a further reduction in Government financial assistance to local authorities; secondly, false assumptions built into the settlement about the likely levels of inflation; thirdly, the most punitive increases in council rents; and, fourthly, the most unfair settlement yet devised for domestic ratepayers.
I was grateful to the Secretary of State for his technical explanation of the safety net, the power of the curve and matters of that nature. I assumed that having got away

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from regression analysis, we were moving into simpler times, but that must have been a mistake which quite a few of us made.
This is the second separate Welsh rate support grant settlement. It is satisfying that the Secretary of State has introduced two new criteria which are important and will improve matters—one dealing with concessionary fares and the other the new method of dealing with unemployment. Both those affect the levels of expenditure by local authorities.
This is not just the second settlement: it is the second settlement with a reduced level in the grant percentage. The Secretary of State may say that it is only a small reduction, 0.9 per cent. in Wales. But how little is it in cash terms? The Secretary of State reminded us that the total relevant expenditure was £1, 300.8 million, 0.9 per cent. of that is £12 million. So the first good news from the settlement is that Wales loses that £12 million of Government grant.
In the settlement for 1982–83 there are two assumptions which are completely unrealistic. They are as unrealistic as is the Secretary of State's understanding of the problems facing Wales today. First, there is the assumption that wage and salary rises can be restricted to 4 per cent. for settlements between September 1981 and March 1983. That has already gone by the board. Local authority manual workers accepted pay settlements ranging from 6.3 per cent. to 7.8 per cent. Lest someone thinks that they behaved in a dreadful way, let us remind ourselves that their bottom basic rate, including the increase, is £63.65 and the top rate is £78.10 per week.
The second assumption is that all other costs can be contained within the 9 per cent. figure. The Government's record on inflation, which is running at 12 per cent., hardly gives credibility to the 9 per cent. figure. Most local authority members do not believe it, nor does any prudent council treasurer. The council treasurers will wisely have advised their members that neither the 4 per cent. ceiling on wage increases nor the 9 per cent. ceiling on other costs is realistic. They will have budgeted accordingly.
Let me quote from a newspaper report of what the chairman of the Welsh Counties Committee had to say about it:
"The inflation assumption of 6 per cent"— that is taking the 9 per cent. and the 4 per cent.—
"was totally unrealistic, … and to adhere to their spending limits Welsh local authorities would have to reduce services by at least 3 per cent."
That is what the assumptions behind the settlement will lead to.
There will be increasing pressure for further redundancies in local authority staff. The phrase now is not redundancies but "cutting manning levels". That may well suit the Secretary of State for Wales, but with unemployment running at 176, 000 in Wales we need more unemployment as much as we need a hole in the head. Already local authorities have taken a fair share of cuts. In the year ending September 1980 they have lost 4, 439 workers, a cut of 3.8 per cent. in their work force. In the year ending September 1981, they sustained a further loss of 3, 242, a cut of 2.8 per cent. There have been further losses since then.
That cutting of staff cannot continue year after year without seriously affecting both the quality and the quantity of local authority services, which are needed by the people of Wales. If we consider education as an
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example, the year ending September 1980 saw a reduction of 174 in the number of lecturers and teachers employed. In the year ending September 1981 there was a further reduction of 999. Since last September, there have been further reductions. Whatever may be the merits of the argument of falling rolls, few educationists would accept that the loss of those teachers has had no serious effect on our schools and their pupils.
Built into the Secretary of State's settlement—a matter to which he referred at length in the Welsh Grand Committee, and I understand why he did not refer to it this evening—is the decision that there should be an increase in the local contribution to the housing revenue accounts of £2.50 per dwelling per week. That is a polite way of saying that council rents must rise by that sum. Council tenants may not be the most loved members of society by the Government, but they have had, and are having. an especially rough time from the Government. In 1979–80, the average weekly unrebated rent was £6.50. In 1980–81, there was a 24 per cent. increase, pushing it up to £8.09. In 1981–82 there was a 41 per cent. increase, pushing the rent up to £11.41 a week. For 1982–83, we are told that the settlement proposes a further 22 per cent. increase, pushing the average weekly unrebated rent up to £13.91. Of course, that is nearly the minimum. There would be extra increases in some authorities. The Vale of Glamorgan will be increasing its rents by £3 a week and Swansea by about £2.60. However, taking only the £2.50 on which the settlement is based, it means that council tenants are faced with a rent rise of 114 per cent. since the Government took office.
Mr. Hooson: Are not the increases of the past two years simply a catching-up on the process of unrealistic adjustment of the rents by the Labour Government?
Mr. Jones: Whatever the hon. Gentleman may believe, I find it impossible to accept that it is reasonable or proper to increase council rents by 114 per cent. in four years and to view it in such a way that 18 out of the 37 housing authorities in Wales now have a surplus on their housing revenue accounts. That surplus can be transferred in whole or in part to the general fund, so that we could find that council tenants are subsidising other council services. I know that the Secretary of State has said that he does not expect that to happen, but if it does happen what can and will he do to prevent this gross injustice to council tenants?
Last year the Secretary of State was rather proud of his achievement in maintaining the domestic rate relief at 36p in the pound. Today we heard a very different story. In the debate last year, the hon. Member for Anglesey (Mr. Best) said how much the retention of the domestic rate relief at 36p in the pound should be welcomed. Does the hon. Gentleman welcome this year's decision to cut domestic rate relief almost by half to 18.5 per cent? If the domestic ratepayers of Wales had received some magnificent gesture, bonus, benefit or blessing during the past year, one could understand it. The reduction of the domestic rate relief, according to the Welsh counties, should lead to an average rent increase of 9½p in the pound. It is true that we do not yet have the full picture, because, even when I spoke to some local authority people today, treasurers and councillors were wrestling with the impossible task:
I do not often quote the Western Mail, but I do so on this occasion. It said:

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"The Secretary of State was expecting single figures rises for domestic ratepayers."
I tried to get some idea of the effect that this settlement will have on domestic ratepayers. I found that in West Glamorgan it is expected that domestic rates will rise by 15 per cent. In Gwent the expected rise is 13 to 15 per cent., Mid-Glamorgan 12½ per cent., as long as there is no other increase in any district council, and in South Glamorgan 14.6 per cent., again excluding any district council increase. It is not easy to find what the situation is with district councils, but I understand that the Ceredigion council rate will rise by 17 per cent.
I agree with my old statement, which was read by the Secretary of State. I did not accept then, and I do not accept now, that there is a direct link between water charges and rates. However, it is strange that this year, above all, he should choose to surrender the domestic rate relief advantage that Wales has. This year householders are facing a double bill. They are asked to meet not just the rate increases but the massive increase in water charges.
Mr. Nicholas Edwards: I challenge the word "surrender." It seems to imply that the money has been lost to Wales. It has not. It remains with local government in Wales, for the benefit of the people of Wales. However, the priority at the moment is industry, commerce and jobs, about which the right hon. Gentleman has a lot to say, but about which he is not prepared to do anything.
Mr. Jones: The right hon. Gentleman is obviously touchy on this issue. It is a surrender, for the domestic ratepayers in Wales are being asked to subsidise jobs when that should properly be the responsibility of the Government.
Welsh householders are being asked to pay not only the increased rates directly brought about by the withdrawal of the advantageous domestic rate relief but an 18.3 per cent. increase in their water charges. It is no good saying that this is a matter for the Wales water authority. The Government threw away the advantages of the Water Charges Equalisation Act, which would have been worth £3 million to the water authority.
The hon. Gentleman knows that to be true, and a press release yesterday from the Wales water authority made the same statement. Thus, householders are being particularly heavily hit by the Government, first, by rates which are likely to be increased by about 15 percent., and, secondly, by the increase in the water rate of 18.3 per cent. Many of the householders are on the dole queue, while those who are fortunate enough to remain in work are asked to accept this level of water charge and rate increase, but a wage increase of only 4 per cent.
The Secretary of State justifies the sell-out on the domestic relief because it will give a boost to employment. I do not think that there is any Welsh Member who rejects or does anything other than welcome a boost to employment—although there has not been a great deal of that since the Government took office. However, there are other, better and fairer ways of boosting employment than by penalising the householder.
Next month we shall have the Budget. That should be the proper vehicle to boost employment. Then we can judge the Government's efforts in attracting jobs to Wales. At that stage they could act on proposals put to them, even
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by their friends, to reduce or abolish the national insurance surcharge. That would do much more to boost employment than the way that they have chosen, of penalising the domestic ratepayers.
This squalid treatment of domestic ratepayers is like robbing Peter to pay Paul, and not all the Pauls who will receive the benefit need a boost. The non-domestic ratepayers who will benefit most from this order include the banks. I do not believe that Barclays Bank needs much of a boost. They also include building societies and bookmakers. Indeed, there is a whole range of non-domestic ratepayers. Certainly the Secretary of State's action gives a boost, but it gives a boost to the unworthy and worthy alike, and at the expense of Welsh domestic ratepayers.
The support that this order gives to Welsh local authorities is miserly. The order is woefully optimistic about inflation, and it is shamefully discriminating against both council tenants and domestic ratepayers. For those reasons, I urge my right hon. and hon. Friends to vote against it tonight.
11.6 pm
Sir Anthony Meyer: The right hon. Member for Rhondda (Mr. Jones) had a lot of fun, claiming that the limitation of rate increases to industry would benefit the banks and the bookmakers. I must tell him that I have had many complaints from some well-heeled people in my constituency that the burden is being transferred from industry to the private ratepayer. It is an issue that sorts out the men from the boys, because if, as the Labour Party never ceases to tell us, we should give overriding priority to the creation of jobs, we should have the guts to limit the burden that we put on industry.
We in the Conservative Party believe in the importance of creating jobs, and we are prepared to pay the price to get them. All the eyewash of the Labour Party, which is prepared to back every strike that threatens jobs in Wales, will not wash when people really think about who is making the efforts to create jobs in Wales.
My right hon. Friend the Secretary of State has done a terrific job in fighting for the Welsh interests in the Cabinet. The settlement that he has secured is obviously not as good as we should have liked. We should all like to have had massive support by the British taxpayer for the Welsh ratepayer. However, he has secured a settlement which, by any standards, is a good one.
The chairman of Clwyd's finance committee—he is a member of the Labour Party, but he is a fair-minded man—went on record as saying that
"thanks to the additional help from the county resulting from the general determination in Wales to meet Government restraints, they have been able to recommend an unchanged rate precept".
It is an example of a county council that does not have a Conservative majority, but which has adopted intelligent policies, by and large, going along with the Government, and co-operating with them in maintaining its precept this year. At the same time the council is keen to have—and why not?—an increase in its capital allocation. Hence the brief intervention that I made in my right hon. Friend's speech.
Having said that, I ask my right hon. Friend not to be tempted to think that the anger about the domestic rate level is something that will die down. The Conservative Party gave a pledge a long time ago that it would abolish the domestic rating system. Quite candidly, I am not at all

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sure that that was a wise promise to give. I believe that some element of property taxation—of a rating system—should be preserved. Apart from anything else, it encourages the proper occupation of house space by penalising over-occupation and it is a cheap tax to collect. However, it has reached a level at which its unfairnesses become totally unacceptable.
I would not like to think that the Bill that is at present going through Committee will be taken by my right hon. Friends in the debate tonight as representing any excuse for a slackening in their zeal and determination to carry out that fundamental reform of the rating system that they are constantly promising us. Back Benchers will make sure that they live up to their word in that respect.
I hope that this debate will be, if not the last, at any rate the penultimate debate that we have in the House on the rate support grant in its present form. I hope that ways will be found— perhaps by transferring large blocks of expenditure from the rates to general taxation—to bring about that fundamental reform in the rating system that we have so often been promised.
11.11 pm
Mr. Donald Anderson: Never have local authorities felt more under seige from a hostile Government than now. I see the expression of disbelief on the face of the Under-Secretary of State. However, I advise him to look through the pages of local authority journals, to look again at the Government's unsuccessful attempts to introduce a referendum before rate increases, at the attempts to curb supplementary rate increases and at the attempts to impose an average rent increase on local authorities as a whole. Local authorities generally feel battered and faced by a Government who are hostile to local democracy.
There are, however, some brighter features to this rate settlement. The Welsh share of the combined total of the English and Welsh settlements has increased, as a result of the separate rate support grant settlement, from 7.4 per cent. to 7.6 per cent. The cuts in the proportion of the total local government spending provided by central Government are lower in Wales than in England. The figure is 0.3 per cent. in Wales, compared with 3.1 per cent. in England. But that is still a cut at a time when there are increasing pressures on local authorities as a result of the Government-inspired recession and the ageing population that makes greater demands on our social services. Cuts at the margin affect, for example, the bus services that depend on the transport supplementary grant and the county grant from that. As we saw during the recent snow crisis, the reserves available to our local authorities are at historically low levels.
As has been pointed out, in setting the cash limit ceilings the Government have set totally unreal limits—the 4 per cent. pay suggestion from September 1981 until March 1983 and the 9 per cent. for other costs—that bear no relationship to the projections made by outside and objective forecasters on the likely level of pay settlements or for the course of inflation over that period. Those figures of 4 per cent. and 9 per cent. compare with 6 per cent. for earnings and 11 per cent. for prices in the last settlement. Given such totally unrealistic figures, one can feel only that the Welsh Office and the Department of the Environment have been infected by the optimism affecting Treasury Ministers. They continually talk about inflation falling as surely as day follows night. Inflation has been
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bumping at about 12 per cent. for the past few months. Inflation is high in the United States of America and all the Government's forecasts have been way off course. The projections made and the limits that have been set must appear unrealistic. Ultimately, the ratepayers will have to pay. The element of choice that the Secretary of State claimed does not exist.
As a result, domestic ratepayers will suffer. The hon. Member for Flint, West (Sir A. Meyer) said, with his usual objectivity, that in 1974 the Prime Minister gave a pledge that she would abolish the rates. That pledge was repeated in the 1979 manifesto, but in a somewhat muted form. Given the parliamentary timetable, there is no way that those two clear pledges can be implemented before the next election. That remains true, however much the hon. Gentleman may say that he and his colleagues will do their best to remind the Prime Minister of those oft-repeated pledges.
After that pledge in the 1979 election, the increase in average domestic rate poundages in Wales in 1980–81 was 30.7 per cent. compared with the previous year. Following that pledge, in 1981–82 there was an average rate increase in Wales of 19.1 per cent. Thus we face the paradox that despite the general election promises in 1974 and 1979, the Government have added to the burdens of domestic ratepayers. In the process, they have made it more difficult to abolish domestic rates. They have made the domestic rate yield so large that the task of abolishing rates is even more herculean. Domestic rate relief has been halved and, despite what has been said, that used to be billed as compensation for Wales for the high water charges. As a result, the Swansea ratepayer in 1982–83 will face a 15.8 per cent. increase in domestic rates. Because of the abolition of domestic rate relief there will be an increase of 3.5 per cent. for industrial and commercial users. Nevertheless, water rates are certain to rise by about 18.3 per cent.
Given the high rate of unemployment, there is a case for a bias in favour of industrial and commercial users. However, as has been said, the Secretary of State's bounty falls on the unjust and the just. Surveys of small businesses in Wales show that an abolition or reduction of the national insurance surcharge would he far more beneficial than a rate reduction.
Mr. Nicholas Edwards: Does the hon. Gentleman agree that the criticism made by his right hon. Friend the Member for Flint, East (Mr. Jones) about the indiscriminate nature of the help given to banks and others applies equally well to the national insurance surcharge?
Mr. Anderson: If one accepts that point, the survey suggests that the overall benefit, accepting the capricious way it falls, will be greater for small businesses as a result of the national insurance surcharge reduction.
The Government have raised expectations about the abolition of rates. They have done nothing about it. It is clear that nothing will be done. It would be helpful to have a Welsh Office estimate of the average increase in domestic rates this year. We know that the abolition of rates proposed in the 1979 general election was just another promise. Like "Labour isn't working", it was another con trick.
11.21 pm
Mr. Geraint Howells: In Wales we have been a little more fortunate than in England. That is

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entirely due to the fact that, following the concessions made in 1980, Wales has been given separate treatment, a move that has long been advocated by Welsh Liberals. We have been given more cash than might otherwise have been expected under the old system, which was entirely dominated by London. Thus, local councils have been able to cope better with the financial stringencies currently in force.
I congratulate the Secretary of State for Wales on making a genuine attempt to consult the Welsh local authorities, in contrast with the attitude of the Secretary of State for the Environment and his dealings with the English authorities. That shows the wisdom of devolving power, although Welsh Liberals are not entirely happy that the power should reside with the Secretary of State for Wales; rather it should reside with a Welsh Assembly.
We should like to see the present two-tier system of local government revised, if not abolished altogether, as over the past few years it has added considerably to the expense of running local government. Liberals would also like to see a radical reform of the rating system.
However, tonight, as we have only a few minutes left, it is wiser for me to ask the Secretary of State to answer the following simple questions. What effect will the new proposals have on rural constituencies such as Cardigan? What effect will they have on local services? Will they affect unemployment in Wales? Will there be a reduction in the staff of local authorities?
My final question is important. Does the Secretary of State believe that the increase of 18.3 per cent. in domestic water rates in Wales is reasonable or fair? Clarification on those points and answers to those questions would be gratefully received not only by hon. Members, but by the Welsh electorate.
11.27 pm
Mr. Ray Powell: The Ministers on the Front Bench, who are devotees of reactionary monetary policies, are responsible for the total collapse of local government morale in Wales, from the chief executives in county borough districts to community council clerks. Elected representatives will stand for re-election only because they hope for the early return of a Labour Government. Why? Because the autonomy that they once had has been relentlessly and ruthlessly torn from them. The service that they give freely and happily to the public to administer local government and to meet the real needs of the people has slipped right out of their hands and back to this place, where administration is so tied up with tradition and red tape that it takes a constitutional genius to get 10 minutes to discuss a major disaster.
Let us examine briefly what the Conservative Administration have done to local government. It has shackled it so tightly to central Government that it is practically impossible for local authorities to find funds to maintain existing facilities. Local authorities have slashed labour forces, not because they are not needed but because the authorities have no funds to pay them. Education has been slashed, not because authorities wished to do so but because they were threatened by the rate support grant axe wielded by the Secretary of State for Wales.
From playschools and playgrounds to parks and playing fields, paths and pavements, from school transport, school meals and school books to school teachers and in some
250
areas even schools themselves, all have had to be slashed. Transport in Wales is in a mess, housing is in decline, and health and social services a disaster area. Lollipop ladies, school dinner ladies, school cleaners and social workers have been thrown out of their jobs. Meals on wheels for the elderly are becoming a treat from the past and home helps are once again becoming the charladies of the rich. It is not just the return of unemployment to the 1930s but the return of school leavers to domestic service and the return of the workers to serfdom—all brought about by two and a half years of Thatcherism.
The Government have squeezed local government finance to such an extent that the pips are past squeaking—they are howling. Local government finance measures of this kind are designed to take away from local government in Wales all pretence of local democratic decision making on finance. The level of rate will be fixed and assessment of standing needs by the Government based fundamentally on grant-related expenditure, plus some margin also prescribed by the Secretary of State. Industrial, commercial and business ratepayers will be marginally better off, but the domestic ratepayer will suffer. With water rates, gas charges, council house rents and price escalation coupled with a 4 per cent. limit on pay increases, it is no wonder that mental illness is increasing and marriage breakdowns multiplying. To add insult to injury and to rub salt in the wound, Tarzan himself, the Secretary of State for the Environment, is not now threatening to throw the Mace at hon. Members but he told Young Conservatives at Harrogate last weekend about the evils of unemployment in the following terms:
"I see lack of work and denial of achievement as a corrupting force beyond measure."
He claimed to feel a deep sense of concern and continued:
"Where do you go on rainy days, how do you persuade children to respect Society that appears to have rejected their parents and in the end, upon what rock of faith do you take your stand?"
That is hyper-hypocrisy from one who has caused hundreds of thousands of those parents to be kicked out of work in local government, and with the measures just agreed and these proposals for Wales designed to throw even more out of work. The Secretary of State for Wales, his ministerial colleagues and all the lackeys on the Conservative Back Benches agree that there is no turning back now. The Tory Party chairman stated last weekend:
"If we fudge now we shall earn nothing but the electorate's contempt."
I have news for the Secretary of State, the Government and Ladbrokes. The electorate's contempt is seething and must be expressed. If the Government are so sure of their fate and so sure that they have the electorate's confidence, why do they not test it and put it to the vote? I call on my colleagues to vote against these further restrictions on local government. I invite councillors throughout the Principality to read the result of the vote tonight so that they know who and where their friends are.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Mr. Donald Coleman.
Mr. Dafydd Wigley: On a point of order, Mr. Deputy Speaker. Why has it not been possible to call every party's representative on a matter which is of vital importance to every party in every part of Wales?
Mr. Deputy Speaker: The matter is entirely in the discretion of the Chair.
Mr. Wigley: Futher to that point of order, Mr. Deputy Speaker. It is totally unreasonable that the Chair should not make it possible for every view in the Chamber to be expressed. It is impossible for members of my party to retain confidence in the Chair if that cannot be accomplished.
Mr. Deputy Speaker: I can assure the hon. Gentleman that the best is done on all occasions.
Mr. Wigley: I must insist, Mr. Deputy Speaker——
Mr. Deputy Speaker: Order, order.
Mr. Wigley: We are squeezed out of debates in the Chamber——
Mr. Deputy Speaker: Order, order.
Mr. Wigley: We are——
Mr. Deputy Speaker: Order, order. I must ask the hon. Gentleman to resume his seat.
Mr. Wigley: It is not possible for us to express our viewpoint. We shall not accept——
Mr. Deputy Speaker: Order. I ask the hon. Gentleman to resume his seat.
Mr. Wigley: It is totally unreasonable.
Mr. Deputy Speaker: Order. The only thing that I can do is to ask the hon. Gentleman to leave the Chamber.
Mr. Wigley: It is totally unreasonable.
Mr. Deputy Speaker: I ask the hon. Member to leave the Chamber.
Mr. Wigley: I do so under protest.
Mr. Deputy Speaker: There is no protest.
Mr. Wigley: I do so under protest on behalf of my party at the inability of this Parliament to give Wales fair play.
11.33 pm
Mr. Donald Coleman: The Opposition have two main objections to the rate support settlement. We are anxious about the support given to the domestic ratepayer in the settlement, which is being reduced. We are also concerned about the increase in council house rents.
The level of support to the domestic ratepayer is to be reduced from a relief of 36p to 18½p in the pound. If there is a shortfall in local authority spending requirements, the burden of meeting that shortfall will have to be met by the domestic ratepayer.
The Secretary of State when announcing the rate support grant settlement for 1982–83, said that he thought that the rate increases in Wales flowing from the settlement should be much lower than in recent years. He went on to say that the reduction in domestic rate relief, with the corresponding increase in block grant, would provide an excellent opportunity to boost employment in Wales.
That sounds fine, provided that there is no problem with wage settlements being kept at 4 per cent. and that there is an inflation rate of no more than 9 per cent. There has been a chorus recently—and the Secretary of State was part of it—claiming that rates paid by industry and commerce add to the unemployment total. That claim is advanced without the evidence to support it. Many
252
economists challenge that view. They believe that if there is less than full employment an increase in public expenditure should take place. They believe that local government expenditure should be increased to improve employment.
We should not forget that local government is a large and direct employer and that the spending power of its employees helps to sustain demand for private sector products. Cuts in rates would mean cuts in spending, both by local government directly and by those it would employ. That would lead, in turn, to job losses in industry and commerce.
Mr. Steve Hughes, the principal officer of the AMA, wrote in the October 1981 issue of Municipal Review that the latest figures showed that rate payments in 1978, represented only 0.7 per cent. of total manufacturing costs. When we compare rates with wages and salaries in manufacturing and construction industries for a more recent period, we find that rates were about 1.9 per cent. of the wage and salary bill in 1975 and 1980 and somewhat less in the intervening years.
Since 1975 rates have grown less quickly than the price of manufactured goods, the retail price index, the cost of materials and fuel bought by manufacturing industry and average earnings in manufacturing industry. A significant item in the discussion is the increase in interest charges, which rose by 94 per cent. between 1978 and 1980, while rates rose by only 48 per cent.
As for the relief being given by the Government to non-domestic ratepayers, Mr. Frank Othick wrote in the Local Government Review in December 1981:
"It is inequitable, unjust and unreasonable that the non-domestic ratepayer should be treated more generously for property rating purposes than those who do not enjoy tax and trading privileges. Selective, not blanket relief, could, however, be justified in cases of business hardship.
Clearly, the category of non-domestic ratepayer needs close attention, particularly in the light of the Government's treatment of the domestic ratepayer.
My right hon. Friend the Member for Rhondda (Mr. Jones) mentioned the position of banks, building societies, off-licence operators and other nationally known firms including bookmakers, in our high streets. He said that they will benefit from the better treatment given to them in preference to the domestic ratepayer. We are also concerned about the increase in council house rents and we believe that we are right to call on the House to divide against the motion.
11.38 pm
Mr. Nicholas Edwards: The hon. Member for Neath (Mr. Coleman) seemed to think that rates are not important to industry. That is not the view of industry. One of the main points put by the CBI representatives who came to see me a week or so ago was that the reduction in the rate burden was a top priority.
In answer to the hon. Member for Merioneth (Mr. Thomas), who raised a point at the start of the debate, I confirm that GREs are established for the purpose of block grant and are not hypothecated. It is the desire of Welsh local authorities that the figures that he requested should not be published, but the information on comparative costs is available in the CIPFA publication and that is probably the best material for his purpose.
We heard suggestions from the hon. Member for Swansea, East (Mr. Anderson) and the hon. Member for

253
Ogmore (Mr. Powell) that local authorities were under siege. The answer to that suggestion was rather effectively given by the hon. Member for Cardigan (Mr. Howells), who said that the separate rate support grant arrangements for Wales, which I introduced, meant that more cash than otherwise might be expected had gone to Wales than under the old system. He congratulated me for making a genuine attempt to consult the Welsh local authorities.
The hon. Member for Cardigan spoke about effects on his local authority. I am pleased to see that Dyfed is apparently proposing no change in its precept. I hope that that will lead to a low increase, certainly for the industrial ratepayers in that area.
The hon. Member for Ogmore made a remarkable speech and I find it hard to believe that the inhabitants in his constituency are all now in domestic service, which seemed to be the impression he attempted to give. He suggested that local government "slashed", to use his word, its labour force when reducing it by 4.6 per cent. over two years. During that period the Welsh Office numbers were reduced by 13 per cent., not through redundancies as suggested by one hon. Gentleman but through natural wastage.
Perhaps the best answer to the speech of the right hon. Member for Rhondda (Mr. Jones) was given by my hon. Friend the Member for Flint, West (Sir A. Meyer) who said that it was all "eyewash". The real answer is found in the unchanged rate precepts of many local authorities. The fact that they have been able to proceed on an unchanged rate precept basis suggests that the whole case advanced by the right hon. Member for Rhondda—that we were asking them to do something impossible and unreasonable—was absurd.
In suggesting that the reduced percentage of grant cost Wales £12 million—the right hon. Member for Rhondda wrote his speech before mine—he carefully ignored that I had increased current expenditure. As I told the House, the volume of central Government support is higher than it was a year ago; it is now £7 million more than if we had maintained the grant percentage at the original planned expenditure levels.
The right hon. Gentleman then referred to the reduction in teacher numbers. He failed to say that there was a fall of about 50, 000 in pupil numbers since 1977–78 and that the pupil-teacher ratio in Wales was at an all-time best level. There was no mention of that from the right hon. Gentleman.
I debated the rent issue recently in the Welsh Grand Committee and I do not propose to go over that ground again, except to remind the House that 46 per cent. of all Welsh local authority tenants receive rent rebate assistance. That ought to be considered when making a judgment on the issues raised by the right hon. Gentleman.
The right hon. Member for Rhondda and other hon. Members referred to water charges. This is not the time to debate those issues, but it is worth saying, since the 18.3 per cent. increase in water charges was mentioned in this context, that if the water equalisation measures had still existed the effect would not have been more than about 2 per cent. on that. It did not occur because of the abandonment of that curious scheme—which had the effect of giving help to many areas where the charges were low and taking it from many where the charges were high—but because the Wales water authority failed
254
sufficiently to reduce its manning and expenses and to adjust sufficiently to the changed circumstances in which it had to operate.
A case cannot be made out for basing domestic rate relief in Wales on the assumption of water charges when, after all, that was expressly repudiated by the right hon. Member for Rhondda when he was in Government. I make no apology for transferring the domestic rate relief to industrial and commercial users.
I cannot see the justification for maintaining domestic rate levels at such a substantially lower level than in England when surely the priority in Wales should be to give the maximum help to those engaged in industry and commerce. The fact that we are able to hold rate levels for industry and commerce this year at a level that will be nearly unchanged will make a real contribution to job creation.
What really matter now are the local authorities' decisions. It has been argued that the Government's inflation assumptions may not turn out to be right. It is not impossible for local government to reduce manning on the scale that it has been reducing it over the past year or two, or even to do rather better than that. If it does that and holds its costs, there is no reason for local government to burden ratepayers at this time. It should look to its priorities and remember that the protection of its ratepayers, especially its industrial and commercial ratepayers——
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business):——
The House divided: Ayes 311, Noes 208.

Division No. 69]

[11.45 pm

AYES

Adley, Robert

Bruce-Gardyne, John

Alexander, Richard

Bryan, Sir Paul

Alison, Rt Hon Michael

Buck, Antony

Alton, David

Budgen, Nick

Amery, Rt Hon Julian

Bulmer, Esmond

Ancram, Michael

Butcher, John

Arnold, Tom

Cadbury, Jocelyn

Aspinwall, Jack

Carlisle, Kenneth(Lincoln)

Atkins, Rt Hon H. (S'thorne)

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

Atkins, Robert (Preston N)

Chalker, Mrs. Lynda

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

Channon, Rt. Hon. Paul

Baker, Kenneth (St.M'bone)

Chapman, Sydney

Baker, Nicholas (N Dorset)

Churchill, W.S.

Beaumont-Dark, Anthony

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

Beith, A. J.

Clark, Sir W. (Croydon S)

Bendall, Vivian

Clarke, Kenneth (Rushcliffe)

Benyon, Thomas (A 'don)

Clegg, Sir Walter

Benyon, W. (Buckingham)

Cockeram, Eric

Best, Keith

Colvin, Michael

Bevan, DavidGilroy

Cope, John

Biffen, RtHonJohn

Corrie, John

Biggs-Davison, SirJohn

Costain, Sir Albert

Blackburn, John

Cranborne, Viscount

Blaker, Peter

Critchley, Julian

Body, Richard

Crouch, David

Bonsor, SirNicholas

Dean, Paul (North Somerset)

Boscawen, HonRobert

Dickens, Geoffrey

Bottomley, Peter (W'wich W)

Dorrell, Stephen

Bowden, Andrew

Douglas-Hamilton, LordJ.

Boyson, Dr Rhodes

Dover, Denshore

Bright, Graham

du Cann, Rt Hon Edward

Brinton, Tim

Dunn, Robert (Dartford)

Brittan, Rt. Hon. Leon

Durant, Tony

Brooke, Hon. Peter

Dykes, Hugh

Brotherton, Michael

Eden, Rt Hon Sir John

Brown, Michael (Brigg & Sc'n)

Edwards, Rt. Hon N. (P'broke)

Browne, John (Winchester)

Eggar, Tim

255

Elliott, Sir William

Latham, Michael

Ellis, Tom (Wrexham)

Lawrence, Ivan

Emery, Sir Peter

Lawson, Rt Hon Nigel

Eyre, Reginald

Lee, John

Fairbairn, Nicholas

LeMarchant, Spencer

Fairgrieve, Sir Russell

Lennox-Boyd, Hon Mark

Faith, MrsSheila

Lester, Jim (Beeston)

Farr, John

Lewis, Kenneth (Rutland)

Fell, Sir Anthony

Lloyd, Ian (Havant & W'loo)

Fenner, Mrs Peggy

Lloyd, Peter (Fareham)

Finsberg, Geoffrey

Loveridge, John

Fisher, Sir Nigel

Luce, Richard

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

Lyell, Nicholas

Fletcher-Cooke, SirCharles

McCrindle, Robert

Fookes, Miss Janet

Macfarlane, Neil

Forman, Nigel

MacGregor, John

Fowler, Rt Hon Norman

MacKay, John (Argyll)

Fox, Marcus

Macmillan, Rt Hon M.

Fraser, Peter (South Angus)

McNair-Wilson, M. (N'bury)

Fry, Peter

McNair-Wilson, P. (New F'st)

Gardiner, George (Reigate)

McQuarrie, Albert

Gardner, Edward (S Fylde)

Major, John

Garel-Jones, Tristan

Marland, Paul

Gilmour, Rt Hon Sir Ian

Marlow, Antony

Glyn, Dr Alan

Marshall, Michael (Arundel)

Goodhart, SirPhilip

Mates, Michael

Goodlad, Alastair

Maude, Rt Hon Sir Angus

Gorst, John

Mawby, Ray

Gow, Ian

Mawhinney, Dr Brian

Grant, Anthony (Harrow C)

Maxwell-Hyslop, Robin

Gray, Hamish

Mayhew, Patrick

Greenway, Harry

Meyer, Sir Anthony

Grieve, Percy

Miller, Hal (B'grove)

Griffiths, E. (B'y St.Edm'ds)

Mills, lain (Meriden)

Griffiths, Peter Portsm'th N)

Mills, Peter (West Devon)

Grist, Ian

Mitchell, David (Basingstoke)

Grylls, Michael

Moate, Roger

Gummer, JohnSelwyn

Monro, SirHector

Hamilton, Hon A.

Montgomery, Fergus

Hamilton, Michael (Salisbury)

Moore, John

Hampson, Dr Keith

Morgan, Geraint

Hannam, John

Morris, M. (N'hampton S)

Haselhurst, Alan

Morrison, Hon C. (Devizes)

Hastings, Stephen

Mudd, David

Havers, Rt Hon Sir Michael

Murphy, Christopher

Hawksley, Warren

Myles, David

Hayhoe, Barney

Neale, Gerrard

Heddle, John

Needham, Richard

Henderson, Barry

Nelson, Anthony

Heseltine, Rt Hon Michael

Neubert, Michael

Hicks, Robert

Newton, Tony

Higgins, Rt Hon Terence L.

Normanton, Tom

Hill, James

Nott, RtHon John

Hogg, Hon Douglas (Gr'th'm)

Onslow, Cranley

Holland, Philip (Carlton)

Oppenheim, Rt Hon Mrs S.

Hooson, Tom

Osborn, John

Hordern, Peter

Page, John (Harrow, West)

Howe, Rt Hon Sir Geoffrey

Page, Richard (SW Herts)

Howell, RtHonD. (G'ldf'd)

Parkinson, Rt Hon Cecil

Howell, Ralph (NNorfolk)

Parris, Matthew

Howells, Geraint

Patten, Christopher (Bath)

Hunt, David (Wirral)

Pattie, Geoffrey

Hunt, Jobn (Ravensbourne)

Pawsey, James

Hurd, HonDouglas

Penhaligon, David

Irving, Charles (Cheltenham)

Percival, Sirlan

Jenkin, Rt Hon Patrick

Peyton, RtHon John

JohnsonSmith, Geoffrey

Pink, R.Bonner

Jopling, Rt Hon Michael

Pollock, Alexander

Joseph, RtHon Sir Keith

Porter, Barry

Kaberry, SirDonald

Prentice, Rt Hon Reg

Kellett-Bowman, MrsElaine

Price, Sir David (Eastleigh)

Kershaw, Sir Anthony

Prior, RtHon James

Kimball, SirMarcus

Proctor, K. Harvey

King, Rt Hon Tom

Pym, Rt Hon Francis

Kitson, SirTimothy

Raison, Timothy

Knight, MrsJill

Rathbone, Tim

Knox, David

Rees-Davies, W. R.

Lamont, Norman

Renton, Tim

Lang, Ian

Rhodes James, Robert

Langford-Holt, SirJohn

Ridley, HonNicholas

256

Ridsdale, Sir Julian

Thatcher, Rt Hon Mrs M.

Rifkind, Malcolm

Thomas, Rt Hon Peter

Roberts, M. (Cardiff NW)

Thompson, Donald

Roberts, Wyn (Conway)

Thorne, Neil (Ilford South)

Roper, John

Thornton, Malcolm

Rossi, Hugh

Townend, John (Bridlington)

Rost, Peter

Townsend, Cyril D.(B'heath)

Sainsbury, Hon Timothy

Trippier, David

St. John-Stevas, Rt Hon N.

Trotter, Neville

Shaw, Giles (Pudsey)

van Straubenzee, SirW.

Shaw, Michael (Scarborough)

Vaughan, Dr Gerard

Shelton, William (Streatham)

Viggers, Peter

Shepherd, Colin (Hereford)

Waddington, David

Shepherd, Richard

Wakeham, John

Shersby, Michael

Waldegrave, Hon William

Silvester, Fred

Walker, B. (Perth)

Sims, Roger

Walker-Smith, Rt Hon Sir D.

Skeet, T. H. H.

Wall, Sir Patrick

Smith, Dudley

Waller, Gary

Speed, Keith

Walters, Dennis

Speller, Tony

Ward, John

Spence, John

Warren, Kenneth

Spicer, Jim (West Dorset)

Watson, John

Spicer, Michael (S Worcs)

Wells, Bowen

Sproat, lain

Wells, John (Maidstone)

Squire, Robin

Wheeler, John

Stainton, Keith

Whitelaw, Rt Hon William

Stanbrook, Ivor

Whitney, Raymond

Stanley, John

Wickenden, Keith

Steel, Rt Hon David

Wiggin, Jerry

Steen, Anthony

Wilkinson, John

Stevens, Martin

Williams, D. (Montgomery)

Stewart, A. (ERenfrewshire)

Winterton, Nicholas

Stewart, Ian (Hitchin)

Wolfson, Mark

Stokes, John

Young, SirGeorge (Acton)

Stradling Thomas, J.

Younger, Rt Hon George

Tapsell, Peter

Taylor, Teddy (S'end E)

Tellers for the Ayes:

Tebbit, Rt Hon Norman

Mr. Anthony Berry and

Temple-Morris, Peter

Mr. Carol Mather.

NOES

Abse, Leo

Cunningham, Dr J. (W'h n)

Allaun, Frank

Dalyell, Tam

Anderson, Donald

Davidson, Arthur

Archer, Rt Hon Peter

Davies, Rt Hon Denzil (L' lli)

Ashley, Rt Hon Jack

Davies, Ifor (Gower)

Ashton, Joe

Davis, Clinton (Hackney C)

Atkinson, N. (H'gey,)

Davis, Terry (B'ham, Stechf'd)

Bagier, Gordon AT.

Deakins, Eric

Barnett, Guy (Greenwich)

Dean, Joseph (Leeds West)

Barnett, Rt Hon Joel (H'wd)

Dewar, Donald

Bennett, Andrew (St'kp't N)

Dixon, Donald

Bidwell, Sydney

Dobson, Frank

Booth, Rt Hon Albert

Dormand, Jack

Boothroyd, Miss Betty

Douglas, Dick

Bray, Dr Jeremy

Dubs, Alfred

Brown, Hugh D. (Provan)

Duffy, A. E. P.

Brown, R. C. (N'castle W)

Dunnett, Jack

Brown, Ron (E'burgh, Leith)

Dunwoody, Hon Mrs G.

Buchan, Norman

Eadie, Alex

Callaghan, Rt HonJ.

Eastham, Ken

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

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

Campbell, Ian

English, Michael

Campbell-Savours, Dale

Ennals, Rt Hon David

Canavan, Dennis

Evans, loan (Aberdare)

Cant, R. B.

Evans, John (Newton)

Carter-Jones, Lewis

Ewing, Harry

Clark, Dr David (S Shields)

Field, Frank

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

Flannery, Martin

Cohen, Stanley

Fletcher, Ted (Darlington)

Coleman, Donald

Foot, Rt Hon Michael

Concannon, Rt Hon J. D.

Ford, Ben

Conlan, Bernard

Forrester, John

Cook, Robin F.

Foster, Derek

Cowans, Harry

Foulkes, George

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

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

Crowther, Stan

Freeson, Rt Hon Reginald

Cryer, Bob

Garrett, John (Norwich S)

Cunliffe, Lawrence

Garrett, W. E. (Wallsend)

257

George, Bruce

McKelvey, William

Gilbert, Rt Hon Dr John

MacKenzie, Rt Hon Gregor

Golding, John

McNamara, Kevin

Graham, Ted

McTaggart, Robert

Grant, George (Morpeth)

McWilliam, John

Hamilton, James (Bothwell)

Marshall, D (G'gowS'ton)

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

Marshall, Dr Edmund (Goole)

Hardy, Peter

Marshall, Jim (Leicester S)

Harrison, Rt Hon Walter

Martin, M (G'gow S'burn)

Haynes, Frank

Maxton, John

Healey, Rt Hon Denis

Maynard, Miss Joan

Heffer, Eric S.

Meacher, Michael

Hogg, N. (E Dunb't'nshire)

Mikardo, lan

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

Millan, Rt Hon Bruce

HomeRobertson, John

Miller, Dr M.S. (E Kilbride)

Homewood, William

Morris, Rt Hon A. (W'shawe)

Hooley, Frank

Morris, Rt Hon J. (Aberavon)

Howell, Rt Hon D.

Morton, George

Hoyle, Douglas

Moyle, Rt Hon Roland

Huckfield, Les

Newens, Stanley

Hughes, Mark (Durham)

Oakes, Rt Hon Gordon

Hughes, Robert (Aberdeen N)

O'Neill, Martin

Hughes, Roy (Newport)

Orme, Rt Hon Stanley

Janner, Hon Greville

Palmer, Arthur

Jay, Rt Hon Douglas

Park, George

John, Brynmor

Parker, John

Johnson, James (Hull West)

Parry, Robert

Johnson, Walter (Derby S)

Pavitt, Laurie

Jones, Rt Hon Alec (Rh'dda)

Pendry, Tom

Jones, Barry (East Flint)

Powell, Raymond (Ogmore)

Jones, Dan (Burnley)

Prescott, John

Kerr, Russell

Race, Reg

Kilroy-Silk, Robert

Radice, Giles

Kinnock, Neil

Rees, Rt Hon M (Leeds S)

Lambie, David

Roberts, Mberl (Normanton)

Lamborn, Harry

Roberts, Allan (Bootle)

Lamond, James

Roberts, Ernest (Hackney N)

Leadbitter, Ted

Robinson, G. (Coventry NW)

Leighton, Ronald

Rooker, J. W.

Lestor, Miss Joan

Ross, Ernest (Dundee West)

Lewis, Arthur (N'ham NW)

Rowlands.Ted

Lewis, Ron (Carlisle)

Ryman, John

Litherland, Robert

Sever, John

Lofthouse, Geoffrey

Shearman, Barry

Lyon, Alexander (York)

Sheldon, Rt Hon R.

Mabon, Rt Hon Dr J. Dickson

Shore, Rt Hon Peter

McDonald, DrOonagh

Silkin, Rt Hon J. (Deptford)

McElhone, Frank

Silkin, Rt Hon S. C. (Dulwich)

McGuire, Michael (lnce)

Silverman, Julius

McKay, Allen (Penistone)

Skinner, Dennis

258

Snape, Peter

Welsh, Michael

Spearing, Nigel

White, Frank R.

Spriggs, Leslie

White, J. (G'gow Pollok)

Stallard, A.W.

Whitehead, Phillip

Stoddart, David

Whitlock, William

Stott, Roger

Wigley, Dafydd

Straw, Jack

Williams, Rt Hon A. (S'sea W)

Summerskill, Hon Dr Shirley

Wilson, Rt Hon Sir H. (H'ton)

Thomas, Dafydd (Merioneth)

Wilson, William (C'try SE)

Thorne, Stan (Preston South)

Winnick, David

Tilley, John

Woodall, Alec

Tinn, James

Woolmer, Kenneth

Urwin, Rt Hon Tom

Wright, Sheila

Varley, Rt Hon Eric G.

Young, David (Bolton E)

Wainwright.E. (Dearne V)

Walker, Rt Hon H. (D'caster)

Tellers for the Noes:

Watkins, David

Mr. Hugh McCartney and

Weetch, Ken

Mr. Austin Mitchell.

Question accordingly agreed to.
Resolved,
That the Welsh Rate Support Grant Report 1982, a copy of which was laid before this House on 28th January, be approved.
Resolved,
That the Welsh Rate Support Grant Supplementary Report 1982, a copy of which was laid before this House on 28th January, be approved.—[Mr. Nicholas Edwards.]

PROCEDURE (FINANCE)
Ordered,
That Mr. Roger Sims and Mr. Peter Thomas be discharged from the Select Committee on Procedure (Finance) and Mr. Nicholas Lyell, Mr. Kevin McNamara and Mr. Chris Patten be added to the Committee.—[Mr. Boscawen.]

STATUTORY INSTRUMENTS, &c.
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, & c.)

Social Security
That the draft Social Security (Contributions) (Mariners) Amendment Regulations 1982, which were laid before this House on 25th January, be approved.—[Mr. Boscawen.]
Question agreed to.

Orders of the Day

  STOCK TRANSFER BILL
  Order for Second Reading read.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 66 (Second Reading Committees),
  That the Bill be now read a Second time.
  Question agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  Halifax (Industry)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]
  12 midnight
  Dr. Shirley Summerskill: I was provoked to raise the industrial situation in Halifax in an Adjournment debate by two particularly disastrous developments in my constituency that took place in the same week recently. First, the unemployment figure broke through the 6, 000 barrier, with a total of 6, 046 jobless in the town at the last count. The second development was that Carpets International Ltd. a Halifax firm with an international reputation, which has twice been awarded the Queen's Award for Exports, announced that over 500 redundancies were to take place. These tragic events in the same week symbolised the industrial decline in my constituency, a decline which in one way or another affects every factory and every family in Halifax.
  With regard to unemployment, ever since the Industrial Revolution Halifax has been traditionally to some extent protected from severe unemployment by the wide range of its manufacturing industries, although the main ones have been textiles, carpets and engineering. Since May 1979 not only has the actual figure of those unemployed soared to over 6, 000 but the rate of unemployment has risen steeply over a relatively short time. Since this Government took office, it has gone up by over 180 per cent., making it harder for the town's industry to adapt to the change. I hope that the Minister will consider the important factor of the rate of change as well as the total number of unemployed.
  I have not been able to include in the total the hidden unemployment among women who do not register. This could run into thousands because a large proportion of the women in my constituency work outside the home. Halifax is rapidly becoming divided into two nations—the employed and those without a job. As one goes round, one meets groups of people who are divided into those two categories. This is not only socially divisive, but it is an economic disaster for the town and its people.
  Although this debate is about Halifax there is a similar problem in Calderdale as a whole. The Halifax jobless cannot go to the surrounding area for work. In the past three years more than 7, 500 workers have lost their jobs in Calderdale, according to figures just produced by West Yorkshire county council. The figures also showed that only one third of the jobs lost in Calderdale were replaced by new vacancies in the district.
  The factory closures and redundancies are symbolished by the recent announcement by Carpets International Ltd.
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  of over 500 redundancies. That is the latest in a series of blows that Halifax has had to bear. It represents a psychological and economic disaster for the town. The Prime Minister visited the firm before the previous general election, when its proud boast was "We carpet the world". It was founded in the 1800s by Mr. John Crossley and became one of the largest carpet manufacturers in the world. Not only the carpet industry but the textile industry in Halifax has been hit by the massive redundancies that have taken place, especially in West Yorkshire. I am glad to see my hon. Friends from West Yorkshire behind me—the hon. Member for Huddersfield, East (Mr. Sheerman) and the hon. Member for Batley and Morley (Mr. Woolmer).
  Not only have the mills been closing one after another, but no other industry in Britain has suffered as many job losses. Nearly every manufacturing firm in Halifax has been affected in some way or another by Government policies. If they have not closed, they have declared redundancies or people are on short time or, in some way, they are finding business difficult. Mackintosh's Toffees, another internationally famous firm and also a winner of the Queen's Award for Exports is the largest private manufacturing firm in Halifax, but it is complaining about being hit by value added tax, by inflation that is still over 2 per cent. higher than when the Labour Government left office, and by interest rates.
  The engineering and machine tool firms are another part of the backbone of Halifax's industry. In May 1980, John Stirk and Sons closed. Last year, Staveley Machine Tools closed its Asquith division and Modern Foundries has announced its closure. All those closures, together with thousands of redundancies in other firms that I have not named are especially intolerable because there is no alternative work in the town or elsewhere for the jobless. Also, if Britain comes out of the recession, where are the factories to provide the jobs? As training is totally inadequate, where will the skilled work force come from? Britain will depend upon towns such as Halifax for its future prosperity. Some of its industry must be preserved before it is too late.
  Apart from reversing their failed monetarist policies, what can the Government do? My immediate request to the Minister is to respond positively and urgently to any requests that he receives for financial help under the Industry Act 1975 from firms large and small in Halifax and Calderdale. The same applies to requests for help from EEC funds. The preservation of existing jobs and the creation of new ones is of paramount importance if Halifax's industry is to survive.
  Secondly, I urge the Minister and his right hon. Friend the Secretary of State for Industry to retain Calderdale's assisted area status, which it is due to lose following a Government decision taken as long ago as 1979. The Minister has agreed to meet a delegation from the Calderdale Economic Regeneration Advisory Committee on 25 February and we shall press the case strongly upon him. That committee represents a cross-section of the working life of Halifax—the trade unions, the chamber of commerce, the chamber of trade and councillors. I shall accompany the delegation.
  Under the Government's policy of providing help only in the relatively few places where it is most needed, the intermediate assisted areas of today will become the totally depressed areas of tomorrow. Help from central Government and the EEC is essential if individual firms

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  are to survive or improve and if the environment in Halifax and the surrounding area is to be improved and made to attract new industry. What is the sense in depriving Halifax of funds when the result is to be the further decline of its industry, so that assistance is provided by the Government only when it is too late?
  Thirdly, I ask the Minister to press the merits of Calderdale as a site for the computer and electronics training centre for young people. His colleague the Minister for Industry and Information Technology has put Calderdale on his list for consideration. Any new industries of any kind would be welcome in Halifax. They would help to resuscitate the town and the new firms would profit from the enterprise and traditional skills to be found in the town.
  Mr. Barry Sheerman: Does my hon. Friend accept that while we would welcome new industry, in the short term the necessity is for the preservation and resuscitation of old industry, much of it good and highly sophisticated, such as the three firms under threat in Huddersfield, Halifax and Batley and Morley? I refer to some of the firms that the Minister should have visited only two weeks ago. He pulled out of that visit at short notice. Does my hon. Friend accept that a new visit by the Department of Trade to look at those companies at the moment under threat, with over 2, 000 jobs at risk, would be beneficial?
  Dr. Summerskill: Yes, we need help for both the existing firms and for new firms. We want both to preserve jobs and create them—we must combine the two.
  Within the limits of the massive cuts in the rate support grant imposed by the Government, the local authority in Halifax is making every effort to improve the environment, the amenities and the services and to attract new industry to the town.
  Fourthly, special help is needed to enable the textile and carpet industries in Halifax to resist unfair competition from developed industrial countries. I emphasise developed countries because I do not share the view that we should try to resist trade from the poorer developing countries. I hope that the Minister at the Department of Trade will strengthen the milti-fibre arrangement. Will the Department of Industry consider giving some direct financial help to the textile industry?
  A scheme has been drawn up and implemented by the Belgian Government to give specific support to the textile industry in that country. Will this Government follow suit before it is too late to save what remains of the textile industry? What consideration have the Government given to similar help to the machine tool industry, at least to sustain it until the recession is over?
  I hope that the hon. Gentleman will bear in mind the special difficulties that face Halifax, in particular, and West Yorkshire in general. That area was the cradle of the Industrial Revolution, which has sustained the prosperity of this country, and it is wrong that these traditional industries should be allowed to die. I hope that the hon. Gentleman can answer the specific points tat I made at the end of my speech.
  12.14 am
  The Under-Secretary of State for Industry (Mr. John MacGregor): As is the custom, I congratulate the
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  hon. Member for Halifax (Dr. Summerskill) on securing the Adjournment debate and raising two topical matters at the outset of her speech, when she spoke about Carpets International Ltd. and the increase in unemployment in Halifax and Calderdale generally.
  The hon. Lady mentioned a wide range of issues, and I hope that I shall succeed in covering a number of them tonight. However, as she said, she is leading a deputation from Calderdale to see me shortly. That places me in some difficulty, because clearly I want to hear representations from the deputation. Therefore, if I do not cover all the matters that she has raised this evening, I shall certainly do so on that occasion.
  Less than a year ago, the hon. Lady obtained an Adjournment debate to seek the continuance of assisted area status for Calderdale—a matter that she raised again tonight. She will recall that on that occasion she and I had to stay up all night, and eventually we reached the debate in the middle of the afternoon. On this occasion the House has been more generous to us. On that occasion we went over the general principles relating to assisted area status, so I am sure that she does not want me to go over them again, as they are on the record.
  I have agreed to receive a deputation from the metropolitan borough of Calderdale. As she knows, the meeting was first arranged for 21 December, but unfortunately the weather at that time made it impossible, so I agreed to a new date in January. By then, travelling was again uncertain—this time due to the regrettable withdrawal of labour by ASLEF. So we fixed a date later this month on Thursday 25 February.
  I know, too, that my hon. Friend the Member for Brighouse and Spenborough (Mr. Waller), and expecially my hon. Friend the Member for Sowerby (Mr. Thompson), who is here this evening, although there are difficulties for him as a Government Whip, wish to be associated with the deputation.
  First, I shall make some general points. As the hon. Lady said, the Government are continuing with their regional industrial policy of concentrating on the areas of greatest need. I do not wish to minimise the unemployment problems in her constituency, but there are areas where regrettably, unemployment is persistently high and where, many more thousands of people are without jobs than in the areas that she mentioned. In concentrating on the areas of greatest need and in discussing unemployment we are acutely aware of the difficulties which the world recession has brouht to the whole country. However, when it comes to regional industrial policy, I am sure that we are right to concentrate on the areas of greatest need.
  The hon. Lady said that we were concentrating on relatively few assisted areas. I must tell her that, even under the changes announced in July 1979, which will come into operation finally in August of this year, as the transitional period comes to an end 26 per cent. of the country will still be covered by assisted area status. Therefore, it can hardly be said that we are concentrating on relatively few areas. She urged the Government to consider retaining the existing area status for Calderdale and Halifax. We shall discuss this matter in considerable detail with the deputation, and I do not want to pre-empt our discussion on that occasion.
  However, I shall mention one or two of the factors which will be relevant in our consideration of the matter. The first is the point that I have already mentioned about

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  concentrating on the areas of greatest need. There has been a regrettable rise in unemployment, which the hon. Lady mentioned in her opening remarks. Let us look at the levels as a whole. In Halifax, in January this year, unemployment was 11.9 per cent. That compares with the rate for West Yorkshire as a whole of 12.7 per cent., and in Great Britain a rate of 12.5 per cent. I have the unemployment figures for 13 of the travel-to-work areas in Yorkshire, Lancashire and Humberside, all of which are due to lose their assisted area status in August next. Of those 13, 11 have higher unemployment than Halifax. Clearly we have to take that fact into account in considering the hon. Lady's request.
  I have concentrated so far on the level of unemployment, but the hon. Lady will know from our previous debates that other factors apart from unemployment must be taken into account in considering individual claims for assisted area status. Those factors are listed in the Industry Act 1972. We have to bear in mind whether the decline in unemployment is persistent and likely to last for a long time, as well as other factors such as geographical location and the opportunity for other jobs. All those factors have to be taken into consideration. However, I have no doubt that we shall discuss this matter at length when she brings the deputation to see me.
  Mr. K. J. Woolmer: Is the Minister aware that in West Yorkshire, where textile towns have been badly hit, his words will seem extremely complacent? In Batley unemployment among males and youths is as high as 28 per cent. Belgium and France are introducing schemes to help the textile industry. Why does not the Department of Industry consider the problems of the textile areas as seriously and vigorously as our Continental partners appear to do?
  Mr. MacGregor: There is certainly no sense of complacency in what I am saying. I was referring to the problems of Halifax—the subject of the Adjournment debate—and not to the other areas in West Yorkshire. Our policy concentrates aid on the areas of greatest need, and we must take into account the fact that unemployment in Halifax is less that the national average.
  It is relevant to point out that some £3, 345, 000 of aid has been either offered to or accepted by firms in Halifax since May 1979, and that has assisted a considerable number of projects in the town.
  The hon. Member for Batley and Morley (Mr. Woolmer) referred to the problems of the textile industry. Like others, that industry is being forced to adapt to present conditions in order to regain competitiveness. Where the Government can, they are helping considerably. In that context, the multi-fibre arrangement negotiations are crucial. The hon. Member for halifax also referred to unfair competition from developed countries. She put the emphasis on unfair competition. She will know that when there is evidence of anti-dumping we are prepared to act. I shall refer later to the problem of State aid in other European member countries.
  The protocol extending the multi-fibre arrangement—adopted in Geneva on 22 December after long and often acrimonious negotiations—provides for all the United Kingdom's major objectives. Because the multi-fibre arrangement is solely a framework agreement, the practical details will have to be settled in the bilateral negotiations this year with each supplier country. The
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  Community has stated that if it is unable to negotiate satisfactory bilateral agreements by the end of this year it will withdraw from the multi-fibre arrangement. The United Kingdom insists that this link must be maintained and has made it clear that it will be unable to agree to Community participation in the renewed multi-fibre arrangement unless satisfactory global ceilings are agreed to cover imports from all low-cost suppliers.
  In those bilaterial discussions the United Kingdom Government will continue to seek a regime that is tougher and more effective than the present arrangement. That is a clear indication of the type of assistance that the Government are giving to the textile industry.
  The Minister of State for Industry and Information Technology will be meeting the Confederation of British Wool Textiles next month when the Werner report on the industry's competitiveness will be discussed.
  The hon. Lady also raised the question of other European countries' State aids for the textile and clothing industries. We are aware of those schemes and have urged the European Commission to apply vigorously the relevant treaty provisions. At the same time, the House should know that the textile and clothing industry receives a considerable amount of aid from the Government. In 1980-81 that aid totalled over £80 million and in 1981–82 a further £41 million has been offered or paid so far. Those are not inconsiderable sums.
  The Government fully appreciate the problems that face the carpet industry, but, as my right hon. Friend the Prime Minister made clear in a recent exchange in the House with the hon. Lady, rationalisation schemes designed to improve competitiveness are matters for the industry. understand that the levelling of demand and, indeed, the rapid expansion of capacity in the early 1970s, brought about a substantial excess of manufacturing capacity., which by 1977 was already causing the industry some problems. It is fair to say that no agreement on any rationalisation scheme has yet been reached within the industry. However, if it were, the Government would be prepared to consider whether any of the forms of financial aid already available are appropriate to assist such rationalisation.
  The hon. Member for Halifax referred particu1arly to Carpets International Ltd. She will know that the sad closure decision that has been announced is a commercial decision by the company. The company as a whole made trading losses of £6.4 million in 1980 and £2.24 million in the first half of 1981. She asked me whether the Department was prepared to consider quickly any applications made for financial aid under existing schemes, such as selective financial assistance under the Industry Act. Yesterday representatives from the management and trade unions at Carpets International held discussions with the Department of Industry's regional office. Officials have fully explained the aid available under section 7. It would be for the company to approach the Department with any proposals for a project for assistance.
  The hon. Member referred to the need to improve the environment in the Halifax area. The derelict land clearance status that her constituency will still have after August 1982 is of great importance. As she will know, changes have been announced in the way in which derelict land grants will be paid. My right hon. Friend the Secretary of State for the Environment will allocate derelict land grants in the corning year directly, and on the

  265
  basis of need. He will consider sympathetically applications for obsolete buildings. I am well aware that there are problems about obsolete buildings in the hon. Lady's constituency.
  The hon. Member for Halifax will know that the Department of the Environment sent a letter on 22 December to all local authorities. I hope that the metropolitan borough of Calderdale has studied the letter and will respond positively to it. I was asked what the Government would do to attract new industry to the area. The role that small firms can play is important. Indeed, I know that that is important in the hon. Lady's constituency. The written representation that I received from Calderdale prior to the deputation stressed that 93 per cent. of the 1, 500 local firms employ fewer than 100 people. That is an important element in the regeneration of our economic base, as some of our more traditional industries, such as textiles and engineering, have declined.
  Mr. Sheerman: What evidence is there in Halifax and in West Yorkshire that small firms make up for the tremendous losses experienced since the Conservative Party came to office in May 1979? How many new jobs have been created and how many have been lost? May we have the figures?
  Mr. MacGregor: Jobs have been lost because for many years Britain's competitiveness has declined and we have had to deal with the fundamental reasons for that industrial and economic decline during a world recession. Not only in West Yorkshire but throughout the country many painful adjustments have had to be made. I should not expect the expansion of small firms on which we have embarked to have an immediate and dramatic impact. However, in constituencies such as Halifax, where there
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  has been a heavy dependence on traditional industries, a strong base of small firms will increasingly help to provide that restructuring.
  Mr. Sheerman: First-class firms are going out of business.
  Mr. MacGregor: The hon. Member for Halifax initiated the debate, and I am trying to concentrate on the problems of Halifax.
  The hon. Lady will know that the Government have taken many steps to try to assist in the expansion of small businesses. That will prove increasingly relevant as the recession clears. Some of the points raised by the hon. Lady relate specifically to the deputation that is to see me. One point relates to the small workshop allowance. The 100 per cent. industrial buildings allowance which was introduced in the Finance Act 1980 is clearly leading to a considerable increase in the number of small premises available.
  The Government are aware of the representations that have been made about the small workshops allowance and the possible difficulties that relate to some of the definitions applicable to it. That is being considered at the moment. There was an Adjournment debate on the subject not long ago to which my hon. Friend the Financial Secretary to the Treasury replied. That question is being considered at the moment in relation not only to requests being made to us but to the Green Paper on the future of corporation tax.
  Time prevents me from going into some of the other points raised by the hon. Lady, but I assure her that I shall do that when she comes with the deputation to see me. I look forward to having discussions with it shortly.
  Question put and agreed to.
  Adjourned accordingly at half-past Twelve o'clock.

TRADE
  Coastguard Service
  Coastguard Service
  Postal Charges
  Postal Charges
  Monopolies and Mergers Commission
  Monopolies and Mergers Commission
  Laker Airways
  Laker Airways
  Burns, Scalds and Flammable Material
  Burns, Scalds and Flammable Material
  United States (Steel Imports)
  United States (Steel Imports)
  Sir Freddie Laker
  Sir Freddie Laker
  Republic of Ireland (Air Services)
  Republic of Ireland (Air Services)
PALACE OF WESTMINSTER
  Disabled Persons (Access)
  Disabled Persons (Access)
PRIME MINISTER
  Factory Closures
  Factory Closures
  Council of Europe
  Council of Europe
  Engagements
  Engagements
  Trident
  Trident
  Trades Union Congress
  Trades Union Congress
  Civil Service (Facilities Agreement)
  Civil Service (Facilities Agreement)
FOREIGN AND COMMONWEALTH AFFAIRS
  Zimbabwe
  Zimbabwe
  Philippines (Ministerial Visit)
  Philippines (Ministerial Visit)
  Cyprus (Foreign Minister)
  Cyprus (Foreign Minister)
  Diego Garcia
  Diego Garcia
CIVIL SERVICE
  East Kilbride
  East Kilbride
  Administrative Forms (Simplification)
  Administrative Forms (Simplification)
AGRICULTURE, FISHERIES AND FOOD
  Food Imports
  Food Imports
  White Rot
  White Rot
TRANSPORT
  Maryport Harbour
  Maryport Harbour
  Rubber Speed Ramps
  Rubber Speed Ramps
  A312
  A312
  M1—M6 (Traffic Flow)
  M1—M6 (Traffic Flow)
  Motorways (Signs)
  Motorways (Signs)
  Aire Valley Trunk Road Scheme
  Aire Valley Trunk Road Scheme
  Roads (White Paper)
  Roads (White Paper)
ENERGY
  Oil Prices
  Oil Prices
  Sizewell (Inquiry)
  Sizewell (Inquiry)
  Radioactive Waste
  Radioactive Waste
HOME DEPARTMENT
  Welsh Fourth Television Channel
  Welsh Fourth Television Channel
  Mr. Lawrence Roland
  Mr. Lawrence Roland
  Rape
  Rape
  Tattooing of Minors Act 1969
  Tattooing of Minors Act 1969
  Deportations
  Deportations
  Air Weapons
  Air Weapons
  Informants (Insurance Payments)
  Informants (Insurance Payments)
  Prisons (Inspectorate's Visits)
  Prisons (Inspectorate's Visits)
  Prison Population
  Prison Population
  Immigration Act Powers
  Immigration Act Powers
  Royal Prerogative
  Royal Prerogative
  Citizens Band Radio
  Citizens Band Radio
  Mr. Ian Shackleton
  Mr. Ian Shackleton
  Prevention of Terrorism (Temporary Provisions) Act 1976
  Prevention of Terrorism (Temporary Provisions) Act 1976
  Intruder Alarms (Pensioners)
  Intruder Alarms (Pensioners)
SCOTLAND
  Scottish Development Agency (Factory Space)
  Scottish Development Agency (Factory Space)
ENVIRONMENT
  Water Services (Stop Cocks and Stop Valves)
  Water Services (Stop Cocks and Stop Valves)
  Private Contractors
  Private Contractors
  Partnership Authorities and Committees
  Partnership Authorities and Committees
  Toxteth
  Toxteth
  Wildlife and Countryside Act 1981
  Wildlife and Countryside Act 1981
  "Coal and the Environment"
  "Coal and the Environment"
  Royal Commission on Environmental Pollution
  Royal Commission on Environmental Pollution
  Council House Sales
  Council House Sales
  Housing Investment
  Housing Investment
NATIONAL FINANCE
  Invalidity Pension
  Invalidity Pension
  Consumer Prices
  Consumer Prices
  Wine (Revenue)
  Wine (Revenue)
  Personal Taxation
  Personal Taxation
  Tax Allowances
  Tax Allowances
  Nationalised Industries (Output)
  Nationalised Industries (Output)
  Social Security (Income Tax)
  Social Security (Income Tax)
  Personal Savings
  Personal Savings
  Public Corporations (Income)
  Public Corporations (Income)
  Personal Tax Allowances (Indexation)
  Personal Tax Allowances (Indexation)
  £ Sterling
  £ Sterling
  Distraint Action (Inland Revenue)
  Distraint Action (Inland Revenue)
DEFENCE
  Territorial Army (Recruitment)
  Territorial Army (Recruitment)
  Nurses (Pay)
  Nurses (Pay)
  Defence Establishments (Wales)
  Defence Establishments (Wales)
  Attachment Orders
  Attachment Orders
SOCIAL SERVICES
  Trade Union Subscriptions (Health Service Employees)
  Trade Union Subscriptions (Health Service Employees)
  Health Services (Performance Indicators)
  Health Services (Performance Indicators)
  Regional Health Authorities
  Regional Health Authorities
  Benefits
  Benefits
  Information Surgeries
  Information Surgeries
  Tobacco Industry
  Tobacco Industry
  Overseas Students (Health Charges)
  Overseas Students (Health Charges)
  Mabledon Hospital, Dartford
  Mabledon Hospital, Dartford
  Supplementary Benefit
  Supplementary Benefit
  Departmental Offices
  Departmental Offices
  Rape Victims (Advice Centres)
  Rape Victims (Advice Centres)
  Urea Formaldehyde Foam (Hospitals)
  Urea Formaldehyde Foam (Hospitals)
  St. George's Hospital Site
  St. George's Hospital Site
WALES
  Council Houses
  Council Houses
  Rent Rebates
  Rent Rebates
  Housing Revenue Accounts
  Housing Revenue Accounts
  Employment Statistics
  Employment Statistics
  Afforestation
  Afforestation
  Factory Space
  Factory Space
  Water
  Water
EMPLOYMENT
  Foreign Nationals
  Foreign Nationals
  Distributive Industry (Training)
  Distributive Industry (Training)
  Homeworking
  Homeworking
  Unemployed Married Women
  Unemployed Married Women
  Nuclear Installations Inspectorate
  Nuclear Installations Inspectorate
  Unemployment Statistics
  Unemployment Statistics
  Health and Safety at Work etc. Act 1974.
  Health and Safety at Work etc. Act 1974.
  Registered Vacancies
  Registered Vacancies
  Retired Women
  Retired Women
  May Bank Holiday
  May Bank Holiday
  Steel Industry
  Steel Industry
INDUSTRY
  Regional Preferential Expenditure
  Regional Preferential Expenditure
  New Towns
  New Towns
OVERSEAS DEVELOPMENT
  International Children's Emergency Fund
  International Children's Emergency Fund
  Overseas Development Administration (East Kilbride)
  Overseas Development Administration (East Kilbride)
NORTHERN IRELAND
  Private Manufacturing
  Private Manufacturing
  Work Force (Statistics)
  Work Force (Statistics)
  Unemployment Statistics
  Unemployment Statistics
  Youth Opportunities Programme
  Youth Opportunities Programme
  Royal Ulster Constabulary
  Royal Ulster Constabulary
  De Lorean Car Company
  De Lorean Car Company
EDUCATION AND SCIENCE
  Youth Training Scheme
  Youth Training Scheme
  School Standards
  School Standards
  Animal Breeding Research Organisation
  Animal Breeding Research Organisation
  Scottish Universities
  Scottish Universities
  Teacher Training
  Teacher Training
  Part-time Education
  Part-time Education
  Mathematics
  Mathematics
  Higher Education (Financing)
  Higher Education (Financing)
  Scientific Satellites
  Scientific Satellites
  Student Union Financing
  Student Union Financing
  School Buses
  School Buses
  School Closures
  School Closures
  Assisted Places
  Assisted Places
  Polytechnics
  Polytechnics
  Parental Freedom of Choice
  Parental Freedom of Choice
  Professional Association of Teachers
  Professional Association of Teachers
  Teachers' Council
  Teachers' Council
  Universities
  Universities
  Section 12 Proposals
  Section 12 Proposals
  Staff-student Ratios
  Staff-student Ratios
  Secondary School Pupils
  Secondary School Pupils
  School Transport
  School Transport
  Teachers (Dismissal)
  Teachers (Dismissal)
  "Alternative to Domestic Rates"
  "Alternative to Domestic Rates"
  Glue Sniffing
  Glue Sniffing
  Sheffield (Sixth Forms)
  Sheffield (Sixth Forms)
  Ealing
  Ealing
  Teachers (Criminal Offences)
  Teachers (Criminal Offences)

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

Charities and Local Authorities
Baroness Faithfull: 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 steps can be taken to prevent charities in the social services sector from closing down or curtailing their work due to lack of use by local authorities.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Elton): My Lords, it is for the local authorities themselves to decide how far they will use the facilities provided by voluntary organisations; voluntary organisations do consequently need to know what facilities the local authorities require, and how they might adapt to the growing need for non-residential services. As a first step we have offered the services of the Department of Health and Social Security to help the National Council of Voluntary Child Care Organisations to mount a conference on this. We are considering what more we might do to help other groups.
Baroness Faithfull: My Lords, I thank my noble friend the Minister for that reply. Is he aware that, despite the very good work done by many voluntary organisations, the local authorities, by virtue of the cut-back in expenditure, are finding themselves unwilling or unable to use the voluntary sector and, therefore, in many cases clients are not receiving the best kind of service that they might otherwise do? Can my noble friend comment on that?
Lord Elton: My Lords, in general local authorities do share our perception of the importance of the contribution of voluntary agencies. I would direct the attention of my noble friend to the report of the Association of Directors of Social Services published last October. Also, in 1980–81 grants by local authorities to voluntary organisations were £22½ million as against £l5½ million the year before. It does not sound entirely like cuts to me.
Lord Gridley: My Lords, in view of the Minister's reply, can he inform me why, at a time of economic difficulty, the local authorities are not making greater use of the charities in this connection?
Lord Elton: My Lords, the answer to that question—if it were full—would be extremely long and complex. But I did try to hint to your Lordships in my principal Answer that sometimes voluntary organisations are
452
not adapting themselves to the changing needs of local authorities. Some of them are doing so. I think that I shall not single out for mention individual charities, but some of them have made great progress in the changes in the provision they make, and they do not have these difficulties.
Lady Kinloss: My Lords, would the Minister not agree that VAT is an unfair tax on charities, because commercial companies can recover their VAT on their expenses and local authorities do not pay VAT on the same kind of services as provided by the charities?
Lord Elton: My Lords, I am well aware of the issue to which the noble Lady refers. It is an issue, of course, for Treasury Ministers, but it is also much too close to the Budget for me to give any reply which would colour her expectations.
Lord Cledwyn of Penrhos: My Lords, in the light of what has been said, will the noble Lord say more about the conference to which he has referred and which may, in view of the questions which have been put to him by noble Lords, assume a rather greater importance? When is this conference to be held? Will it be representative of the whole of Britain, or will it be restricted to England? Who will be represented in the conference and what will be its terms of reference?
Lord Elton: My Lords, I am much obliged to the noble Lord for his interest. It is intended to bring all agencies concerned with this problem, both voluntary and local authority, together with the help of the department, so that we can assist them to adapt their provision to the changing needs of local authorities. It will take place early in the summer. I can be more precise to the noble Lord in a week or two when I shall write to him.
Lord Molloy: My Lords, is the Minister aware that the charities referred to in the original Question have to work with the staffs of local authorities? Indeed, they work as a team. What is really happening is that because the local authorities are being, in my view, unjustly hurt by, and have to endure, cuts in a very sensitive area, their staffs are reduced and there are not enough to liaise with the local authorities.
Lord Elton: My Lords, the noble Lord always introduces a predictable perspective into the problem he sees. I did say in my second answer that the local authorities themselves had provided £7 million more last year than the year before. That may have been more or less difficult for other reasons, but it still represents an increase.
Baroness Faithfull: My Lords, I should like to ask my noble friend the Minister whether he could bring to the notice of the Chancellor of the Exchequer in another place, the fact that, for instance, the Minister reported in the House last week that the NSPCC were to have a grant of £250,000, but in VAT they are paying £130,000 to £140,000. Moreover, from the point of view of the partnership with local authorities,

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would he not agree that, for instance, Dr. Barnardo's pay £500,000 in VAT and if they did not have to pay that they would be able to supply the local authorities with a better service?
Lord Elton: My Lords, I have already declined to follow that fascinating avenue so close to the Budget. However, I would correct my noble friend. I think that the grant to the NSPCC was £200,000. Perhaps my noble friend will recall also the grant to Mencap of £100,000; to MIND of £100,000, to the Spastics of £100,000 and to the National Schizophrenia Fellowship of £10,000. Your Lordships sometimes tend to concentrate only on the shortcomings of the Government; I think that in this respect we have not done too badly.

UN World Disarmament Campaign
2.42 p.m.
Lord Jenkins of Putney: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what are their present observations on the recommendations of the expert group to the United Nations General Assembly that a world disarmament campaign be organised under the auspices of the United Nations.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): My Lords, the resolution adopted by the General Assembly invites Governments to submit their suggestions and comments on implementing the report to the Secretary-General by 15th April. We shall do so, in concert with our European partners. Meanwhile we are exerting ourselves to provide full, balanced and objective information on arms control and disarmament matters to the British public.
Lord Jenkins of Putney: My Lords, in view of the widespread belief that Her Majesty's Government are more interested in nuclear rearmament than in disarmament, will the noble Lord take whatever steps he can to disprove that belief?
Lord Trefgarne: My Lords, anybody who has listened to the exchanges on these matters in your Lordships' House in recent weeks would, I think, hardly have arrived at that conclusion. Certainly we accept the importance of disarmament matters and, indeed, we accept the importance of the dissemination of disarmament information on a wide scale, as I implied in the last sentence of my main Answer.
The Earl of Lauderdale: My Lords, can my noble friend tell the House whether the proposed disarmament campaign might have some effect on the arrest of peace campaigners in East Germany and also on the disappearance from time to time of dissenters in Russia?
Lord Trefgarne: My Lords, I must confess that I do not think it will have the slightest effect.
Lord Mayhew: My Lords, is the noble Lord aware that there has already been organised in this country a world disarmament campaign, to which many important bodies and several political parties have affiliated, including my own and that of the noble Lord, Lord Jenkins?
Lord Trefgarne: My Lords, I am aware of the campaign to which the noble Lord refers, which, I think I am right in saying, is led by the noble Lord, Lord Brockway, and the noble Lord, Lord Noel-Baker. But I do not think that that campaign is a unilateral campaign, which I believe is the preferred course of the noble Lord, Lord Jenkins of Putney.
Lord Brockway: My Lords, is the Minister aware that the world disarmament campaign in this country has had negotiations in New York with the Experts' Committee set up by the United Nations General Assembly, and that those negotiations have led to the likelihood that the Experts' Committee will propose to the United Nations an international campaign to secure world disarmament, as demanded by the Assembly in 1978?
Lord Trefgarne: My Lords, I am not aware of the discussions to which the noble Lord refers, but of course Her Majesty's Government have constantly supported proposals which would lead to balanced and verifiable measures of disarmament in whatever fora.
Lord Clifford of Chudleigh: My Lords, will the noble Lord bear in mind, from an historical point of view, the effect of the Peace Pledge Union in encouraging the last war, and will he point out the similarity between that and the CND movement, to which the noble Lord referred?
Lord Trefgarne: My Lords, I think that the shortcomings of the various disarmament moves which took place prior to the Second World War were shortcomings which we seek to avoid now and, so far as I am aware of them—and I confess that it was long before my time—those shortcomings were that they were neither balanced nor verifiable.
The Earl of Onslow: My Lords, is my noble friend not aware that we would all much rather spend money on disarmament, on hospitals, on roads and on other things of social use, but that, when we see what has happened in Afghanistan, Poland, and Angola and the Berlin Wall—which is a horror and an affront to all human dignity—we must keep our own proper defences in good and upright order?
Lord Trefgarne: My Lords, my noble friend is, of course, right when he implies, as he does, that we have to take the Soviet Union's actions into account, and not their words.
Baroness Llewelyn-Davies of Hastoe: My Lords, is the noble Lord aware that those of us who were around

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during the Peace Pledge Union and the rest of it would not for one moment accept that they were unbalanced in any sense at all? They were very strongly backed by the majority of people in this country. Further, although one accepts his sincerity and the belief of the Government in trying to get disarmament, can I ask him not to adopt this political attitude of trying to separate the unilateralists from the multilateralists? Would he accept that he gives the impression that that is more important to him in answering these questions than in trying to attain the most important thing of all, which is world disarmament?
Lord Trefgarne: My Lords, I think that there is a very distinct difference between unilateral disarmament and multilateral disarmament. This Government support measures of balanced and verifiable multilateral disarmament. We do not support the approach which the noble Lord, Lord Jenkins of Putney, with all sincerity advances, that we should disarm unilaterally.
As to the various disarmament measures which occurred before the Second World War, I do not think that the noble Baroness remembers them either.
Lord Kennet: My Lords, is the noble Lord in a position to give the House any news of the probable date when the strategic arms reduction talks will begin? —which have been delayed by the United States as a result of events in Poland.
Lord Trefgarne: My Lords, I am afraid that I am not able to give the House a date when those talks will recommence. That, of course, is a matter for the Soviet Union and the United States to decide between themselves. The United Kingdom is not directly involved in those talks, as the noble Lord will know. But I hope that it will be before too long.
Lord Jenkins of Putney: My Lords, as my name has been brought into the matter, is the noble Lord aware that I am on the executive of the world disarmament campaign—the multilateralist body—as well as being connected with the Campaign for Nuclear Disarmament —the unilateralist body? Is he not further aware that this proves that multilateralism and unilateralism are complementary to, and not in competition with, each other? As I cannot hope to convert the noble Lord to unilateralism, will he do what he can to convert some of his noble friends to real multilateral disarmament?
Lord Trefgarne: My Lords, I have no need to convert my noble friends to genuine multilateral disarmament because they already believe in it. As to the assertion that the noble Lord adheres to both schools of thought, I am afraid that that puzzles me all the more.

Prisoners: Possible Amnesty
2.50 p.m.
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will declare an amnesty for all prisoners not guilty of violent offences on the occasion of the birth of a child to the Princess of Wales, similar to the amnesties granted by other Governments on historic occasions.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): My Lords, the Government have no plans for such an amnesty.
Lord Brockway: My Lords, may I ask the Minister: does he not agree that something must be done about the overcrowding in English prisons, which governors have described as dustbins and the prison inspectorate has said are deplorable and degrading? Has the noble Lord noted the report today by the Prison Reform Trust that three men in a cell are so crowded with furniture that they can hardly move? Is there not a serious danger of unrest not only among prisoners but prison officers'? Would not this be an occasion to seek a remedy of that situation?
Lord Belstead: My Lords, the noble Lord asks whether something should be done. The difficulty is that an amnesty of the kind envisaged by the noble Lord would set aside the sentence of the court in an arbitrary way. Also it would of course do nothing to reduce the numbers of those receiving custodial sentences thereafter. Therefore, although I agree with a certain amount of what the noble Lord said in his supplementary question, I think that his own plan would be neither desirable nor effective.
The Earl of Cork and Orrery: My Lords, can my noble friend say what Her Majesty's Government expect in the way of violent offences on the occasion of the birth of a child to the Princess of Wales'?
Lord Belstead: My Lords, the further difficulty with this particular plan is that it picks out non-violent offenders as qualifying for an amnesty. Over half the prison population today are serving offences against property, such as burglary and theft; hardly appropriate for immediate release.
Lord Wigoder: My Lords, can the noble Lord say what would be the effect on the crime rate of announcing an amnesty several months in advance?
Lord Belstead: Not good, my Lords.
Lord Hunt: My Lords, will the Minister accept that I am no less concerned, along with many of your Lordships, about the overcrowding and dilapidation that exists in many of our prisons? But would he not agree that it would be quite inappropriate to involve indirectly or directly members of the Royal Family in ameliorating this deplorable situation, however desirable the result and no matter how joyous the event?
Lord Belstead: My Lords, I agree with the noble Lord, Lord Hunt.
Viscount Massereene and Ferrard: My Lords, would my noble friend agree that the commonsense method to do away with overcrowding in prisons would be to build more prisons? It would also provide employment. It seems to me a very simple problem.
Lord Belstead: My Lords, that is what we are doing; but we are just starting to do it, and, although it may be simple, it is going to take some time.
Lord Avebury: My Lords, would the Minister agree that recently published research by the Home Office itself indicates that dangerousness is not a predictable characteristic, and that therefore to single out persons who commit certain classes of offence as being less eligible for consideration for early release is not a satisfactory means of protecting the public against serious harm? In view of that, does not the Minister think that the non-eligibility of category A prisoners for consideration for parole is a serious matter, and that there should be some means whereby these prisoners could get their categorisation reviewed so that they might qualify for earlier release?
Lord Belstead: My Lords, there is of course a provision for early release—Clause 26—in the Criminal Justice Bill which is in Committee in another place, but only as a last resort to be decided by both Houses of Parliament and in order to prevent what, in effect, would be a breakdown in the prison system. That includes obviously—and I say "obviously" because that is the Government's view—consideration of what sort of classes of prisoner might be included in that unhappy event. Clearly the noble Lord, Lord Avebury, and the Government do not agree on this particular point, and I suggest that we should wait to discuss this further when that Bill arrives in your Lordships' House.
Lord Brockway: My Lords, may I ask the Minister, is it not the case that a number of Governments have on historic occasions granted amnesty to a large number of prisoners? Is there any evidence at all that, when they have done that, crime has increased in their communities?
Lord Belstead: My Lords, of course, this has been done recently in France. I reply in the negative: I am not aware that crime has decreased.

Peace and War: Relative Costs
2.55 p.m.
Lord Shinwell: 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 present an estimate of the financial cost which would be incurred in the event of conflict arising from aggression by another nation over a period of six months, as compared to the cost of a similar period of peace.
The Minister of State for Defence Procurement (Viscount Trenchard): My Lords, the noble Lord, Lord Shinwell, will understand my difficulties in attempting to answer this Question. Much depends on what assumptions one makes about the nature and intensity of the aggression we would face. It is worth noting that, in the early years of the Second World War, expenditure was of the order of 40 per cent. of national income. With today's much more powerful and sophisticated weaponry I would imagine the figure could be even higher. This contrasts with our present defence budget of around 5 per cent. of the gross domestic product. It is obvious that, if we failed in our aim of deterring aggression and preserving the security of our peoples, the cost to the nation would be enormous.
Lord Shinwell: My Lords, is the noble Minister aware that I regard that as a very ambiguous and unsatisfactory Answer? It seemed to be a collection of non sequiturs. I only wanted to ascertain from the Minister whether the Government stand by their defence policy, or do they feel weak because of opposition both from their opponents and from their friends? What I am trying to demonstrate in this Question is that first of all I want to help the Government. I want to wipe the floor with those people who refuse to allow the country to provide defence organisation and expenditure in peacetime in order, if possible, to create a deterrent against a great conflict which would prove to be devastating, and mean ruin, bankruptcy and privation for our country.
Viscount Trenchard: My Lords, I entirely agree with the noble Lord. I hope that he will read my Answer to his Question in Hansard, the direction of which was designed fully to support the sentiments that he has just mentioned. On any figure that I can give on cost it is all too evident that the cost of war is very many times the cost of keeping the peace by deterrence. Perhaps the noble Lord will read my Answer. I do not think it was as ambiguous as he suggests. Of course the tragic consequences of war, beyond any possibility of counting in terms of cost in money, must be added. So we are quite determined to keep up our defence and to play our full part in deterrence.
Lord Robbins: My Lords, would the noble Viscount agree that the answer to Lord Shinwell's Question, as reformulated, would be over 50 per cent.?
Viscount Trenchard: My Lords, I think that any calculation is extremely difficult. One just does not know what sort of war one would be facing, but I have given figures which indicate that the cost of war in terms of money must be at least 10 times the cost of our 5 per cent. of GDP spent on defence at the moment.

Social Security (Contributions) (Mariners) Amendment Regulations 1982
3 p.m.
Lord Elton Lord Elton rose to move, That the draft regulations laid before the House on 25th January be approved.
The noble Lord said: My Lords, under the Social Security Act 1975, mariners on board merchant ships are in general liable for national insurance contributions in the same way as other employed persons. Because they serve at sea, sometimes on long voyages which begin and end in different tax years, the Act gives the Secretary of State power to make regulations modifying certain of its provisions in their application to mariners, including those relating to contributions. Such regulations are subject to a draft having been approved by a resolution of each House.
As your Lordships know, national insurance contributions are usually collected with income tax under the PAYE arrangements. However, since the inception of PAYE, certain mariners have had their tax collected under a special system known as the Marine Tax Deduction Scheme. The mariners concerned are those who are paid their earnings as a lump sum at the end of a voyage, or series of voyages, instead of at regular weekly or monthly intervals like other employed earners. The special scheme has naturally also been used to collect their contributions. However, because it is disproportionately expensive to administer, and the numbers paying tax under it have sharply declined, the Inland Revenue have revoked the regulations providing for it with effect from 6th April 1982 and brought all mariners within the scope of PAYE. In consequence, the parallel regulations covering contributions fall also to be revoked and new statutory provisions are needed.
The draft regulations before the House apportion the earnings included in the lump sum paid at the voyage end to an "earnings period" within the voyage. Where a new tax year starts during a voyage or there is a relevant change in the mariner's circumstances—that is to say, one which affects his level of contribution, for example, if he achieved his 65th birthday while still at sea—the draft regulations create a fresh earnings period. The draft regulations continue the broad effect of the existing regulations subject to certain modifications. The main difference is that earnings will in future be apportioned to earnings periods according to the amount earned in each, and not on an average basis, as at present. This will fit in with the new tax arrangements. At present, employers who operate the Marine Tax Deduction Scheme make a return at the end of each voyage period. A further effect of the regulations is that in future they will make a return at the end of each tax year only, like any other employer, except that if a voyage begins and ends in different tax years, a separate return at the end of the voyage period will be required.
The draft regulations have been considered by the Social Security Advisory Committee and their report indicating general approval to the provisions was laid before Parliament with the draft regulations. My right honourable friend the Secretary of State for Social Services also laid, with the draft regulations, a statement in accordance with Section 10(4) of the Social Security Act 1980. Your Lordships will see from the statement that the one recommendation of the committee—about the insertion of a specific provision on leave pay—has been put into effect.
This is a quite technical piece of legislation. Rather
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than deploy the whole of its technicality to your Lordships, I thought the House would like to have the generalities, and if there are particular points to be taken up, I will do the best I can to elucidate them in reply to what noble Lords have said. To do otherwise would take me at least 25 minutes. My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 25th January be approved.—(Lord Elton.)
Baroness Llewelyn-Davies of Hastoe: My Lords, while thanking the noble Lord very much for that explanation of what is a highly technical matter, may I ask him a few simple questions. First, how many mariners are likely to be affected by this? Secondly —this is important—does this affect the interests of men who are employed in foreign ships or ships with flags of convenience? Thirdly, has the National Union of Seamen been fully consulted about it? If the Minister needs time to consider the matter, I shall perfectly understand the position.
Lord Banks: My Lords, I join in thanking the noble Lord for his explanation of the order. He has made clear that these regulations governing the collection of national insurance contributions from mariners are made necessary by the change in the method of collecting income tax; the abandonment of the Marine Tax Deduction Scheme and its replacement by normal PAYE. As the noble Lord said, the order is technical and non-controversial. I join the noble Baroness in asking how many are likely to be covered by the regulations. I gather that the numbers covered by the Marine Tax Deduction Scheme have sharply declined recently. The Government appear to have dealt satisfactorily with the points raised by the Social Security Advisory Committee, including the question of the treatment of leave pay, and we on these Benches support the approval of the order.
Lord Kilmarnock: My Lords, I too thank the Minister for explaining the draft regulations, but may I ask him to clarify paragraph (6) (a) and (b) in which I think I detect that if a voyage straddles two tax periods and the end of one tax period is less than a week (say, four days) and the beginning of the next tax period is also less than a week (say, four days also) the mariner in question would, if the contributions are always rounded up to the week, be paying something like an additional week's contribution.
Lord Elton: My Lords, I thank noble Lords for the reception they have given to the order. I understand the number of seamen involved is thought not to be more than 15,000. The National Union of Seamen were taken into consultation. As for the question of flags of convenience, I shall have to write to the noble Baroness; as indeed I shall have to write to the noble Lord, Lord Kilmarnock, on his point. I hope the House will be satisfied with those explanations and approve the order.
On Question, Motion agreed to.

Local Government (Miscellaneous Provisions) Bill
3.7 p.m.
Lord Belstead: My Lords, I beg to move that this Bill be now read a second time. First, I must apologise to the House in that the print of the Bill has been available only since Thursday of last week. It is a detailed Bill and I realise that the short time available to study it has been inconvenient. The Government have also had to work overtime to update the briefing on the Bill as it now appears in your Lordships' House. However, if the Bill receives a Second Reading today, I shall certainly undertake to make notes on the clauses of the Bill available within a few days to those of your Lordships who would wish to have them.
The main purpose of the Bill is to enact in public legislation those provisions in post-1974 local Acts or Bills which have proved most popular, useful and generally acceptable. Since local government was re-organised as a result of the Local Government Act 1972, all the metropolitan authorities and a number of county councils have successfully undertaken the mammoth task of reviewing all the inherited local legislation applying to different parts of their areas and re-enacting those provisions which seemed worth retaining for the future, adding of course any necessary new powers. A number of other authorities have not yet re-enacted their local legislation. Those planning to do so still have until 1986, when all the remaining pre-1974 local legislation will fall. Some authorities are, I believe, hoping that, as a consequence of this Bill and its predecessor, the 1976 Act, they will not need to promote any local legislation at all; certainly those that still have to legislate will find themselves promoting shorter and less expensive Bills. Also, this Bill, by making large amounts of local legislation unnecessary, will remove a good deal of work from both Houses of Parliament.
The local authorities have played a major role in shaping the Bill through discussions which began even before the 1976 Act was passed. It would be going too far, I think, to say that the local authority associations are completely satisfied with the Bill as it stands. Many of your Lordships who will be speaking in today's debate have first-hand knowledge of local authority matters and will be giving your views, but I know that authorities should like to see one or two more provisions in the Bill. While both my noble friend Lord Bellwin and I will continue to maintain as co-operative an attitude towards any new proposals as the Government did in another place, I do not think that there can be many more provisions which meet the criteria set out when the Bill was first introduced. The criteria were that provisions should be well-precedented in recent local legislation, and should be necessary and uncontroversial. If individual local authorities want powers which are novel or necessary for their particular area, they need to come individually to Parliament to ask for those powers.
Where a provision has proved unexpectedly controversial, as, for instance, Clauses 4 to 6, which deal with closing hours for take-away food shops, we have worked out amendments which, I hope, will satisfy all parties.
Similarly, the question of the licensing of pop
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festivals was raised in another place. We are certainly listening to the views of the local authorities on this matter, and my noble friend and I will listen with care to the views expressed today by your Lordships. Where amendments which meet our criteria have been introduced we have had no hesitation in accepting them. Clause 31 (the control of fly-posting) is one example.
We have also introduced into the Bill Clause 2 and Schedule 3, which I admit do not entirely follow the criteria for its provisions. However, there has been complete agreement between the local authority associations and the Government about the need for a proper measure of control over what are known as sex shops, and indeed there are a number of authorities which have already completed their post-1974 legislation, which would have sought some form of control had the problem which they now see existed when they were promoting their Private Bills.
I should now like to look at the contents of the Bill. Clause I and Schedule 1 contain a code for the licensing by district councils of public entertainments which involve music and dancing or boxing, wrestling, judo or karate, and which take place indoors. The code is one of the few mandatory provisions of the Bill. This is because we believe it to be essential in the interests of public safety, which is the main aim of the licensing scheme, to have uniform controls on a national basis. We believe that licensing should be in the hands of the district councils, which in all the circumstances we consider are the most appropriate authorities to look after the whole range of matters which must be taken into account when issuing licences.
As to Clause 2 and Schedule 3, your Lordships will know of the great concern about the spread of sex shops and about the lack of any powers on the part of the local authorities to control the number and location of these premises. This concern led the Association of Metropolitan Authorities, many individual local authorities, and Members of both Houses of Parliament to urge the Government to extend nationally the licensing controls proposed in the Greater London Council (General Powers) (No. 2) Bill, proposals for which the Government had already expressed their support in principle.
The provisions now added to the Bill differ from the GLC's proposals in only a few points of substance. They will enable district councils and London boroughs to introduce by a resolution of the council the licensing arrangements which are set out in Schedule 3. The premises subject to control are sex shops and sex cinemas, but the Government have said that they wish to reconsider the inclusion of cinemas in the light of the Cinematograph Bill introduced by my honourable friend the Member for Fareham (Mr. Lloyd), which received its Second Reading in another place last Friday.
The licensing scheme empowers local authorities to determine the number and location of these places in their areas, and the grounds for refusal are widely drawn. For example, an application could be rejected if the local authority considered that it would be inappropriate to grant it, having regard to the character of the locality, or to the use to which other premises in the vicinity are put, or if the authority considered that the number of such establishments would be

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excessive in the light of what it thinks appropriate for the locality, and in considering that point the local authority must have regard to objections.
When these provisions were considered in another place there was, I think it fair to say, a considerable measure of support that these premises should be brought under control. The concern that was expressed focussed on three main matters: first, the extent to which a local authority's decision on the number of shops it thinks appropriate for an area might be undermined on appeal; secondly, the extent to which it was right to refer to certain activities on the face of the Bill; and, thirdly, whether the proposals ought to enable local authorities to ban these places altogether.
As to appeals, I gladly repeat what my right honourable friend the Minister of State said in another place; namely, that we have undertaken to consider the point. If necessary, we shall endeavour to bring forward amendments on the matter at a later stage. On the second point, I entirely understand the concern that has been expressed that licensing arrangements might appear to condone the activities of these establishments. Therefore, let me emphasise that Schedule 3 does not make lawful anything that is at present unlawful. Paragraph 25 of the schedule says so in plain terms, and we intend to ask your Lordships' House to give approval to moving the paragraph to the head of the schedule, to bring the point home even more forcefully. If granted, a licence would signify no more than that the local authority had approved the general use of the premises under the control of Schedule 3.
But we are considering whether we can go some way to meet the particular anxiety expressed in another place about appearing to condone the sale of items which encourage sexual violence and cruelty. I think the crucial point is that the definitions in the schedule must be wide if we are to ensure that premises do not escape the licensing controls. Therefore, I cannot guarantee that these words can be removed completely from the schedule. However, we shall see whether we can achieve our objectives by the use of a formula which is less open to understandable objection.
On the third point, about the ability to ban, I have no doubt that many of your Lordships should like to be rid of these establishments entirely. However, I think that that would have to be done in terms of the general law relating to obscenity and allied matters. In this Bill we are seeking to provide local authorities with a very substantial measure of control over these premises. We have proposed in particular that local authorities should have a control over numbers. Provided that a local authority directs its mind to a particular application, and the circumstances of the area to which the application relates, under these proposals there is no reason why the authority should not be able to conclude, if it thought it appropriate, that the area ought not to have any sex shops at all. Clause 3 and Schedule 4 introduce the third licensing system contained in the Bill—this time for street trading. It is adoptive, and provides a flexible system whereby different degrees of control can be exercised over fixed and mobile trading.
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Part IV of the Bill—that is, Clauses 4 to 7—seeks to give district councils powers to restrict the nuisance which can be caused by the late-night opening of take-away food shops. In the light of the criticisms expressed in Committee in another place, and following consultations, the Government tabled substantial amendments to Clause 4 and 5 which were accepted on Report in another place.
Clause 4 gives a district council power to make a closing order requiring a take-away food shop, which is open between the hours of midnight and 5 o'clock in the morning, to close for all or some of that period, but only if the council is satisfied that this is desirable in order to prevent unreasonable disturbance to residents in the neighbourhood. I would emphasise that the council may invoke this power only if residents in the neighbourhood of the premises concerned have actually complained about being unreasonably disturbed. To safeguard the interests of the operators of these premises the keeper will have a right to make representations to the council before an order is made, and if the order is made he may appeal against the decision to the magistrates' court, and then to the Crown Court. Once an order has been made he may at any time apply to the district council for the order to be revoked or varied.
My Lords, the Government recognise that take-away food shops provide a much needed service to the community, and it is not our intention that they should be subjected to any unnecessary or unreasonable interference in giving this service. But during the past few years the Home Office has received many complaints from Members of both Houses, from local authorities and from members of the public about the absence under existing legislation of adequate powers to control noise and other environmental nuisances caused by late-night opening. During this period three major local authorities—the Greater London Council, Greater Manchester and East Sussex—have successfully promoted Private Bills to control these shops by a system of registration, and a number of local authorities have intimated their intention of seeking similar powers.
In this Bill the proposals are less restrictive than those in the private legislation which I have mentioned. These proposals do not seek to apply a licensing or registration system of control, and, as I have said, the district council's power to make a closing order may be exercised only if there is actual evidence of "unreasonable disturbance"; and in exercising this power the councils will be subject to the oversight of the courts.
The main change made to this part of the Bill in another place was to put back the earliest hour for a closing order from 11 o'clock to midnight. The National Federation of Fish Fryers, which represents the operators of 4,000 fish and chip shops, have said that they are now content with our proposals and, with the additional safeguards which have been inserted, they consider that the provisions represent a reasonable balance between the interests of the operators and their customers, and those of people who live in the vicinity of these shops. The Take-Away and Fast Food Federation, on the other hand, have lobbied strongly for the hour to be put back even further.
My Lords, this is a matter of judgment, and the Government feel that there should be discretion for

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the district councils to decide at which hour, from midnight onwards, it would be appropriate to impose a closing order. Bearing in mind that the making of an order can be triggered-off only by complaints being made, I hope the House will agree that our proposals have got the balance about right.
I am glad to say that there has been general agreement that the remainder of the Bill contains necessary and useful provisions; and, if I may, I will only list the sections into which it is divided and just describe those clauses which were added on Report in another place. Part V of the Bill contains two fire precautions measures; Part VI repeals the Theatrical Employers Registration Acts; and Part VII contains general provisions relating to the prosecution of offences against by-laws. Parts VIII and IX contain adoptive codes for the registration, first, of acupuncturists, ear-piercers, electrolysists and tattooists; and, secondly, of traders selling food from stalls and containers.
Part X contains three measures relating to the control of highways, including a new clause, Clause 21, which is designed to release the police from the need to obtain the written consent of the Attorney General before prosecuting for offences relating to works in the street. This, we think, will improve the enforcement of the law on the siting of roadworks. Part XI contains a number of public health measures and one new clause. This is Clause 24, which relates to the approval of plans deposited in accordance with building regulations and enables approval to be provisional or by stages of plans which would otherwise have to be rejected or accepted outright.
There has been pressure for this more flexible procedure, not only from the local authorities but also from the building industry. It is a practical measure which we think will save time and trouble on both sides, and it replaces unsatisfactory provisions in the Health and Safety at Work Act 1974. The final new clause comes in the miscellaneous part of the Bill, Part XII. It is Clause 31. I have mentioned it already, and it deals with fly-posting.
My Lords, those are the main provisions of this Bill. I hope your Lordships will take the view that it is in the interests of local authorities, Parliament and the general public that these provisions should be enacted as speedily as possible. I beg to move that this Bill be now read a second time.
Moved, That the Bill be read a second time.—(Lord Belstead.)
3.27 p.m.
Baroness Birk: My Lords, perhaps I may first thank the Minister for the way in which he has explained so clearly the purposes and provisions of the Bill, and also for his promise to put the Notes on Clauses in the Printed Paper Office; we appreciate that. This is a bitty Bill, and I am afraid it has to be dealt with in a rather bitty way. We on this side of the House wholeheartedly endorse the objectives of reducing the pressure of legislation on Parliament and saving local authorities the trouble and expense of promoting their own local Acts. Many of the provisions in the Bill are to extend valuable powers throughout England and Wales, and these are to be recommended.
Therefore, it is a pity that the Government are simultaneously weakening local government and local
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democracy through their fierce financial control, and last week we saw in response to the Burns Report the product of a halfpenny rate proposed by the Government to assist local industry, which will, I am afraid, effectively reduce the opportunities for local industrial promotion. But, be that as it may, in welcoming the Bill in principle I am sure noble Lords are aware that valuable local Acts have very recently been obtained by some local authorities, including all the metropolitan counties. They have been obtained by dint of much trouble and expense. But it is unavoidable for metropolitan authorities because their existing local legislation has been repealed by the 1972 Local Government Act. It would therefore be unfortunate if the Bill, so worthwhile in other respects, were to enact provisions more restrictive than those to be found in recent local Acts. As the Minister pointed out, some of the local authority associations are still unhappy about some of the provisions or omissions, but these, I think, are things that can be dealt with at Committee stage.
This Bill, as its Title proclaims, is a miscellany. I shall not attempt to explore in detail each of the many and varied provisions which it contains, and, again, we shall wish to reserve detailed comment until Committee stage; but there are many parts of this Bill which we welcome most happily. For instance, controls over street trading and controls over refreshment premises and over the take-away shops are some examples. But there are some problems and some omissions to which I should like to refer. Part I deals with the licensing of public entertainment and it imposes a mandatory system applying throughout England and Wales, except for London. The Minister said that he thought that there should be uniform control on a national basis. But I would raise the question here that the introduction of a mandatory power is surprising as, in recent local Acts, district councils have been given the right to choose whether or not to adopt local licensing powers or leave them to the magistrates. This is the case in Acts covering Greater Manchester, Merseyside, the West Midlands, and West Yorkshire, and all of these have been enacted within the last couple of years. Some districts have expressed great concern about taking on these powers because resources are needed to exercise them.
The Association of Metropolitan Authorities has received a number of representations from authorities on this point. Oldham pointed out that there were 200 premises licensed for music and dancing in its area and that extra staff would be needed to carry out the necessary administrative procedures and additional resources for the inspection of premises and enforcement.
In London and the Home Counties (where I am a magistrate), the licensing magistrates deal with the liquor licensing and the local authorities deal with music and dancing. That works well. The complete power of licensing magistrates in other parts of the country also appears to be working well. There are different conditions from place to place and in some areas a local authority would be in a position of licensing itself, for the use of its own premises—which I think should be avoided if possible.
I suggest that, for the time being, why not leave things as they are, if they are working properly? I do not expect an immediate answer; but it is something

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that the Government should take into consideration. Do not disturb what is working well! I should like the Minister to tell me in reply what consultations have been carried out with the Magistrates' Association and the Justices' Clerks' Society who, I think, feel strongly about this.
Secondly, on the entertainment side, the Bill as drafted will not give local authorities control over open-air entertainment such as pop concerts. The effect will be to remove such powers in many metropolitan areas and it will mean that, in heavily built-up areas such as Sheffield, Manchester, Leeds and Birmingham, the local authority will lose its power to refuse or impose conditions on outdoor events. This may subject residents to unreasonable noise and disturbance and also the organisers may make no attempt to provide adequate hygiene, sanitary and first aid facilities. Such controls already exist in London, and they will not be affected by the Bill. Although there are very good reasons why many outdoor events should be allowed without any control at all—and I am thinking of church fetes, political meetings, scouts and children's events, and so on—there is concern about pop festivals. It would be a pity if—and it could work this way—because the local authority was not involved, people on whose land they were asking to hold such events were inclined to turn them down because the authority had no control. Alternatively, where pop festivals are held, any of us with experience must realise the importance of laying down conditions so that they are run properly, not only for the people around but for the participants in the pop festival.
Would it not be sensible for a local authority to have prior notification and be able to lay down some guidelines? I would be against any measure which might make it impossible for young people to have pop festivals, but I think there is a half-way house which might be possible.
The Bill's public licensing entertainment provisions would seem an ideal opportunity to implement some long-overdue recommendations of the Royal Commission on Gambling which reported in July 1978. The local authority powers to impose conditions on the grant of permits for amusement centres or arcades could be, and should be, strengthened along the lines recommended by the Royal Commission. Also, since then, we have had the eruption of the "space machine", and powers of control over amusements machines without prizes such as "Space Invaders" are greatly needed. There has been a massive growth in this type of entertainment over the last couple of years. More and more children spend more and more time and money on them, and it would be a pity to miss the opportunity to legislate, if it can be slotted into this Bill.
My Lords, the most controversial and headline-snatching provisions of the Bill are those in Part II relating to sex shops and cinemas. The purpose outlined in Schedule 3 is not to alter definitions of obscenity or change the law. A new obscenity law with greater relevance to the contemporary social scene is badly needed. That is something that all Governments find it hard to come to terms with, but it is not a matter for this Bill. This is concerned with the rapid proliferation of sex shops and sex cinemas,
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which have now spread from London to the suburbs and to other parts of the country. The majority of people who do not use them resent them when they exist in large numbers in their own neighbourhood, and some people resent them altogether. However, there is a demand for their wares and, so long as they do not break the law, there is nothing illegal about them—although many may find them distasteful, which is a different point.
What is at issue is whether shops which specialise in the sale of sex material should be controlled. What are the alternatives? They could be banned altogether, but, as the Minister said, not under this legislation. Anyway, I would personally consider that that would be wrong and interfering with individual freedom. They can be left to multiply freely; but the increase in the last few years and the expressions of opinion in another place and by its Members' constituents show that this is causing a great deal of unrest. They can be controlled: using the planning mechanism is one method which many people favour. This would mean changing the planning law and, although that would have some advantages, it would be cumbersome and I am doubtful that that avenue is the right method to deal with this problem.
The provisions in Schedule 3 were originally promoted by the AMA and they were introduced by the Government in another place at Report. The Government are seeking control by licensing. The Williams Committee reported in 1979 and said:
"We see no reason to dignify pornography with the trappings of a licensing system".
That is more or less what the Minister was talking about earlier. This aura of giving the equivalent of a "Good Housekeeping Seal of Approval" or a municipal version of a Royal Warrant bothered MPs and no doubt would bother a number of noble Lords. I do not think that bringing up paragraph 25 of the schedule to the top, will make a great deal of difference to the impact. It may be more logical in the drafting of the schedule, but I do not think it will have the effect that the noble Lord seems to think.
Personally, I would prefer the word permit "to license". I think it has a less encouraging sound to it. I would ask the Minister whether he would consider this small change. Displaying "Licensed by the Westminster City Council" (or whatever it is) across the top of a sex shop gives it a little panache; but to have "permitted by" would be rather different in effect.
We must consider too, the social and ethical implications of the Act, and how what is in Schedule 3 will strike people when they read it—not necessarily in the Act but as it will be reported and quoted. I do not think there is any doubt that people find parts of the schedule offensive, although the intention was not to make them offensive. I was delighted to hear the Minister say that the Government will have another look. May I press him a little towards that course and towards some change there? The particular reference is to paragraph 3 (1) (b) (ii), which speaks of:
"acts of force, restraint, violence or cruelty which are associated with sexual activity."
It may be that the Home Office lawyers feel that there is a need to define it in this way. People will consider,

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rightly or wrongly, that it gives a sanction for these activities, and they perhaps will see it as straight lawyers drafting bent legislation.
This is not giving or taking away the sale of the "goods" or the "bads", whichever way you look at it. I would argue that it is in fact unnecessary, redundant and confusing, quite apart from any of the subjective feelings one may have about the wording. The objective of this clause of this Bill—and it is a local government Bill—is to control the numbers and location. The Bill should restrict itself to this objective. Spelling out the definition is, I would say, quite unnecessary. If that sub-paragraph ended:
"other things intended for use in connection with or for the purpose of stimulating or encouraging sexual activity",
that would still cover heading (ii), and one would be able to do without that definition. It would also ease a great deal of the uneasy feelings and dislike of that particular provision.
There are other reasons as well, because, if you draw up an exclusive list like this, there is always the danger that something will be left out or that later on people will want to include something. Anything in the second heading would, I really believe—and so do a great many other people, including lawyers—be caught by the first heading. It is also important to simplify legislation as much as possible. This I believe complicates it quite unnecessarily, apart from all the other reasons against it.
If the Minister is going to say: "Ah, but how difficult it is going to be because it will have to be left to the courts to interpret", the magistrates are perfectly able and competent to come to a decision on this. They are used to looking at "hard porn" in a judicial capacity and making a decision on it. When the Indecent Displays Act was going through another place, they found that they could not define the word "indecent", however many tries they had. At the end of the day, Ministers said that the courts would know and the courts would give their own interpretation. I very much hope that we are going to see some movement on this point, because it is a very great pity that this should have been brought in in this way. As it was probably all done rather hurriedly, maybe the Government will feel themselves in a position to rethink it quite considerably.
This also ties up with why it would be unnecessary to spell things out in this way, because how are these shops going to be checked and monitored? It will require staff and money. I know that, as to finance, the Explanatory Memorandum says that any administration work should be paid for by the licence fees extracted from people who are given licences for the sex shops. But, if this is so, I should like to know what fees are envisaged. If they are going to be of such a monumental size, that may be all right for the large chain stores and shops, but there are presumably some individual small shops, and if one is licensing shops and they are accepted as legal, then in this as in any other area it would be very unfair if one pushed out a small trader.
I should like an answer to the question: Where will the money and the personnel needed come from? If the Government have those resources to give to local government, then I would prefer to see them used for schools, social services, housing and other things
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which are very urgently required. If, when all this is spelt out, there is no way of implementing it because of a shortage of resources, then the law would yet again turn out to be an ass. I should like the Minister to take this back and look at it.
I am confident that many noble Lords feel as I do about this matter, and, with the wealth of legal and other experience in this House, we should be able to send back to another place a schedule the wording of which is effective without having attached to it an offensive and quite unnecessary shopping list.
As the Minister has referred to the Private Member's Bill on sex cinemas, I will not go into that now, except to ask him: is it intended that this Bill, which is now receiving Government support, will supersede the paragraph in the schedule on sex cinemas? How is it going to work? Will the Acts come into operation at the same time if they are going to be separate Acts? How in fact are the two going to work together?
If I may now turn briefly to the more prosaic "nitty-gritty" of the Bill, I want to ask the Minister why, in the clause dealing with acupunture, tatooing, ear-piercing and so on, provision of ultra violet tanning centres for public use has been left out of this good company. There are a great many fears by doctors of what is happening where unskilled people are sometimes dealing with this activity. These sun tanning centres are increasing quite considerably in number. Women and men go along to these places to get a tan either before they go on holiday or instead of going on holiday. It is something which I should have thought could be fitted into this part of the Bill.
On Part XI, I am sure that Clause 27, reforming the control of demolition procedures, and Clause 28, dealing with the protection of damaged buildings, are acceptable in principle. Ancillary provisions are needed for the protection of adjoining buildings and leaving the site safe. Listed buildings are once again left out. In my experience as a Minister I was always being told, "This is not the place for it", whatever the Bill was. But the problem concerned with the demolition of listed buildings is very important, because what is happening is either they go or the papers about them end up on the Secretary of State's desk. Clause 28 is welcome so far as it goes, but I would ask the Minister to explain why local authorities should not be able to recover their costs of undertaking works to prevent unauthorised entry or to prevent the building becoming a danger to public health where a closing order has been made. That would be more logical and fairer to the local authority.
There is a housing matter which is not dealt with at all in the Bill. I hope that the House will agree that it should be. I refer to the reconnection of electricity, gas or water where an owner of a house or a previous owner has failed to pay the bills. The tenants can be left without heat, light or water. This is obviously intolerable. It is a serious problem in inner London where there is still a large concentration of privately rented property in multiple occupation. Local authorities can come to terms with the statutory undertakers for reconnection. But why should local authorities be involved in the responsibility for payment and collection of arrears on defaulting owners' outstanding bills, many of whom have received the money from tenants together with their rent, and some have "done a bunk"

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or just refused to pay the bills? The situation is very unfair on the tenants and also on the local authorities.
I was delighted by the provisions concerning fly-posting in Clause 31; they represent something that many of us have wanted for a very long time. In general, the effectiveness of many of these provisions will depend on the sanctions which ultimately back them. It is an unfortunate sign in these inflationary times, and I must ask the noble Lord what provision exists for the updating and inflation-proofing of fines for various offences of default. For example, in Clause 26 there is laid down a maximum fine of £250. With inflation as it is, and increasing, this will be quite a small amount.
I have sounded a few notes of caution and criticism but I have not entered into comprehensive detail because Committee is the place for that. We shall be tabling some amendments designed to enhance the provisions of the Bill during the Committee stage, and I am sure we shall join with other noble Lords in suggesting alterations to the "sex schedule"—unless the Government come in first, as I hope they will, and do that themselves.
3.52 p.m.
Lord Evans of Claughton: My Lords, from these Benches we welcome the Bill in broad terms as a follow-up to the 1976 Act of the same name, and no doubt the predecessor of further miscellaneous provisions Acts. Most of the clauses are precedented by local legislation. It is largely an uncontroversial measure, with the exception perhaps of Part II, dealing with sex shops and cinemas, and Part IV, which deals with the control of refreshment premises.
Broadly, I think the Bill is to be welcomed because it will give local authorities an opportunity of cutting down on their own expenses, and will give Parliament less trouble and less expense in dealing with vast numbers of Private Bills. The main criticism of the Bill will be not so much what is included as what has been left out. I know that the Association of County Councils is concerned about providing a degree of extra control for fire authorities over decisions made on applications for building regulation consent and over the installation of auto-dialler fire alarms; the extension of existing powers over lost property in Clause 34 to aerodromes and aircraft, which for some reason from the Bill are specifically excluded, and the extension of the powers to control one-day sales.
I believe, too, as has been mentioned earlier by the noble Baroness, that open-air entertainments outside London should be required to be licensed in the same way as they are within Greater London. I should be glad to know why the Government do not seem to feel that the same kinds of regulation should apply to the provinces as apply to London, because the nuisance these kinds of entertainment can cause will be known to your Lordships, if not personally, from reading newspaper reports. I personally would support any amendment to bring outside entertainments into the same type of control.
The concern of the Association of Metropolitan Authorities, which I share and which has been mentioned by the noble Baroness, is that Clause 1 is mandatory, so that all district councils shall be required
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to license places of entertainment involving music, dancing, boxing, wrestling, or similar activities. I believe that, like the other clauses, it should be adoptive and I hope we shall have an opportunity of testing this at Committee stage. Local authorities are quite able and well qualified to make the decision as to whether such procedures should apply in their areas.
Again I return to a theme that I have mentioned so often in your Lordships' House: the more freedom we give to local authorities to make their own decisions the more healthy local government will be. I think that this clause also should have been adoptive, although I understand the points that the noble Lord the Minister has made. Nevertheless, this seems to be an unnecessary additional burden to throw on local authorities, which may not all need that kind of legislation. Indeed, I think that while such decisions need to be made they should be taken by the local magistrates. It is a quasi-judicial administrative kind of decision and I would have thought that the local magistrates were those best qualified to make that kind of decision and to deal with such matters, as they so often do in local licensing areas at present.
Part IV, as has been mentioned already, is another area of controversy, and the Government have already extended the period for making a closing order on refreshment premises from the original hour of 11 p.m. till midnight. Since the clause is permissive or adoptive, at this stage I believe that the time now suggested—midnight—is suitable. I believe the people best suited to judge the needs of their own area are the local authorities and local councillors. They are the people who know the kind of problem that may exist in any locality which has late night refreshment places. At this stage it is my view, although I am open to be persuaded otherwise at a later stage, that the local authorities should be able to make their own decisions about these matters. The clause, as amended, seems to me to be about right.
Finally, one cannot avoid the issue of the new Clause 2 introduced in another place, dealing with sex shops and sex cinemas. As the noble Lord the Minister has said, this part has to do with sex cinemas and will probably be dealt with by the Private Bill at present going through another place. Personally, I find the whole matter distasteful, but that is not a good ground on which to base one's attitude towards legislation of this type. If we based our legislation on what I, as a middle-aged solicitor, found distasteful or unpleasant, we could finish up with legislation which is puritan, restrictive and illiberal in terms of modern society. What might be unacceptable to me might be perfectly reasonable and acceptable to someone 20 years younger. What is unacceptable in the North might be acceptable in the South, or vice versa. Most of all perhaps, what is acceptable in the metropolis or in a big city might be totally unacceptable in a market town. So one could go on making comparisons between areas where this kind of activity might be acceptable and between parts of a town where it might be acceptable and other parts where it might be unacceptable.
During the Committee stage I should like to probe some of the definitions in this new clause and schedule, to many of which the noble Baroness has already drawn attention. I think local authorities should be

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able, if they wished, to make their own decisions about these matters for their own localities. Of course, speaking as someone who was a councillor for many years, this puts a heavy burden on a councillor up for election and faced with a vocal, active, and possibly minority lobby, seeking to prohibit this kind of use. Many of the sex shops, sex cinemas and so on, would not have attracted the opprobrium, the attention and indeed the custom they now enjoy had it not been for noisy and well-publicised picketing by opposing groups of citizens. There is in the area where I live a quite anonymous shop to which I have never really paid any attention. It has the words outside: "The Private Shop". But it started to be picketed by large numbers of irate citizens soon after it opened, which of course caused the whole of the populace in that part of the Wirral to take an interest in those premises. That is the problem which this kind of legislation will create, and I take the point made by the noble Baroness, Lady Birk, that the idea of a licence may give it a seal of approval and, if we are going on with this, we might try to seek some less supportive kind of way of describing the means by which these premises are made legal or prevented from being illegal.
As I said, there will be localities and conditions where local authorities will, quite rightly, find such premises totally unacceptable. There may well be others, in parts of towns not usually frequented by members of the public or not within a residential area, where it might be possible to have such premises without causing difficulty within a locality. But, at the end of the day, it is right that local authorities should make this kind of decision and that this kind of premises, however distasteful they may be to some of us, should not be banned out of hand. But this is a difficult and controversial area, and no doubt it will continue to be so in your Lordships' House, as it is in the country generally. However, speaking about the Bill in general, I think it should be welcomed. It does a very great number of very useful things which will be broadly welcomed and, from these Benches, I should like to give the Bill a warm welcome and hope that it can be approved, but amended in some ways at Committee stage.
4.1 p.m.
The Lord Bishop of London: My Lords, I think it will not surprise your Lordships if I say that in speaking to this Bill, which in general terms I welcome, I wish to refer specifically to Clause 2 and Schedule 3. This clause and schedule place many, and particularly those on these Benches, in a difficult position. On the one hand, if we support this clause there are those who—and, as I shall argue, not without reason—say that we are giving a public stamp of approval to sex establishments. On the other hand, if we oppose the clause, there are those who maintain that we are thereby acquiescing in the uncontrolled spread of such establishments.
As I shall be supporting control in a certain way and in certain circumstances, may I first make it clear beyond any shadow of doubt that I wholly deplore the existence of such places, mainly on the grounds that they convey and feed upon a debased and inhuman attitude to sex. They depersonalise it, isolating the physical satisfaction of the sexual instincts as an end
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in itself. They represent an attitude to women which I find deeply offensive, portraying them as little more than playthings for men. No Christian can, I believe, be opposed to sex as such. It is an integral part of the world which God has created and of which we are part. But for human beings it should be associated with the highest characteristics of man's nature and not with the lowest.
I am well aware that it is sometimes argued that a certain use of pornography may have a therapeutic effect in some cases of psychological disorder, but I believe it is a grave error to allow the kind of sex establishment with which this clause deals to shelter under a kind of therapeutic umbrella. The fact is that these establishments pander to the lowest instincts of man, and to give a degree of approval on the supposition that they will help is to fly in the face of what Christians call original sin.
It is often argued that people are good enough and discerning enough to reject evil and to embrace the good, but that is to flatter us all. One of the main purposes of legislation is to help us to be better and make it more difficult for us to be worse, and we all need its help. If I may—and perhaps this will give some comfort to certain Members of this House—quote the 39 Articles of Religion, even for practising and professing Christians,
"the infection doth remain in them that are regenerate",
and none of us is strong enough to be able to acquiesce in incentives designed to allow the infection to spread. We also have to take into account the fact that the purpose of the sex industry is profit, naked and unashamed. So I hope that in those few words I have made my own position regarding these establishments reasonably clear, before I go on to say something about their control.
I would first ask your Lordships to consider the shape of the Bill. Clause 1 provides a system of licensing for what is, intrinsically, harmless and potentially beneficial,
"… places used for public entertainments involving music, dancing, boxing, wrestling or similar activities outside Greater London".
Clause 3 likewise provides for licensing what is perfectly acceptable under proper control—street trading. Clause 4 deals with the control of refreshment premises —laudable places, albeit needing some control, which provide, in the words of the Psalmist:
"food out of the earth and wine that maketh glad the heart of man".
Clause 13 deals with tattooing and ear-piercing. I do not want to be tattooed myself, nor am I consumed with a desire to have my ears pierced, but I do not think there is anything morally wrong in desiring so to be adorned. This clause simply provides for registration, so that those who wish to avail themselves of these services shall do so at the hands of a reputable practitioner. So if you look at the Bill as a whole, you see that, with one notable exception, it provides the means of control for what, otherwise, are perfectly reputable and decent activities.
Clause 2 is just one clause among a whole list of them. It provides for the licensing of something which I believe to be morally wrong, and which a great many people believe to be thoroughly undesirable. In the context of the rest of the Bill, it is, I believe, inevitable

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that people will regard these establishments and the attitude to sex which they purvey as, somehow, thereby being made acceptable in our society. I am very grateful for what the noble Baroness, Lady Birk, said about the implications of the word "license", and I very much support what she said. But I would go further and say that, within the context of a Bill which is otherwise dealing with the control of what are perfectly decent and laudable activities, this clause will be given quite a different connotation from that which I believe the Government, certainly, and many other people wish it to have.
I was going to say something about the provisions of Schedule 3, paragraph 3(1)(b) referring to,
"acts of force, restraint, violence or cruelty which are associated with sexual activity",
which give me cause for concern. But I am grateful for what the noble Baroness has said, and I shall not develop that point further. However, I hope that the Minister will, as she hopes, take account of the possibility of the revision of that schedule.
It is vital to distinguish, on the one hand, between legislation which is designed to control what is morally neutral, to try to ensure that it is used for the good of society, or what is good but which can be corrupted, to try to ensure that the good is encouraged and the corruption minimised, and, on the other hand, legislation which fulfils the regrettable necessity to control what is intrinsically bad or undesirable. At this stage of the Bill, I do not want to go into any detail, but my general position is this. I accept that control of sex establishments is necessary, but I believe that it must be effected—and I believe that it can be effected—in such a way as to make it clear beyond doubt that it is control of what is an undesirable thing, not simply its approval under certain conditions. Clause 2 as it stands with its heading will certainly not do this but will have the reverse effect. I would prefer that the matter could be dealt with under planning. I find it very odd and unsatisfactory that a church can run into difficulties over planning consent when it wants to put up a notice board to announce the times of services but that apparently the planning laws cannot control the setting up of sex establishments.
If it has to be done in a Bill like this, then I believe something could be achieved by rephrasing headings. For example, to follow the noble Baroness, Lady Birk, instead of "Licensing", with its connotation of approval, why could it not read "Restrictions on sex establishments"? The fact that such a change were made would help to draw attention to the fundamentally different nature of what is being controlled. I hope that the heading of "Control" will not be used, as Part IV is headed "Control of refreshment premises". I no more want sex establishments to be put in the same category as refreshment premises than I want them to be put in the same category as places for music and dancing, as they are at present.
I believe that the question of whether we are controlling what is neutral or good, or controlling what is essentially undesirable, bears upon the question of the power of the local authority. In the first place, I think it is right for an authority to have to justify each case if it declines to give approval. That is in the case of something which is morally neutral or good.
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But the case of what is undesirable, I believe that it is wholly reasonable for a local authority, taking account of public opinion, to be able to say it just does not want that kind of thing to take place in its area and therefore to have the option of refusing each and every application if it wishes. For this reason I support the suggestion that one of the grounds for refusal of licence should be that a substantial number of citizens object. I welcome what the Minister said in this respect and I thank him for it.
I am well aware that in the debate in another place the question of the unsatisfactory state of the obscenity laws has been raised, but I do not believe that we can put off a decision about this matter until they are dealt with. I understand that the Government have no immediate proposals in this respect. To refuse to accept some restrictions now by the exclusion of Clause 2 would, I believe, inevitably be taken as acquiescence in the present state of proliferation. What I believe is essential is that control is effected, and is effected in such a way as to make it clear that it is control of an undesirable activity which is not conducive to the good of society. For this reason, while I do not oppose the provisions for restriction or control I would press for Clause 2 to be amended substantially to take account of the points which I have made.
4.14 p.m.
Baroness Stedman: My Lords, I, too, would like to give a general welcome to this Bill because it will take away from local authorities the need to spend money on raising their own Private Bills. May I take up two of the main points which were raised by the noble Baroness, Lady Birk. The first is the licensing of music and dancing. There seems to be a growing objection to the provision which will transfer the licensing of public music, singing and dancing to local authorities.
There have been very strong recommendations from the Justices' Clerks' Society that while the aim of public music and dancing legislation is essentially to maintain law and order, particularly with the late night discos that go on these days, law and order is primarily the concern of the magistrates and not of the district councils. Many, if not most, of the premises which are licensed for music and dancing also have a liquor licence. This licence is granted by the magistrates.
The problems of noise, of disorder, of the supply of liquor are interwoven, and under the proposed procedure both the applicant and any objector would have to make their case before two different tribunals, with the attendant delay and expense—to the local authorities for the music, singing and dancing licence and to the magistrates for the liquor licence. The function has been taken over by the local authorities in Manchester and Bradford and those local authorities have had to set up departments to issue the licences, whereas the justices' clerks normally run their music and dancing administration along with their liquor licensing administration. They will not be able to reduce their staff if this part of licensing is taken away from them. But I am told that in Bradford the music and dancing licensing was performed by one member of staff in the justices' clerks' department and that now the local authority employ four members of staff to do the same job. At the same time they take up a lot of

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the time of the justices' clerks' staff in dealing with queries about the liquor licensing position of holders, or prospective holders, of music and dancing licences.
The magistrates' courts sit on most days and they are therefore in a position to issue occasional licences—at short notice, if necessary. The local authorities cannot be in this position unless they delegate their power to their paid officials. That procedure surely cannot be as equitable as a hearing before the magistrates. Another aspect of the proposed licensing is that over recent years the local authorities have expanded their interests in the provision of leisure sports and cultural centres. Therefore they themselves are major holders of public and dancing licences. They will consequently be licensing their own premises. I do not think that that can be seen to be just.
There is also the question of appeal. There is a right of appeal now, I understand, against a magistrate's decision, but it does not appear to be suggested that there should be any appeal against a local authority decision if local authorities take on this work. I support the view that the licensing of premises which are used habitually for public music, singing and dancing ought to remain vested in the licensing committee of the magistrates' court. If that view is not acceptable to the noble Lord, may I ask him whether he would be prepared to consider that magistrates' courts should remain the licensing authority of premises which arc also licensed for the sale of intoxicating liquor? I support the noble Baroness in her plea to leave things as they are, but if that is not possible then I shall return to this point at the Committee stage of the Bill.
Also, on Schedule 1, there is the question of licensing entertainments which take place wholly or mainly in the open air. No doubt it is the pop festivals which come under this section. I should like to speak now as the chairman of the working group on pop festivals—one of the chores I was landed with in my days at the Department of the Environment. This group met for almost two years, first under the chairmanship of the noble Lord, Lord Melchett, who issued a report on the free festivals, and then under me. We reported on the problems in 1977.
We spent many hours and we heard a great deal of evidence on the possible approaches to the problem by changes in the law, by planning procedures and by licensing. We felt that a licensing system could be expected to make it an offence for anybody to be concerned in the organisation or management of, or knowingly to allow his property to be used for, an event which was unlicensed or which broke the terms of its licence. These provisions would assure compliance in most situations where the organisers would be identifiable and would be willing to co-operate. But our problem—and I guess the problem is still there today—is that the so-called free festivals took place often without the landowner's permission and with no identifiable organiser, or with organisers who changed from day to day so that one could never catch up with them. We eventually reached the conclusion that a national licensing system to cover free festivals would be costly and would be complicated to administer. It would often be difficult to enforce because there would be no individuals on whom to serve any notices, and it would be as likely to increase tension in some cases as it would to decrease tension in others. Most of the
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committee then believed that the balance of the argument lay against the introduction of a licensing system. Some of the committee members felt that, despite its shortcomings, a licensing system might be worth while.
What concerned us most was that if some local authorities were granted the power to license pop festivals then those same powers should be available to all, so as to avoid the situation in which festivals unwelcome in one area could simply move over the border into another area. I should like to know whether the noble Lord can give assurances now that this is the line the Government still take and that local authorities either all have the power or that none of them does, and that together with that power the Department of the Environment are still urging local authorities to make available sites for recreational activities which might be available for pop festivals as for other activities from time to time.
I shall be followed today in this long list of speakers by the noble Lord, Lord Sandford, and the noble Viscount, Lord Ridley, who are both presidents of their local authority associations. I will content myself with saying that the Association of County Councils have expressed their disappointment because over the past four years they have made many representations and suggestions to the Government on items for inclusion in the Bill—and the noble Lord, Lord Evans of Claughton, referred to some of these and no doubt the noble Viscount, Lord Ridley, will enlarge on them when he comes to speak. The Association of District Councils are also disappointed that enabling powers for local authorities to assist industry and commerce have not been included in this Bill. There is no doubt that district councils want to play a very constructive role, working with local industry and commerce. They want to encourage and support economic development in their areas. They had hoped that the Government would give them the powers and resources to respond more effectively to this problem. There is no guarantee that time will be found in the very near future for another Local Government (Miscellaneous Provisions) Bill, and therefore I hope that the Government will consider the pleas made by local authority associations and will feel able to widen the scope of this Bill before it leaves your Lordships' House.
4.23 p.m.
Lord Sandford: My Lords, I see that we shall have to be careful that the Social Democrats do not steal our clothes! Before elaborating on that I should like to join with others in thanking my noble friend, Lord Belstead, for his lucid introduction to the Bill and the Government for the things which they have included in the Bill. I am only sorry that I shall spend most of my speech criticising them for what they have left out.
The first two lines of the explanatory memorandum state:
"This Bill provides for matters which are commonly dealt with in local Bills promoted by local authorities.…"
Many of those local Bills have provided individual district councils with the powers they need to assist the economic development of their areas. That activity—the economic development of their areas—has been for at least the past two years the highest

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priority of the members of the Association of District Councils. I hope that all Members of your Lordships' House would agree with that choice of priority.
I am sure that Her Majesty's Government share the view that general public legislation in this field of economic development, or the powers of local authorities to assist in it, are gravely defective. It was because they shared this view that in the spring of 1980, nearly two years ago, they asked Sir Wilfred Burns to investigate the matter and to report. His committee was set up in May 1980 and with commendable briskness they reported in June. For some inexplicable reason that report was not published until April 1981. If the noble Lord who is to reply can give us any explanation of that delay, it would be interesting; I have a feeling that it has something to do with the machinery of government.
I recall that when I visited the City of Bristol in the early summer of 1981, I was told that they were then being advised to wait in the promotion of the local Bill which they had in mind, in which they sought powers in this field, because, following the publication of the Burns Report, public legislation was on the way. Indeed, in June 1981 my right honourable friend the Secretary of State for the Environment confirmed to the association that he saw the need for this public legislation.
So it is quite natural that there should be keen disappointment that this Bill, designed for this very purpose, has failed to cover the need for these powers. But hopes have recently been raised again by an answer given by my right honourable friend the Minister of State for the Department of the Environment, last Thursday, 11th February, in another place (col. 666, Official Report) in a Written Answer to a Question. That statement has something to commend it, so far as it goes, although it does not go far enough.
Our expectations are by no means fulfilled, and for two reasons. First, my right honourable friend did not make it clear, either one way or the other, whether the Government's intention as he expressed it then will actually be incorporated into this Bill. Secondly, because the intentions expressed by my right honourable friend in his Written Answer fall a long way short of what any member of a local authority feels is called for. The specific point is that the scale of assistance which local authorities can give in the general field of economic development is limited to the product of a ½p rate. My noble friend Lord Mottistone made the point last Wednesday, during our debate on rate reform, that members of the Confederation of British Industry, considering the burden of the rates upon them, felt that they do not get a fair return in the services provided for the rates levied on them.
The situation is well illustrated by the position which would be created if these powers were all that were to be made available to us. Take the district of North Devon. This is an assisted area with heavy unemployment. That district would be empowered to spend no more than £40,000 per annum—the product of a ½p rate. That same district is collecting from its industrial ratepayers only—not from the whole of its non-domestic rates but from industrial ratepayers only—no less than £728,000. So that is £40,000 in return for a rate burden on industry of £¾ million.
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Take the case of Corby, which is a special development area. That district would be empowered, under the proposals announced by my right honourable friend last Thursday, to spend a sum limited to £35,000. That is to assist an industry which is in a very poor way in Corby, and which has to face a rate burden of £3⅓ million. Let us take a Welsh district—that of Wrexham, which is another assisted area. Industry in that district is contributing £3,351,000 to the rates, but the authority would be limited to spending £52,000 on economic development in that area.
I reckon that anything that my noble friend said about the sense of injustice felt by the Confederation of British Industries is well demonstrated by those facts. My questions to my noble friend arising from all this, are as follows, and there are three. First, are Her Majesty's Government intending to provide what is wanted in this field, and what was described by my right honourable friend in another place last Thursday, in this Bill? Secondly, why do they need to have further consultations about the matter, as my right honourable friend indicated in another place last week, when they have already held those in connection with the Burns Report? Thirdly, would he consider for this Bill a version of the clause which the Association of District Council Councils drafted for Wilfred Burns, and which was incorporated as an annex of that report, setting out the need of the association in this respect, as a substitute for inclusion in this Bill, if the Government do not have any proposals of their own? So much for economic development.
I turn now, briefly, to Clause 2 and Schedule 3—sex shops and so on. This provision was only included in the Bill on 3rd February, and I have not yet had time to discuss it or consult with members of the association at first hand about it on any great scale, but I have already had some discussions. I think the first point to make is that all local authorities, if they are given controls and powers to exercise by Parliament, need those controls to be effective. It is probably true that there may be some among the 333 district councils who, as the noble Lord, Lord Evans, was saying, may be prepared, may even want, to permit the establishment of a sex shop in some area where it is likely to cause little offence. But my impression so far—and this, I admit, is based on a rather limited consultation— is that a great majority of district councils will want to exercise their control so as to eliminate this debased and debasing activity altogether. So I want to be quite clear about the point which my noble friend made at the outset of this debate. Is it a fact that a district council that takes this view will be able to exercise the controls Parliament is proposing to give it in the following way? When a proposal to establish a sex shop comes up, will they obtain from their electorate, if they can, and I think they will be able to do so, a view that their electors do not want that shop in that area, and then, on that basis, to resolve that the character of that particular area is such that one sex shop is too much? If they have to go through that rather labyrinthine process in every instance, so be it, but I want to be quite clear that that procedure is open to them. Otherwise, this control will be very unwelcome.
Lord Mottistone: My Lords, before my noble friend

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sits down, is he aware how very grateful the CBI will be, and indeed I am, for his amplification of the point I was making in last Wednesday's debate on rates, that business ratepayers on the whole are not getting what might be described as value for money? I am deeply grateful to my noble friend for making that point yet again.
4.33 p.m.
Lord Underhill: My Lords, first, I apologise to the noble Lord, Lord Bellwin, for the fact that, owing to a number of other engagements, I shall not be able to be present for his concluding speech. I echo other noble Lords who welcome this Bill as being helpful. But may I say that, when I first saw Clause 2 of Part II, relating to the licensing of sex establishments, my immediate reaction was that this would give a cloak of respectability to both sex cinemas and sex shops—a cloak of respectability to carry on the activities described in paragraphs 2 and 3 of Schedule 3? It seemed to give approval to a system of licensing which I thought would be highly undesirable. However, when I read carefully the various paragraphs of Schedule 3, I appreciated that that schedule does set out the possibility of considerable control, and, what is more, the laying down of conditions by the local authority, and these are set out in paragraph 12 of the schedule. Therefore, I have concluded that any provision that assists in control of these establishments or assists in laying down conditions as a piece of legislation is well worth while.
May I say that I differentiate between the proper establishments for dealing with birth control and family planning materials and this particular type of activity as described in Schedule 3? The exploitation of sex has been mentioned by other speakers. The large profits are the attraction in this sort of thing, as they are with drug peddling, and I put them both in the same category. Naturally, we shall need to look at the various details in Committee, but I think that I have made my position clear. It is really an extension of the legislation which was before your Lordships only last year in the Bill which was introduced in this House by the noble Lord, Lord Nugent, the Obscene Publications Act 1981.
But, even if I am in a minority—I hope not—I believe that this should not be permissive; I believe it should be mandatory on local authorities, bearing in mind that the terms of the schedule do give an authority freedom as to how it will carry out laying down certain conditions. Why also is Part VIII dealing with registration in connection with acupuncture, tattooing, ear-piercing, et cetera, also not mandatory? I had the good fortune to sit on a Select Committee on a local authority Bill which sought these powers. Your Lordships' approval was given for powers of this kind to be put in the Bill. I can recall all the evidence we received, including medical evidence. This is a provision which deals not purely with local circumstances; it deals with what is a health matter. Therefore, I can see no reason whatever why this should not be a national obligation and made mandatory.
I think there will be general agreement on the need for control of late night opening of take-away food shops. I think noble Lords will give general approval to the conditions in Part IV. If these shops are com-
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mitting a nuisance, action must be taken. I was pleased to hear the noble Lord, Lord Bellwin, emphasise that these are providing a very useful and much desired service. Businesses must not be destroyed by a minority of residents against the general wishes of the people in the area. Naturally, we must take account of the noise—cars revving up, banging of car doors—and in addition the litter that is left, not only in nearby areas, but by people on their way home from these take-away shops. I know the stuff that is occasionally tossed over my garden fence—Chinese take-away wrappings and also fish and chip wrappings. Have the Government considered in connection with take-away food shops—not just the late-night ones, but in general—whether something should be done to add to our control of litter? The 1958 Litter Act frankly seems to be useless. Only last Saturday, when I was shopping with my wife in what is a reasonable area, we found that a path which leads from the residential road to our main shopping area, a path bordered with grass and plants, was one mass of takeaway material. Now we have nice packaging, it is a great improvement from the old fish and chip papers that we used to enjoy many years ago, but more of it seems to be dropped. I am wondering whether the Government cannot do something to add to what I regard as the useless provisions of the 1958 Litter Act, even if it is only making compulsory the display of adequate posters and signs in these shops. This is a nuisance which affects not only the people who might be affected by noise: it is a nuisance which affects people some distance away from the shops.
I was pleased to see in Part V the provisions regarding fire precautions. Let me say briefly that, as one who served in the National Fire Service for five years, I am particularly pleased to see Clause 10, which provides for luminous signs for the easy identification of switches dealing with high voltage signs. I am pleased that those particular provisions are to be made mandatory.
Clause 32 provides for the notification of temporary markets—something which I think most noble Lords will approve. But it excludes any control whatever of one-day sales which are held in various parts of the country in various types of hall. I note that the county council associations are very keen that something should be done about this. Many of them are bona fide sales which serve a very useful purpose. But there is always the opportunity—in fact there have been experiences—of a shady individual selling shoddy goods. He has a one-day sale and then he is gone. Nobody knows where he has gone because there has been no registration at all. I hope that the Government themselves may consider introducing a clause or an additional subsection to this clause rather than leaving other nobly Lords to deal with it in Committee.
I was pleased to see the various provisions dealing with street trading and sales from stalls and containers. Those who enjoy watching football matches as I do, particularly on a week night—and I shall miss my favourite team playing in the Cup replay tonight: that is not where I am going—will be aware of the large numbers of containers for hot dogs being landed from a parent vehicle and the obvious need for careful control in the interests of hygiene and health. Having said that, I hope that the controls will not be enforced

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in such a way that they in any way tend to interfere with the legitimate sales from mobile fish and chip vans or other mobile shops, or with genuine street trading. A few miles from where I live is possibly one of the largest street trading areas in the ountry—High Street, Walthamstow. Street trading is generally part of the life of the town, and I hope that, although we must have these controls, they will do nothing to interfere with proper, genuine trading of that kind.
Finally I turn to Clause 31 which deals with the control of fly-posting. The noble Lord will correct me if I am wrong—and I shall find out from Hansard tomorrow whether I am correct—but I understand that the present legislation enables action to be taken in the form of a prosecution against either the publisher or the person who gains from fly-posting. I hope that the provision in Clause 31 will not be an alternative to action to be taken under the previous legislation. One other point arises—namely, that the local authority has power, if it so desires, to remove or to obliterate posters which are put up by fly-posting. This is a cost to the local authorities. Where the name and address of the individual is known, surely there ought to be inserted in the clause power for recovery, because local authorities should not be put to the expense of having to employ people—their own staff or others —to cover up what are regarded as illegal posters, and yet not be able to pass on the cost.
With those few points of general approval of the Bill, I point out that a lot of work will have to be done in Committee.
4.44 p.m.
Viscount Ridley: My Lords, first I should like to apologise to the House and to my noble friend Lord Belstead for being unavoidably absent at the beginning of the debate, but I look forward to reading what my noble friend said. My intervention on this Bill will be brief, but I hope helpful. It will have nothing to do with pop festivals or sex shops—my experience of either being somewhat limited. But in my research as regards what I might have to say this afternoon, I came across an Act, passed by Parliament in 1650, which is entitled:
"An Act for suppressing the detestable sins of incest, adultery and fornication".
Those sins, my Lords, were at that time to be punishable by instant death, whereas anybody convicted of,
"keeping a bawdy house shall on first offence be openly whipped, set in the pillory, marked with a hot iron on the forehead with the letter 'B', and committed to prison for three years without bail".
One hopes that that Act has by now been repealed by subsequent legislation, but it is nice to speculate what the authors of that piece of legislation would have thought about a modern sex shop had they seen one.
I am concerned with much more mundane matters in this Bill concerning the need to replace Section 262 of the Local Government Act 1972 with general powers for local authorities to deal with certain local problems. That section provides that all local Acts—and there have been a great many—expire at the end of 1984, although the date has now been extended to 1986. It had been hoped that this Bill would avoid the need for councils to promote legislation after that date, especially
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in non-controversial cases and where the powers which are to be sought are not contested but would, if continued, provide important safeguards.
I therefore ask that the Government will look favourably on amendments which we hope will come forward to include a great many powers for local authorities already possessed by some, if not by all, councils. The reason I ask for this is that in some respects this Bill is defective by what it does not include, as other noble Lords have said, and the more clauses that can now be agreed the better, and the less will be the need for Private Bills in the future. It is important that this should be done not only because of the immense pressure on parliamentary time, of which your Lordships will be very well aware, but also the cost. For example, the cost of three county council Bills which received Royal Assent at the end of last Session were as follows. The Kent Bill cost £200,000; the Derbyshire Bill cost more than £100,000 and as regards the East Sussex Bill the fee for the parliamentary agents alone was, I understand, over £60,000 and the total cost is likely to be well over £100,000. I understand that Berkshire feel that if this Bill is not amended they may need a Bill of their own which will cost quite as much as did some of the Bills which I have quoted.
After 1972 the Government exhorted local authorities to promote rationalisation Bills to replace the private Act powers which are due to disappear. It had been intended to provide a Bill which obviated the need for private powers. Local authorities understandably, in view of the costs involved, expected a general Bill which would cover all the various details generally needed and acceptable to Governments. There was a 1976 Act, as your Lordships are well aware, but that was not the final answer. It was hoped that the Bill now before us would provide all the answers; but if it does not—and it does look as if it is defective—then I hope very much that we may be allowed a third bite of the cherry before the legislation expires. I hope that when my noble friend Lord Bellwin replies, he will be able to tell us whether or not this is the final piece of legislation. I hope very much that it is not.
I would have given examples of the type of thing which county councils are talking about and hoping for, but the noble Lord, Lord Evans of Claughton, has already quoted from all my sources. May I, as a fellow sufferer, say in passing how nice it is to hear that he has recovered from the gout which he had last week. I shall not repeat what he has said. I do not believe that any of these matters are, or should be, controversial and all should be readily agreeable to the Government. They have, indeed, mostly been the subject of much discussion between local authority associations and Government officials, and in due course I hope that the House will agree to include some of them; but they are, of course, details which we shall come to in Committee. I say that because I am quite certain that it would save a great deal of time and public money if we are able to meet them. In general I give a warm welcome to the Bill.
4.49 p.m.
Lord Robertson of Oakridge: My Lords, I should like to offer some remarks on Clause 2 and Schedule 3. I appreciate the Government's response to the local

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authorities' request for powers to control the proliferation of sex shops by a system of licensing. But I would like to mention three reservations. The first concerns the question of local authorities having the power to limit sex shops. I would like to see that power extended to giving discretion to ban them altogether if they should think fit and if this reflects public opinion. Certainly I should not like to see local authorities having to get involved in expensive and time-consuming legislation to fend them off.
Secondly, as has been made very clear, we are concerned merely with a measure which gives local authorities a degree of control over the retail outlets for the trade in sex articles. In no way can the measure be treated as a means of reforming or improving the existing obscenity laws. Accordingly, any attempt to define what sex articles are acceptable and what are not acceptable is out of place and would almost certainly be counter-productive. It is for this reason that I believe it is wrong to have included in the definitions the words in paragraphs 2 and 3 used to describe sadistic material. I have given much thought to this point and, however I look at it, I cannot avoid the simple conclusion that it must be wrong to license sadistic material. Whatever riders are put in the measure and, indeed, whether paragraph 25 comes at the beginning or the end of the schedule—licensing sadistic material confers a degree of approval on it. I can understand the reasons for the inclusion in the definition of these words; namely, that our weak and unsatisfactory obscenity laws could give rise to a situation where it would be quite possible that these things might not otherwise be controlled.
This brings me to my third point which is the need to follow up these provisions with a general reform of the law on obscenity. I much admired the speech of the right reverend Prelate the Bishop of London and felt that there was one bright instance where we had the clear and authentic voice of the Church. In particular, I admired his assessment of much pornography as evil. I would add only one point. When I study some of the worst items of pornography—which I have just occasionally—I get a sense of welling up of the evil that is inside me—that it wants to come to the surface. I believe that this is what happens to many people and when it does come to the surface, real trouble materialises. Control of retail outlets will not deal with this problem. In order to deal with it, we need a reform of the obscenity laws, and action on this is essential. If we do not make efforts to deal with the evil that is in and around us, we shall stand condemned just as much as those who produce and distribute this literature.
In a curious way this was brought home to me at lunchtime when I listened to a talk on the character, Eli. Noble Lords will remember that he was Samuel's mentor. Noble Lords will also remember that he suffered and had to share the same judgment as his wicked sons because, although well-meaning, he did not take effective steps to stop their wickedness. What is needed, and needed urgently, is a clear, adequate and enforceable law to control all aspects of the pornography industry. As a basis, material should be prohibited that fulfils the following conditions: first, that which appeals to a prurient interest; secondly, that which lacks serious social merit; and, thirdly, that
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which is patently offensive in the treatment of sexual conduct.
Without such a law the measures now proposed even if amended and improved before they become law, will not fully achieve all that is needed. I appeal to the Government to follow up this measure with a reform of the law on obscenity.
4.54 p.m.
Lord Nugent of Guildford: My Lords, I am very pleased to follow the noble Lord, Lord Robertson of Oakridge, with his lucid and compelling speech on the subject of sex shops. I shall have a few words to say about that in a minute. First, I should like to congratulate the Government on introducing this useful miscellaneous measure which is, I believe, supposed to complete the 1976 Act and cover the position of local authorities when all local Acts finally expire. Of course, this is something much to be desired.
In recent years many noble Lords will have seen the spate of local government Bills—many of them jumbo Bills—coming before Select Committees, and will sympathise with the point made by my noble friend Lord Ridley, of the heavy cost to the local authorities and the ratepayers, as well as the heavy burden on the time of Parliament. So, if that can be obviated in this way, it is very much to be desired. I hope that this measure will meet most local needs, although it is already evident that it will not meet them all. We shall hear various noble Lords move amendments in Committee.
There are just three short points that I want to mention before dealing with the major subject of Part II of the Bill, sex shops. One of them was referred to by the noble Baroness, Lady Birk. It was the reluctance of local authorities to take on the duty of licensing for music and dancing. I understand that that reluctance is matched by the magistrates, who are reluctant to lose the function. So it will be interesting to hear from my noble friend on the Front Bench in due course how it is that neither is satisfied and why they propose to make a transfer.
Of the other two points I wish to mention, one concerns the street trading code. The Bill makes a provision for an appeal against a refusal of a licence to trade in a "licence street", but it makes no provision for an appeal against a refusal of a consent to trade in what is called a "consent street". This seems a technical omission and I hope that my noble friend will be ready to make an amendment at the Committee stage.
The third point is with regard to repeals. Many provisions in recent local Acts will be superceded by provisions in this Bill. But, apart from the repeals in Schedule 7, the Bill leaves other local Act provisions unrepealed. I wonder why, and whether this could be covered. Obviously it would go some way to meet the objections of my noble friends Lord Ridley and Lord Sandford.
I should now like to say a few words to noble Lords about the licensing of sex shops. I personally welcome this provision. As a Christian, I sympathise with the right reverend Prelate's wise and cogent words on the moral issue, but to me practical politics demand that I should recognise the reality, that there are now

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literally hundreds of these sex shops—hundreds in London and I daresay hundreds by now outside. Therefore, a measure of control is reality, and that is what this does. Good luck to the Government for having the courage to come forward to do it. It must be encouraging to them that in the Commons there was general approval of this measure, although there were a good many reservations on details.
Of course, the outcry against sex shops, particularly in the Provinces, has become so loud that I think it may even be heard in the Home Office now. No doubt that is why this measure has come forward. I am sure that this is right. I am relieved to see that the schedule provides that existing sex shops must apply for licences just the same as new applications and that they will have no pre-emptive right of getting one. To me this seems to be right.
In contradistinction to the right reverend Prelate, I think that control by licensing is technically correct. Planning control is concerned with a change of use of premises, whereas the establishment of a sex shop in existing shop premises only involves a change of goods sold, and not a change of use. Therefore, licensing by the decision of elected local councillors, who are the best judge of what is suitable in their localities, seems to me to be the right answer.
I have already referred to the general support in the Commons, but what will also have been noted by all noble Lords is that the Commons had little opportunity to debate this important measure. It was added as a new clause on Report stage and discussed late at night. Therefore, there really has been no opportunity for the Government's proposals to be amended in detail. Therefore, here in our House, as often happens, we have a special responsibility in the Committee stage to look at this in detail and ensure that this long and complicated Schedule 3 is as good as we can make it by the time we have finished with it.
There are three points I should like to mention now, one of which has already been referred to by many speakers; that is of course the definition of a sex shop and a sex article in paragraph 3 of Schedule 3. I shall not quote the particular sub-paragraph because it really is most objectionable. There is no doubt, as the noble Lord, Lord Robertson, said and the noble Baroness, Lady Birk, that it is astonishing to find in a Government Bill references to sadistic material, and that we are being asked to approve of a licensing scheme which will approve of these particular articles, pictures, and material.
I welcome Lord Belstead's undertaking to reconsider these definitions, but I noted, as I am sure did other noble Lords, that he was not particularly sanguine that he was going to find an improvement. What this implies—and I am sure all noble Lords will observe this—is that in existing sex shops this material is present. My noble friend may well take the same line as his right honourable friend the Minister of State did in the Commons, that these words are needed in order to cover everything stocked by the sex shops. Then my noble friend will have to explain to the House why prosecution is not taken under the 1959 Act, which clearly makes this material illegal. I agree with the noble Baroness that it is objectionable to ask the House, by implication, to approve of this and put it in
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a Bill.
Let me add to my noble friend that really putting paragraph 25 of the schedule at paragraph 1 is not going to give it any more force than it has now. Obviously the right solution, as other noble Lords have said, is a new Bill to strengthen the Obscene Publications Act 1959. My noble friends and I have been considering this difficult problem for some time and we have drafted something which I shall shortly, if I am allowed to, put before your Lordships. I hope that this may make a contribution in this immensely difficult field where we have to try to achieve some control in a field where opinions differ a good deal, where we can perhaps achieve something which would make illegal, get control, and perhaps reduce in volume (because, goodness knows! the volume at present is really appalling) what is called hard pornography. We must talk about that at some other time.
The other point I wish to refer to is the procedure for appeal on a refusal of licence. Where a local authority has refused an application to set up a sex shop the applicant may appeal to the magistrate's court, with a further right of appeal to the Crown court. I believe that an amendment is needed here. I think that my noble friend is aware of this point. I think he indicated that he was prepared to concede it. The precedent we have in this particular field is the setting up of betting shops under the Gaming Acts. The same machinery existed there. Appeal to the magistrates' court, and a further appeal to the Crown court. Of course, by the time the appeal has got to the Crown court it is getting pretty remote from the influence of local opinion. The result has been, because most of these appeals were betting shops and went to the Crown court, that an absolute rash of betting shops has been allowed to be set up all over our urban areas. Far more than anyone could think to be necessary. But, where there is enough money about, of course people will go to appeal.
There is a danger that, unless we give the local authority a stronger position than the schedule does now, they will not be successful in resisting the appeal in the Crown court, and we shall have a similar experience with sex shops as we did with betting shops. This is very much related to a point asked by my noble friend Lord Sandford in a very clear question. I think my noble friend Lord Belstead indicated that where a local authority judged that by the nature of the locality, and in all the circumstances, a sex shop was not suitable, while they had to consider each application on its merits, they could give a negative answer. We shall wish to hear my noble friend say that again, and make it a little plainer on the face of the schedule.
The final point I wish to mention briefly, a point again that was discussed in the Commons, is the fine. The fine has been set at £5,000 which, on the face of it, sounds a large figure, but those who are knowledgeable in this matter indicated that this really is a bagatelle in this field where so much money is being made. Indeed, as the noble Baroness will remember, the Front Bench speaker from the Opposition in the Commons suggested that imprisonment should be part of the punishment. But this was generally felt to be undesirable in the present circumstances where custodial sentences are so much to be deprecated. But I believe

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that we should ensure that the fine is something more substantial, perhaps recurring or perhaps a larger figure. Again this is a point we could look at on the Committee stage.
May I conclude by saying that the Committee stage is obviously going to be important here. I and my noble friends will be putting down some amendments which we hope will improve the schedule and strengthen it, and I do not doubt that other noble Lords will too, so that we can ensure that when the schedule leaves us it will be as effective as possible in controlling something which gives a good deal of anxiety throughout the country.
The Lord Bishop of London: My Lords, before the noble Lord sits down, may I ask him a question? I do not know whether I misheard him earlier in his speech, but I thought I heard him say that, contrary to what I had said, because sex shops existed some form of control was necessary. Would the noble Lord accept that I did in fact, having made clear my position on sex shops, accept that control is necessary and what matters are the terms on which it is provided and the context in which it is done, so as to be the permission of what is regrettable and undesirable rather than the licensing of what is perfectly acceptable?
Lord Nugent of Guildford: My Lords, I must thank the right reverend Prelate for making that further explanation. If I did not do him justice, I apologise. I do not think our minds are far apart on this.
5.8 p.m.
Baroness Ewart-Biggs: My Lords, I too should like to thank the Minister for his presentation of this Bill, which seems to be a Bill which has a mixed range of issues but which are, many of them, closely affecting people's everyday lives and relate especially to the changing pattern of life. First, I should like to comment on certain of the clauses in this Bill which appear to me to affect today's youth. I feel strongly that any division between the generations is a dangerous situation and an unhealthy one for society, and that it is becoming increasingly important to try to look at new legislation from a young person's point of view with regard to how it will affect him, or her, in the sort of life that the changing world is offering them.
I myself have three teenage children, and I am as concerned as most parents about pressures and anxieties to which today's world exposes them. Therefore, it seems essential to try not to exacerbate such anxieties by controls which they could see as being unreasonably directed against them. With this particular consideration in view, may I comment on Clause 1, which relates to the licensing of places used for public entertainments. As my noble friend Lady Birk pointed out, this Bill would remove from metropolitan authorities the power of decision over the outdoor entertainment, which obviously mainly means pop festivals.
There can be no doubt in any of our minds as to the effect a pop festival must have on the locality in which it is held. Such festivals, by their very definition, require maximum attendance and maximum noise, neither of which are at all conducive to the quiet life of the local residents. So it seems entirely right that local authorities, representing the interests of those
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residents, should have the power to decide about them. Equally, it should and must be their responsibility to combine a respect for the sensitivities of their local residents with a certain open-mindedness towards the youthful recreation and entertainment. Noble Lords with great experience of this have already given their views and there is little I can add, but I feel strongly that it is not only wrong but also self-defeating for authorities to take a uniformly hostile attitude towards this teenagers' style of entertainment on the grounds merely of disturbance.
I remember clearly the first time one of my children said he was going to a concert. I fondly thought he was referring to Beethoven and Bach at the Albert Hall. Since then of course I have learnt better and appreciate that when teenagers talk about a concert they can only mean a pop concert, and there must be a tremendous number of teenagers like that. We must therefore accept that this is an important and major source of modern-day enjoyment, relaxation and entertainment for the young. Indeed, when compared with some other pastimes young people with too much time on their hands might indulge in, listening to loud music is to my mind a good way to let off steam and can be highly preferable to many other activities. Very often agreement could be reached between local authorities and the organisers of festivals on how to find that balance between the interests of local residents and the interests of the young music fanatics.
In relation to Clause 4, which deals with the question of take-away food shops, again I would point out that these shops now have an important place in young people's lives. The pattern of eating for children has completely changed compared with the days of cottage pie and stew. They have been replaced by the food they get from take-away shops, and really the worst they can do in such places is make a noise and perhaps also make a mess, which again seems to be a much more innocuous way of entertainment for them than many other things in which they might indulge. I believe, therefore, that take-away food shops should remain open as late as possible, with the relevant safeguards, because they not only provide what is needed by people with regular jobs, but, as I say, provide a harmless form of entertainment for teenagers.
I also applaud Clause 15, which requires the registration of enterprises concerned with tattooing, ear-piercing and so on. There is no doubt that a great number of young people, some of them very young and now of both sexes, wish to have their ears pierced. It has become completely acceptable for boys of 16 and 17 to have an ear or both ears pierced, and they are the last possible people who would look towards the cleanliness of the establishment they might go to. While the Bill is concerned with requiring the registration of those engaged in those activities, as my noble friend Lady Birk said, the Government might consider imposing the same requirements for establishments providing ultra-violet sun-tanning and possibly even sauna baths; I should have thought that both those services required a high degree of expertise and should also conform to the rules of cleanliness required by the clause.
On an entirely different point, but again very much affecting the young, concern has been expressed that the Bill does not contain any provision about glue-sniffing.

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Perhaps it is too controversial a matter and this Bill is not a suitable vehicle. Nevertheless, I urge the Government not to miss the opportunity at least to look at this heartbreakingly tragic habit which is indulged in by some of Britain's least fortunate children.
Clause 31 has been mentioned by various noble Lords. It provides for the control of fly-posting. We should all welcome it, but in my view the provision could go even further, for example to control the results of the use of spray-cans on walls and buildings. Some graffiti daubed in huge lettering can be extremely offensive and I should be interested to know the Government's thinking on that. After all, the Bill would seem a highly appropriate place for such control.
Regarding the controversial part of the Bill, that dealing with sex shops, I admire the Government for taking on the issue and grasping this particular nettle, and although obviously the Bill is not a perfect vehicle for dealing with the problem, nevertheless they are not letting pass the opportunity of trying to improve on the present situation. I suppose that, as this is such a highly moral issue, we should perhaps ask ourselves why we dislike sex shops so much; why do they appear so offensive to us and why do they instil in so many of us a sense of outrage and disgust? I expect that we would all answer that question slightly differently. For my part, I judge them from the following viewpoints: first, I do not like the way they look; secondly, I am totally opposed to the fact that fortunes are made out of a trade concerning the degradation of women; thirdly, I abhor the fact that the sensitivities of so many are being hurt by the presence of such shops in their localities; and fourthly, I am appalled when I think of the coarsening and brutalising effect the exhibition of the kind of wares which they trade must have on young people who no doubt frequent them. After all, a 12-year-old can easily pass for 18 nowadays and I should think that quite a few children pass through these shops, not least because they are curious.
I suppose that if my first requirement were met and sex shops could be transformed from sleazy, down-at-heel-looking premises filled with shifty, unhappy-looking people into highly decorative and brightly painted places full of open-faced, laughing people, then my further objections might slightly diminish. But I am afraid we cannot necessarily count on that happening, so for those of us who find it difficult to wish to ban any institution for which there appears to be a place in society, all we can do is very much welcome the Bill and try to help to see that it contains the necessary provisions to diminish the ill-effects that such an institution can have on the rest of the community.
In that context, there are a few points I wish to make. The first is to support my noble friend Lady Birk in relation to the very word—its use has been referred to by many noble Lords and I believe it plays an important part for all of us and the general public at large—"licence", for it will always convey a form of legitimacy. We have driving, dog and television licences, all of which convey that it is all right and totally acceptable. I urge the Government seriously to consider replacing that word, and perhaps "permit" would be a very much better one to use in that it has a slightly different connotation and could
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be used in precisely the same way. It would imply that the person wishing to get this permit had to earn it, had to warrant that he deserved it.
In relation to the fine proposed, I know there has been much discussion about the level of the fine, but I should have thought it was most important to ensure that whatever sum is fixed, it should be index-linked, otherwise it might very soon represent a completely false amount. A small point about which I should like information concern Schedule 3 (2); exactly what is meant by "relevant locality" for the establishment of sex shops? I do not understand where such a locality could occur and whether there is not an ambiguous quality about that phrase. Again, I support my noble friend Lady Birk and others who have spoken about the words used in the definition of "sex cinemas" and "sex shops". I feel most strongly that to include such words, which are quite horrific, would seem only to bring about a greater emotive quality and abhorrence to that which already exists without seeming to serve a very great purpose. There are so many useful aspects to the Bill that very much relate to the changing pattern of life that I strongly support it.
5.19 p.m.
Lord Houghton of Sowerby: My Lords, I warmly congratulate my noble friend Lady Ewart-Biggs for having brought into the debate a breath of fresh and youthful air. We so rarely here the voice of the young in your Lordships' House. The rarest thing is to hear it directly; it is still rare to hear it indirectly. But this afternoon surely we have heard a message from young people that we have not heard earlier in debate.
That brings me to my first point, that basically this is a Bill to curb the liberties of the subject. It really ought to be called Local Government (Miscellaneous Curbs of the Liberty of the Subject) Bill because it is all to do with licensing; it is all to do with what local authorities already have in the way of powers, or what they want or need to enable us to love our neighbour as ourselves by stopping him from doing the things to which we object. We are all good at that, and I confess to being in this business myself in a small way because I object to people being cruel to animals.
This point enables me to refer to an incident in the progress of the Bill in another place which interested me greatly. It was the attempt that was made to incorporate in the Bill the provisions of the Pet Animals Act 1951 (Amendment) Bill, which I have on two occasions introduced into your Lordships' House, which received a Second Reading in this House for the second time the other day, and which is down for Committee stage on Thursday.
There is a lot in the Bill about street trading, but market places are excluded on the ground that they are not streets. In any case separate statutes apply to market places, and the Pet Animals Act 1951 is one of them. The question raised in another place was whether we could dispose of the matter of the sale of pet animals in market places by incorporating provisions in this Bill. The point was debated for a short while, and the Minister of State indicated that it might receive fresh attention before the Bill completed

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its passage through another place; but it did not. So I shall explore the possibility of following that up in the later stages of the Bill.
Now I can pass to the new centre of interest in the Bill, the so-called sex establishment and sex shop. I told your Lordships the other day that the Report stage of the Bill in another place would be occupied mainly with the question of sex shops and possibly pet shops, but it turned out that it was all sex shops. Overnight the Bill had been transformed from being an unexciting parliamentary exercise into making the sex shop the superstar of our current legislation. Sex is going to dominate the subsequent proceedings on the Bill; but perhaps it ought to, because it received little enough consideration in another place. They swallowed the lot on the Report stage in one go, and there are many aspects of the relevant schedule which require close examination, but did not receive it in another place. So I hope that we shall scrutinise these provisions of the Bill with some care.
With regard to the general issue of the inclusion of these provisions in this or any other Bill, I suppose that what many noble Lords, including myself, say in your Lordships' House on the issues of the day is predictable. For example, with great respect, I could have said largely what the noble Lord, Lord Nugent of Guildford, was going to say, and no doubt he is now thinking of what he expects I am going to say. Well, probably we are not replenished often enough or bountifully enough in order to get the new point of view, and that is why the speech a few moments ago of my noble friend was so interesting and so pleasant to listen to.
Your Lordships know that ever since I have been in this House I have opposed everything that has come up here to make way for moral censorship, to decide what we shall see and what we shall read. I believe that we must be on our guard against repression and against suppression, while at the same time we must respect the views and feelings of others who may reasonably ask for some safeguard against unnecessary offence. I am not unreasonable in these matters, and I am sure that your Lordships generally are not unreasonable. I thought that the spark of civil liberty shone bright and clear in your Lordships' House, but I am not so sure about it now. That is why one must speak on the question of where these things are leading to, and I shall come to that a little later.
At this stage I would say that had the clauses and schedules regarding sex shops been introduced into the Bill in your Lordships' House we could have taken strong objection to their being brought here directly without much more consultation and consideration elsewhere. The fact that they were introduced into another place at the very latest hour must at least recognise the point that that is the elected Chamber and the Members there have responsibilities to constituents, which we do not have. Nevertheless, we must be ever watchful of our civil liberties in this House, especially when, to deal with evils, Members of another place sometimes rush in a state of panic to introduce reforms which are being heavily pressed from their constituencies.
The people of this country always tend to look for cures. Very rarely are they interested in causes,
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unless they become a little frightened, unless it is Brixton or Toxteth. Then of course they want to know how it all came about, how it happened, and we have committees of investigation into the root cause of things which disturb our peace of mind greatly. But when the public are being merely censorious they do not care about causes; all they deal with are manifestations, and all they think of is stopping them, leaving it there, not going more deeply into the cause of what is believed to be an evil development.
The hub of the sex industry is in Fleet Street, and sex shops are among their retail outlets. Promotional support comes from some of the multinationals, such as the cosmetics and toiletries industries, the seductive products of which I need not dwell upon. Even the cigarette manufacturers help to stimulate sexual desire and activity by associating smoking with romantic love and manly vigour. What is the "Marlboro country "all about? I cannot leave the religious institutions out of it, either, for they never stop talking about the possible evil consequences of what, in a newspaper the other day, I saw described as the most exciting pastime in the world. This is what we are up against; this is what sex shops are expressing in commercialisation and in merchandise—the stimulation which has been put there through other agencies.
I do not think that we in this House have any claim, by either history or composition, to be the apostles of puritan England. In any case I doubt whether we are really qualified to tell the young what they should do about sex. My noble friend Lady Ewart-Biggs is much more qualified in that respect than I am: but I would say that for the most part young people are finding out for themselves. I would add that those who try to help in a practical way all too frequently get abused as being promoters of promiscuity. We have heard all this in your Lordships' House: people who are trying responsibly to guide young people through these pressures, through these complexities and conflicts, are abused as being the purveyors of the means of promiscuity. I think it is deplorable. The truth is that throughout the ages the pursuit of sexual guilt, which has been implanted in all of us, and sexual deviation, which has been reviled down the ages, is relentless and severe in punishment.
Restraints upon liberty and the right to do as we like are unavoidable in a complex and congested community. Our lives are not entirely our own, for we have to learn to live together. I will make big concessions to the cause of social justice, and even bigger ones to the cause of social harmony. But I will make no concessions to bigotry. I lived with it too long as a youth. Nor will I make concessions to the reimposition of the excesses of moral fervour, which I have also experienced in my lifetime. Every move we make in the direction of Part II of this Bill has to be examined from that point of view.
Motives are as important as deeds. Motives indicate where we are likely to be asked to go next; and after each step along this path we should stop, look and listen. If we listen hard enough just now, we hear tramping down the corridor from another place, another Bill which has already been welcomed before it has arrived. These new measures of restraint and control are following too closely upon the Indecent Displays Act last year for the comfort of those of us

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who are ever vigilant in these matters. So I say, watch for the next move. The Bill has already had its Second Reading in another place.
As long as I can I shall go on sounding the warning that I think your Lordships' House must heed: that it must not connive, co-operate or conspire with reactionary forces if it is to retain its standing in the community as the guardian of civil liberty in this country.
The Lord Bishop of Norwich: My Lords, before the noble Lord sits down may I ask him whether, when he used the phrase "the spark of liberty to be maintained" earlier in his fascinating speech, which we have listened to with the greatest care, he was referring to the definition in Schedule 3, at the top of page 54, which says that "sex articles" concern:
"acts of force, restraint, violence or cruelty …"?
Did he really mean that by allowing those the spark of liberty was maintained?
5.32 p.m.
The Earl of Halsbury: My Lords, unskilled as I am in the complexities of local government legislation, I have to confess that Clause 2 and Schedule 3 are in fact the star which attracts me to perform in your Lordships' House this evening. Studying the Bill as I have, it appears to me to be the central Government response to a local government request to put a mischief under control in their districts. Accepting it on that basis, one must not criticise it for being what it is not. It is not new criminal law on the subject of obscenity and pornography; it is a response to a local request. Therefore, we cannot presume that that response will be uniform throughout the nation. That would be tantamount to telling local government what it is that they are to resolve under Clause 2 of the Bill.
The way that central Government have gone about it is somewhat circumambulatory, and their circumambulatory approach via the route of licensing has of course led to misunderstanding on the basis that licensing always appears to imply condonation. This particularly applies to the objections which have been raised on the references in the schedule to sadistic and masochistic and deviant forms of sex. I shall come to the details of that later. But I should like to begin by expressing my wholehearted agreement with the right reverend Prelate the Lord Bishop of London on the need to make it clear, through the wording of the Bill, that it is possible for local government to resolve, in effect, "We shall have none of this in our area at all", and in Committee I hope to introduce some amendments to the beginning of Clause 2 on the lines of, "Provided it shall be lawful for a local authority, having so resolved "—that is, that Schedule 3 should apply—" to resolve also that no licences should be granted in consequence, and that such resolutions should not be subject to appeal to the Crown Court as provided for in the schedule."
That would, in effect, write into the very beginning of the Bill that a local authority is master in its own house and will not have its intentions interfered with by a permissively-minded Crown Court. This applies particularly to the criticism made by Lord Sandford,
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who pointed out the intellectual dishonesty of proceeding to place what is in effect an embargo, not straightforwardly but by chivvying the applicant from pillar to post until he finally runs out of the district altogether. What sort of leadership is that? I very much prefer the proposal of the right reverend Prelate the Lord Bishop of London.
Now I come to this question of sadism. I want those who perhaps disagree with me on this matter—and I have talked it over many times with my noble friend Lord Nugent of Guildford, with whom I have been fighting shoulder to shoulder for many years—to consider what would happen if the modifications which the right reverend Prelate the Bishop of London would like to see, and which I should like to introduce, are enforced. It would mean that the embargo which the local authority sought to place on having any kind of sex shop at all would not apply to sex shops which went in for sadistic material. So, instead of being (as it were) restrictive, the Act would all of a sudden become permissive in relation to that class of material. That is why I think that it ought to be in the Bill, and why I would support its inclusion.
I naturally support the views of the noble Lord, Lord Belstead, in introducing the Bill, that it would be lovely to move paragraph 25 of the schedule up to the beginning; but, by some manoeuvre or other, could we not put it in Clause 2 of the Bill, making it quite clear that it has a very high status and that nothing would be enfranchised that would be contrary to any other law?
I am speaking last in the debate, and I do not want to take up the time of the House, but I would encourage the Government to take no counsel of their fears. The request for this legislation may mark a turn of the tide. The permissive tide, of which my old friend Lord Houghton of Sowerby is such a staunch advocate, may hopefully be retreating. I believe that immorality does not really make us happy and that indulgence in obscenity leads only to disgust, as expressed so eloquently by the noble Baroness, Lady Ewart-Biggs.
My Lords, the Provinces are much less permissive than the metropolis. They regard, rightly, the condition of part of our capital city as a disgrace to the nation, and I agree with them. The Bill is their opportunity to set the nation as a whole a good example, and I should like to see us strengthen their hand in Committee when the time comes.
5.40 p.m.
Baroness Fisher of Rednal: My Lords, in standing here for the very first time, I do so with a great deal of trepidation, especially as we have been considering in such great detail sex and sex shops. I will not dwell on that aspect at great length, but in commencement I should like to thank the noble Lord for introducing the Bill and for introducing it in such a simple way that we quite quickly understood the various clauses, bearing in mind that he apologised to us that the printing of the Bill had been delayed.
I think it would be unfortunate if this Bill, so worth while in some respects, were to enact provisions which are more restrictive than those to be found in recent local Acts; and these local Acts have primarily been promoted by the large metropolitan authorities and, in the words of my noble friend Lady Birk, by dint of much trouble, expense and, of course, parliamentary

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time. I think it was the noble Lord, Lord Evans of Claughton—and I hope that I do not misquote him—who stressed (as was stressed in the debate last week) that local government is not about uniformity; local government is about government in the localities. Therefore, because the various parts of the country will have different problems to face and different controls that they wish to put into place, there is a greater need for optional requirements; and this is why 1 would support the noble Lord, Lord Evans, on this point, bearing in mind that in many instances the metropolitan authorities have the same problems as London. I think that this is sometimes forgotten when the Government try to get uniformity.
Many noble Lords have made a point of paragraph 1, Schedule 1—the provisions covering licensing of public music, singing and dancing. I am concerned about this legislation being brought in to this particular Bill. As other noble Lords have said this afternoon, in the large metropolitan authorities where much crime takes place, it arises very often from those establishments that have drink, music and dancing licences. I serve as a magistrate in the City of Birmingham. Over 400 magistrates are on that bench; so that by no stretch of the imagination can one say that we are a small, bigoted group of people who want to influence another, larger group of people. Those 400 magistrates see the results daily—and the magistrates in Birmingham sit every day of the week, including Saturdays—when we have brought before us the serious crimes, the "actual bodily harms", the stabbings that take place, especially in the city centre establishments that have drinking and music and dancing licences. I think that the views of the Magistrates' Association and the views of the Justices' Clerks' Society must be taken into consideration. I hope that when we come to the Committee stage of this Bill we shall find the Government willing to accept amendments.
I say this in the kindest of spirits, for it is only since 1980 that these Acts have been put on the statute book. If we look at page 85 of the Bill we see the extent of the repeals. We see the West Midlands County Council Act, the Cheshire County Council Act, the West Yorkshire Act, and so on down the page. All these Acts will be repealed under this legislation. I should like to ask the noble Lord whether these authorities mentioned in the schedules have been consulted: whether there has been discussion by these local authorities publicly in the council chambers; and whether they have consented to the repeal of their legislation.
My Lords, if I may go on quickly to late-night opening and take-away food shops, I go along with the legislation about the control of noise and nuisance. I should like to support my noble friend Lord Underhill when he described much of the nuisance as arising from the packaging and litter, which is a source of great concern to the people in the surrounding locality. One of the first things which happens with late-night closing and take-away shops is a lowering of the standards of the neighbourhood—not because of what is being sold inside the premises but because of the filth and litter that arises from the sale. Perhaps we can look again into this and other points at the Committee stage.
I listened with great interest to what the noble Baroness, Lady Ewart-Biggs, had to say. I should
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like to emphasise the point that she made with respect to bill-posting. What annoys many people is the use of the spray paint canister—and I think that the noble Baroness, Lady Ewart-Biggs, spelt this out quite clearly—where whole buildings can be desecrated. One goes to tube stations in London and to the underpasses in many large authorities and one sees the effect of paint spraying. One would have thought that some legislation on this could have come along with the bill-posting legislation.
I have a small question on ear-piercing. When it says that people have to be licensed, does this mean that those jewellers—and there are many of them in large cities who provide an ear-piercing service, for, obviously, if one sells earrings and one can get people to have their ears pierced, the two go together—will have to become licensed under the Bill?
I was interested in the problem which faced both the right reverend Prelate the Bishop of London and the noble Lord, Lord Evans of Claughton, when we started to discuss what some people describe as the "star turn" of the Bill; that is, the provision dealing with sex shops and sex cinemas. It seems as though the right reverend Prelate has a problem in that he has to satisfy both points of view with his congregation just as it seems the noble Lord, Lord Evans of Claughton, has to satisfy both sections of his electorate. I can understand that the Government have taken into consideration and have taken on board a problem which is a very serious problem. As we have heard today, this is something which has serious moral overtones—and no politician likes to come down on one side or the other on moral grounds. The Government are to be congratulated by trying to meet in the Bill an anxiety which has been ef great public concern for the last two or three years —as has the spread of these kinds of shop, not only in the capital city but up and down the country.
I am not going to go into any great detail about the debate on sex shops. I think that many noble Lords have given their opinions today and that the Committee stage of the Bill will be long, detailed and controversial upon that particular subject. I would go along with my noble friend Lady Birk about our making use of another word, "permit". I also suggested to her another wording which might perhaps be: "Subject to regulations laid down by …" and then followed by the name of whichever is the local authority.
Finally, as a matter of principle, I am concerned about the provision in Clause 36, which is designed, as far as I can read, to empower the Secretary of State to repeal or amend local provisions which appear to him to be inconsistent with, or to have become unnecessary in consequence of, any provision of the Bill.
We on these Benches would like assurances as to the consultation process which the Secretary of State will undertake before he exercises these powers. We seek clarification as to what is meant by "inconsistent" and "unnecessary". Is wholesale repeal of local legislation and provisions to take place? If so, the obtaining of the local legislation will have been a complete waste of time, as I have said, in the main for the metropolitan authorities, which had a much quicker time-scale that they had to agree with than did the Association of District and County Councils.
General legislation will have been allowed to override local legislation, and I see this—and my Party

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see this—as another move forward to centralism. This was one of the points of the debate that we had last week on local rates. No doubt some noble Lords on the opposite Benches will share our concern that local—and in most cases more extensive—and better provisions should not be lost after token consultation. These are my observations, and I conclude by saying that with my noble friend Lady Birk I look forward to the Committee stage of the Bill and the amendments which we shall he putting forward.
5.52 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, before I begin to wind up on this debate, may I congratulate the noble Baroness who I understand was speaking from the Dispatch Box for the first time? As always, she spoke very forcefully and if I could not agree with everything she said—indeed, had I done so it would have been the first time—at least one always has great respect for her background and knowledge when she talks, especially in this area.
It gives me great pleasure to wind up on this Bill. I consider it a very useful measure in a very valuable process: the elimination of many thousands of obsolete or unnecessary provisions in local legislation. The result should be a body of local legislation which is relevant to present needs, greatly reduced in bulk, accessible to those who need to use it and capable of modification in later years when further local Acts are passed.
The first Bill of this kind was introduced by the Opposition when they were in power in 1976, and they initiated discussions on the content of the Bill currently before the House. The Government were pleased to continue the work thus begun and bring it to fruition. I should also like to take this opportunity of thanking the local authority associations for their help and cooperation in preparing the subject-matter of the Bill.
A number of points have been raised during this debate which can be discussed in greater detail in Committee. However, I can offer some comments on them now.
Clause 1 and Schedule I have raised the issue of fees for charities but as so little was said on that I can pass quickly over that and come straight to the first point that was made by the noble Baroness, Lady Birk, when talking about licensing of public entertainments. This aspect has been criticised on a number of grounds. The first criticism was that it is mandatory and not adoptive. Secondly, that it transfers licensing powers from the licensing justices in some places which they consider unnecessary. Thirdly, that it will add to local authority costs. Fourthly, that it will permit local authorities to licence themselves. Fifthly, that it does not permit the licensing of pop festivals and removes existing local authority powers to do so.
If I may tuck the first four of those together, since they are bound up in the purpose of this scheme, in the Government's view the main aim of music and dancing licensing is no longer simply or primarily to maintain law and order, although this is without question still one of the aims of the licensing system. We see it very much more as a means of ensuring the safety of the public from fire and the adequate construction and
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arrangement of the premises, and a measure of how seriously we take the need for proper safety standards is the fact that we are making the licensing code mandatory. Two local authorities, the district and county council, are concerned with structural and fire standards, and it is from those two that we selected the licensing authority. In the end the district council seemed the more appropriate because it would be better able to judge local feelings and the risk of noise nuisance in a particular area.
May I now come to the issue of licensing pop festivals. The criticism there comes from a power to licence open-air events, particularly pop festivals. If I may deal first with the recommendations of Baroness Stedman's report (if I may refer to it as such) that a national licensing scheme is preferable to a patchwork system of controls. This is a conclusion which the Government never accepted. If, as the working party's report concluded, licensing brings with it a number of problems, including enforcement, there can be little virtue or logic in extending it throughout the country. Nor are we worried about the comparison with London. Pop festivals of the size and type which take place in the open countryside simply do not take place in London. The public entertainments provisions which are in force there and which were designed to cover indoor entertainments may work well there.
The question of the repeal of existing local Acts is more difficult and the Government are very alive to the feelings of local authorities who stand to lose current powers if no amendment can be made to this Bill. Therefore, although I can give no undertaking, I want to say that the Government are doing all they can to try and find a solution to the problem. A point was raised by the noble Baroness, Lady Stedman, concerning licensing public entertainments. In general, she was concerned that there was, as she said, no right of appeal against the refusal of a licence. There are extensive rights of appeal to the magistrates' court and subsequently to the Crown court under paragraph 15 of Schedule 1.
Now if I may refer to the subject of sex shops— which I must say makes quite a change from rate support grant, which is my normal field of activity!— may I say I have listened with great interest to the views expressed this afternoon about the proposals in the Bill which would allow local authorities to control sex shops and sex cinemas by means of a licensing scheme.
I think it is fair to say that, in considering the general question of whether such controls were desirable, most of those who spoke were aware of two conflicting currents. Without exception, concern was expressed about the present lack of controls over those premises: in particular, about the manner in which they can appear overnight in the most unsuitable of locations. Those who spoke recognised, I think, that the proposals in the Bill would afford local authorities with a very real measure of control over these establishments, and ore which would be widely welcomed by those authorities grappling with this problem.
I should like to emphasise that in introducing these provisions the Government are responding to widespread concern in the country as a whole. This concern does not come simply from local authorities or local authority associations: it comes from individual

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Members of Parliament and from many members of the public who have written to my honourable friends in the Home Office in strong and forthright terms about the serious social consequences they see stemming from the unrestricted spread of sex shops. The Government are entirely convinced of the need to respond to this concern and indeed they believe it would have been quite irresponsible not to have done so. The proposals were widely welcomed in principle when they were first debated in another place and we have every reason to believe that they will receive a similarly strong measure of support in your Lordships' House. But of course some, including those who have clearly said they supported the proposals, expressed disquiet about the principle of licensing shops which, as the right reverend Prelate the Lord Bishop of London has said and indeed as another speaker also mentioned, are found morally objectionable.
The Government fully understand these reservations, but we think it is essential to stress, as did my noble friend earlier today, that licensing would not afford any legal protection or immunity for a sex shop or a sex cinema. My noble friend Lord Belstead said it, and I repeat it now for emphasis: nothing will be made law ful which is at present unlawful. We are acting to control something and not to allow something which is not allowed at present; but it is impossible to control something unless one is prepared to acknowledge that it exists. The objections of principle to licensing have in the end to be weighed against the practical advantages of providing local authorities with effective powers where at present they have none and in the light of the difficulties in controlling these establishments by any other means, be it planning legislation or the vexed matter of the general law on obscenity.
This Bill is clearly quite inappropriate, in our view, for a reform of the law on obscenity such as the right reverend Prelate and the noble Lord, Lord Robertson of Oakridge, would like to see. We feel it would have been wrong for the Government to have attempted to do this either directly or by the back-door method whereby the local authorities could ban these establishments completely on moral grounds, irrespective of local circumstances.
As regards the Government's own long-term intentions on obscenity legislation, I think I must say very firmly that the reality of the situation, as we heard in the views expressed by the noble Lord, Lord Houghton, is that there are very wide differences of view both in another place and in your Lordships' House on the philosophical basis of any such legislation. In this peculiarly contentious field, I suggest that it would be fatal to attempt to legislate in the absence of some general consensus on what society should seek to achieve. We all accept that the line has to be drawn somewhere, but there are as many views on where the line should be drawn as there are Members of your Lordships' House. It will be clear therefore why the Government see no early prospect of legislation in this field; but to defer any action on sex shops until the prospects for general legislation were firmer would surely be to deny many members of the public any immediate remedy for their legitimate complaints.
Turning now from the principle of licensing controls to their practical application, it has been questioned—
The Earl of Halsbury: My Lords, if the noble Lord will permit me, before he leaves that can he make any comment at all on the proposal made by the right reverend Prelate, as endorsed by myself and as mentioned by the noble Lord, Lord Sandford, on the simplification of procedure whereby a local authority could say:" In our district, no sex shops"?
Lord Bellwin: My Lords, I believe there is provision in the schedule for objection, and I will cover that point before I sit down, if I may. There is provision for objection to sex shops' applications for licences. The local authority will take the content of these fully into account in considering whether to grant a licence. There is no need for explicit grounds for refusal or the grounds that people object. There is no reason why a local authority should not come to its conclusion that a sex shop is not desirable— the discretion will be theirs. That is the right they will have, and, unless I am missing the point very much—and I do not think I am—this is indeed one of the objectives of what we are proposing. I hope that in fact will satisfy the point made by the right reverend Prelate and the noble Earl, Lord Halsbury.
Lord Harris of Greenwich: My Lords, may I ask the noble Lord to clarify this point? It is a very important one and it would be most helpful were he able to be a little more explicit. Is he saying that a local authority can decide on prohibition as far so these establishments are concerned in its own local authority area? That is the point, and it is one on which I think we should all value the advice of the noble Lord.
Lord Bellwin: My Lords, I am not certain of the extent to which that can be done. I think the answer is "yes", providing they take into account the particular circumstances of their own area; but it may well be that this is something I shall have to make more clear than I am doing at the moment. I will certainly write to those who have raised the point and also to any others of your Lordships who may feel it is somewhat obscure. Certainly it is important that it should be made clear.
Baroness Birk: My Lords, before the noble Lord leaves that point—this was something that I left out of my speech because of time—are the Government taking into account that a local authority may decide that it does not want sex shops in its area, but sex shops, as they are now, are legal, so are there no rights for the people who want to have sex shops in that area? The Minister will be aware that it was suggested in another place that if there were sex shops in Brighton, Worthing could say that it did not want them. I think that we are getting near a form of repression over this, if we are not very careful.
Lord Sandford: My Lords, this is much the most important single point of the whole clause. I think that local authorities must be absolutely clear as to what their powers are going to be before they willingly accept this measure of control from Parliament. It may well be that the approach which the noble Lord, Lord Harris, has just suggested, of deciding in advance that they are not going to have sex shops anywhere in the district is going to far. But I would want to be quite clear that

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a local authority was going to be empowered to take the view that in respect of each particular application it could come to that conclusion.
Lord Bellwin: My Lords, so far as I am aware, the answer to that last point is "yes": that is my understanding of it. Should that not be so, then I will make it clear; but that is my understanding of the matter. Perhaps I may now turn to another point which was mentioned by the noble Baronesses, Lady Birk and Lady Ewart-Biggs, when they suggested that perhaps another term, "permit" might be used rather than the word "licence". I would respectfully suggest that this would not meet the point because it is surely wrong to think of licensing as signifying a seal of approval or as a permissive measure. It would be wrong to introduce amendments which might seem so give credence to this view of the concept of licensing. The term "licence" is a standard one which is used in virtually all the control systems embodied in this Bill, and it would be inconsistent to substitute in this particular case another word—I was going to say "for semantic reasons", but I understand exactly the point which the noble Baronesses are making. I feel that, for the reasons given, it is something upon which we could not embark.
Turning from the principle of licensing controls to the practical application, my noble friend explained in moving the Second Reading why it would not be proper in a Bill of this kind to consider providing local authorities with power to prohibit sex shops as a matter of general principle. He emphasised, however—I think that it bears repetition, and this confirms the point which the noble Earl, Lord Halsbury, raised—that, if a local authority decided that it was inappropriate to have any sex establishments in a locality and refused an application on that ground, this power, combined with the other grounds for refusal provided in paragraph 11 of Schedule 3, would enable local authorities to exert a high degree of control.
As my noble friend mentioned earlier, the Government are also considering the question which has been raised as to whether the Bill ought to be amended to ensure that a local authority's view as to the appropriate number of sex establishments in a locality cannot be the subject of an appeal. Of course, we shall take fully into account the views which have been expressed about this. But, whatever is done on this issue, there is little doubt, first, that controls are needed; and, secondly, that the Bill provides these very effectively and in a way which does not recognise illegality or pre-empt any future action in this field.
By some obscure Freudian design, the noble Lord, Lord Houghton, was the only one of your Lordships who managed to get both animals and sex into his speech. The Government are fully aware of the concern which has been expressed about the sale of pet animals from stalls and barrows in street markets. There have been a number of attempts in Parliament over the years to amend the Pet Animals Act 1951 so as to prohibit their sale. A Bill proposing this is currently before the House, as the noble Lord, Lord Houghton, knows, since it is his Bill. It received a Second Reading on 28th January and is to be considered in Committee on Thursday, 18th February.
During the Second Reading debate, my noble friend
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Lord Belstead took a full part in discussion of the Bill. Therefore, I do not propose to go over all the considerations which he suggested should be taken into account in assessing the case for the Bill. These are set out in the Official Report. But I should like to make the following very brief observations. The 1951 Act already places an onus on local authorities to have regard to the welfare of the animals, before a licence is issued to anyone selling pet animals from stalls and barrows in markets. Local authorities are empowered to arrange inspections, and if they are not satisfied they may refuse to renew a licence. In addition, there is other legislation—primarily, the Protection of Animals Act 1911—which is intended to safeguard the welfare of these animals. Apart from Club Row market in the Borough of Tower Hamlets, there have been few complaints, and I am not sure of the extent to which these have been substantiated.
The welfare of animals is a matter to which it is right that we should give continuing careful consideration. However, the proposal to ban completely the sale of pet animals from licensed stalls and barrows in street markets is not wholly justified, when considered against the wider considerations. The issue will, of course, as I have said, be discussed further in the context of the Bill of the noble Lord, Lord Houghton.
On the point raised by my noble friends Lord Sandford and Lord Ridley about the Government's proposals on additional powers for local authorities to assist industry following the Burns Report, may I just say this? This matter was, indeed, discussed in the debate of the noble Lord, Lord Northfield, on Thursday of last week. There has been a consultation paper put about. I think that the reason why we have put out a further consultation paper is that the specific proposals which the Government make in this direction outline five options, and, although I hope that these will not take long, we nevertheless felt it right that we should put this forward in the way we have done. When we receive the response we shall, of course, react quickly.
I feel that, particularly in the areas of the inner cities and so on, where there is a very great need—perhaps greater than in some other areas—for these powers to give the additional½p, it would be of great help, because I would remind my noble friends that in those cases it would be additional to the powers which already exist under Section 137 of the 1972 Act. But I think that we shall come back to that in due course.
I should perhaps refer quickly to one or two other points that were raised during the debate—
Lord Sandford: My Lords, before my noble friend leaves that point, can he say whether the Government intend to include in this Bill these provisions to which he has just been referring, or are they still undecided?
Lord Bellwin: No, my Lords. The powers will not come into this Bill, because, clearly, we could not delay this Bill any longer. Although I entirely take the point that the response to the conclusions should also not be delayed, I nevertheless have to say that those steps will not be put into this Bill. The noble Baroness, Lady Birk, referred to Clause 28 and was concerned about the protection of damaged buildings

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and the recovery of costs. The local authority cannot recover costs in relation to buildings subject to closing orders or undertakings, because it is thought that such a power would impose an unfair burden on owners who had already lost the use of such buildings by virtue of the order or undertaking. To that extent, the clause restates the existing position in Section 8 of the Local Government (Miscellaneous Provisions) Act 1976.
My noble friend Lord Ridley asked whether this will be the last miscellaneous provisions Bill. In view of the relatively short time left to 1986 when, as was said earlier, so many of the powers which local authorities have will fall, I should think that this will probably be the last one before then; and this is in relation to the effects of Section 262 of the 1972 Act.
On the other point which my noble friend Lord Ridley made, about the input of the local authority associations, some of the associations had a greater input than others. But matters which they raised, which were excluded, were exchanged because they often did not meet the criteria, or were only about problems affecting single individual authorities, and we have particularly tried in this legislation to cover situations concerning the generality of authorities.
The noble Baroness, Lady Birk, asked about the reconnection of services to premises where the owner had not paid his bill. I think we should want to consider what she said as to that, and I will take it away to think about. The noble Lord, Lord Evans, said that Clause 34 should be extended to cover aerodromes. There is existing enabling legislation for this purpose, as my honourable friend the Minister of State recently explained in a letter to the Association of County Councils. On Clause 26, the noble Baroness, Lady Birk, asked how the limit of £250 on the cost of works would be kept abreast of inflation, and I would say that it will have to be reviewed from time to time. The noble Lord, Lord Underhill, raised a point about powers of recovery. I thought that it was an interesting point, and we shall certainly consider it before Committee stage.
My noble friend Lord Nugent was concerned about the repeals. We accept in principle the need to repeal local Act provisions which are replaced by mandatory provisions in this Bill, or which modify provisions in public general Acts which are also amended by this Bill. We shall discuss this with the local authority associations, with a view to introducing suitable amendments. However, where provisions in the Bill are adoptive, local authorities are generally free to retain their own if they so wish, and these provisions will therefore remain in force.
In conclusion, I thank everybody who has contributed to a very interesting debate. I hope that the Bill will have a smooth, and—dare I say it?—a swift passage, though I have some doubts about that. But if we do not hope then all is lost. Then it will be able to fulfil its objective of eliminating uncertainty for local authorities. It will save them expense and it will save Parliament the time involved in the repeated consideration of similar provisions in numerous local authority Bills. I commend the Bill to the House.
The Lord Bishop of Norwich: My Lords, before the noble Lord sits down, I wonder whether I may ask him
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one historical and factual question. I am not sure that he will be able to give me an immediate answer, but I think the question is relevant. Regarding the principle of licensing about which the noble Lord spoke so eloquently, when street corner betting was a problem licensing appeared to be the way to deal with it. My factual question is whether the volume of known betting has increased or decreased since the licensing of betting shops. Similarly, when the problem of back-street abortions became a great moral issue, did licensing increase or decrease the number of abortions? Would the Minister therefore ponder this question philosophically in relation to the licensing of these tawdry, cruel and unpleasant sex shops?
Lord Bellwin: My Lords, I am sure that the right reverend Prelate knows that I ponder everything philosophically. To what effect and with what result is a matter of opinion. Would that the right reverend Prelate had asked me for some statistics, relating to block grant, or something of that kind, when I could have shown some knowledge. In the circumstances, I shall have to answer by saying that I do not know the answer to the right reverend Prelate's question, but I will certainly look into it and I understake to write to him about it.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Junior Hospital Doctors (Restriction of Hours) Bill [H.L.]
6.22 p.m.
Lord Wells-Pestell: My Lords, I beg to move that this Bill be now read a second time. Recent events appear to have overtaken it. On Friday last I was listening to the eight o'clock news on BBC Radio 4 when I was informed, along with countless others, that discussions had taken place, presumably between the junior hospital doctors and the Department of Health and Social Security, regarding shorter working hours. On Saturday morning I saw in the Guardian:
"Britain's 25,000 junior hospital doctors yesterday negotiated a cut in working hours. The Department of Health agreed that they should not have to work more than 90 hours a week. At the moment, 28 per cent. of them work for more than 104 hours a week, not all of it on their feet (for some of this time they are only on call) and 72 per cent. work more than 80 hours".
I introduced this Bill and it received its First Reading on 17th December. At no time since then have I been given to understand by anybody, least of all the department represented by the noble Lord the Minister, that there had actually been discussions with regard to a shorter working week. Had this been so, and had been told that this was likely to come about, I should not tonight have troubled your Lordships with the Second Reading of this Bill. It would have been helpful if I could have been told that these discussions had taken place.
However, now that the Bill is before the House, I hope that we shall be able to concentrate our minds on the question of shorter working hours for junior hospital doctors. I am glad to see that half of the noble Lords taking part in this Second Reading debate are distinguished members of the medical profession—

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six out of 12, if my arithmetic is right. I think I can say that they have held very high office in the medical profession. One is a present Vice-Chancellor of a university, while another is an immediate past Vice-Chancellor. Between them they have been past Presidents of something like six Royal Colleges. 1 mention this because, so far as 1 can tell, no junior hospital doctor will speak tonight in this debate. I should like to feel that these noble Lords will be able to put the point of view of the junior hospital doctor.
The Bill seeks to restrict the hours worked by junior hospital doctors in order to improve patient care, to safeguard patients and, for that matter, to safeguard doctors themselves against the effects of over-tiredness and stress due to long spells of duty and insufficient sleep. It may be that not all noble Lords will agree with the details of the Bill. However, I am sure we all recognise that the long hours which junior hospital doctors are expected to work must be—there is evidence of this fact—detrimental to patient care.
So far as time permits, I want to demonstrate the problem and to indicate that the situation has worsened and has received very little attention. This is in contrast to other occupations, such as the transport industries, where the danger to passengers of drivers working long hours has been recognised and employees' hours restricted.
I am aware of the cost involved if the objects of the Bill now before your Lordships are to be implemented. recognise that it would be difficult for the progressive reduction of hours to be accomplished in the time set out in the Bill. Nevertheless, the suggestions embodied in the Bill could be thoroughly discussed in Committee, as could other ways of reducing the long hours undertaken by junior hospital doctors.
The problems of junior hospital doctors and the associated effects on patient care were brought to the attention of the Social Services Committee in another place when they reported on perinatal and neonatal mortality. This is the second report of the House of Commons Social Services Committee, HMSO 6/63. The committee subsequently investigated medical education. In this report, the committee's fourth, they noted:
"Junior doctors in this country are now on duty or on call for an average of 90 hours a week, and in many cases more than this".
Details of junior doctors' contracted hours, given in a Written Answer in another place by the Secretary of State for Social Services in February 1981, showed that in most specialties over one-quarter of junior doctors are contracted to work 104 or more hours a week, and that in two specialties, both surgical, more than one half of junior doctors are contracted to work for over 104 hours. The Social Services Committee of another place, to which I have already made reference, commented:
"Not only does this represent exploitation of junior medical staff but a doctor who has been on duty all day and all night cannot possibly be providing the best service to the patient".
The fact that doctors work only a proportion of their contracted hours has been used to argue that restrictions are unnecessary, but anybody who knows the workings will realise that it is of paramount importance that something is done fairly soon. Hours
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actually worked vary tremendously between specialties. A junior doctor in casualty may work harder at night than during the day, whereas a colleague in psychiatry may be called out only once a night, if that. In addition, a population's health is not scheduled to deteriorate at an even rate, and whatever the specialty, the demands on doctors' services vary considerably. In my submission, the fact that, on average, doctors work only a proportion of their contracted time is not a valid argument against restriction. It is important to recognise that situations can and do arise, so I am told, where a doctor may work almost continuously for two days and a night, during which time numerous decisions affecting patients' health are made.
I acknowledge that it is difficult to quantify the effects of this on patient care. Many doctors relate incidents where, because of tiredness, incorrect decisions have been made but corrective action has proved possible later. However, this is not always the case. The Health Service Commissioner's report on investigations completed in April to September describe the case of a senior registrar's delay in responding to an emergency call to attend a birth in the early hours of the morning. The baby was stillborn. The explanation for the delay was that the senior register fell asleep again after he had put down the telephone. The Health Commissioner concluded:
"The failure of the senior registrar to go promptly to the patient had a tragic result. It has not been denied that the stillbirth was avoidable. Overpowering fatigue is a familiar torment of those who work in the caring services, but duty is not to be denied and the senior registrar should have come when called".
This was the statement made by the Health Commissioner.
Many doctors, because of the high degree of professionalism and responsibility expected and accepted, may believe along with the Health Commissioner that long hours go with the job. I am sure that that will be argued this evening, although I hope it will not. The second study, to which I have already referred, demonstrated the doctors' stress came as much from subjects trying to conform to what was expected of them as the fact that they had been awake for a long time. This can have fatal consequences for doctors as well as for their patients.
Last year—1 have the name but I will not mention it—a senior house officer in a Manchester hospital killed himself. His parents said that he was terrified of making a mistake while overtired and blamed his suicide on that. Most doctors' experience is different; they find reserves of concentration and energy which enable them to react quickly and relatively efficiently in emergencies. Once the emergency or period of duty is over, however, they react in expected ways to the long working hours. There are several reports of doctors who have been involved in car accidents because they have been found to be tired. In 1976, another doctor whose name I will not mention fell asleep while driving and killed himself. He had been working continuously for more that 24 hours. The increase of sophistication of medicine over the years has added to the causes of stress in junior doctors. Many of the specialties existing today did not exist 10 or 20 years ago. Modern perinatal and neonatal care, and cardiology, demand fast accurate decisions alongside a great deal of technical competence.

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Stress has also increased because the means of contacting doctors have been improved. The system of bleepers was introduced in the early 1960s. Prior to that time a request for a doctor was given by a light; but if the doctor was busy with another case, the light was not immediately noticed. Bleepers have changed all that. Improvements in medical technology and communications have improved patient care enormously. Meanwhile, the same improvements have increased the pressure on doctors because their hours of work have not changed to take account of the extra demands which are being made upon them.
While most people have benefited from improvements in the standards of living over the past 20 years, the position of junior doctors has stayed the same. I might say that it has even got worse. This relates not only to conditions of work but also to non-employment activity. Twenty or 30 years ago, it may have been acceptable that a junior doctor, because of long working hours, could not contemplate starting a family until he had become a consultant or a general practitioner. But that situation will not be, and should not be, acceptable today. Real incomes were such that many people had to postpone having a family. Improvements in living standards, particularly over the past 20 years have permitted fuller participation in family life and leisure activities, but I suggest that these general improvements are denied to a large number of junior doctors and their families. It is not good enough for us to say, "This is the sort of thing they knew was going to happen. They knew that this was the sort of thing they would have to put up with. It happened in our day and we are all right as a result of it."
The striking aspect of the junior doctors' situation is that there has been little official assessment of the effect of these long hours on patient care and doctors' health. I believe that the little sympathy which has been shown towards junior hospital doctors, or understanding of the contribution they make, has caused them a great deal of unhappiness. There are numerous other situations in which regulations on working conditions have been imposed to minimise risks to life, backed by extensive medical research This is particularly true of the transport industries, where passengers' lives arc at risk. Part IV of the Transport Act 1978 and the subsequent amendments limit the hours of work for a driver of motor vehicles or locomotives to eight hours a day, with a maximum of 48 hours a week—because beyond that, perhaps, they would be considered a liability to the lives and limbs of other people. There are also provisions for rest periods and for limits on periods of continuous driving. If we find it necessary to do that in respect of the transport industries, I want to say with the greatest respect that it is all the more important that we should do it in our hospitals.
The risk to air passengers from aircrew overtiredness and stress has been recognised almost since planes began to fly. The Civil Aviation Act 1949 set up the Air Navigation Order which requires that an airline operator produces a scheme for the regulation of the flight time of the crew members. This scheme must be approved by the Civil Aviation Authority which itself puts restrictions on hours to he complied with by the
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operators. The Civil Aviation Authority's regulations stipulate maximum duty hours, which vary according to the type of work. Pilots are under more stress, as your Lordships know, when taking off or landing. So hours are more restricted for shorthaul flying, and by the type of duty, on standby, on call or actually flying. Restrictions on doctors' hours could similarly take into account the type of work and duty performed. As yet doctors' work has not even been systematically studied. This is one of the things I hope the members of the medical profession who are speaking tonight will say is essential and should not be delayed any longer.
Most of the research on aircrew stress has been done in connection with military aviation. It is recognised that in time of national emergency aircrews must perform at peak efficiency, the cost of failure being great. In recent years several aspects of the nation's health have come under scrutiny, and the costs of correction weighted against the costs of neglect. Cigarette smoking is one example. More broadly, the basis of the National Health Service has always been some notion of national accounting of the costs and benefits of improving everyone's health. It seems all the more surprising, therefore, that the way medical services are provided in terms of working conditions of junior doctors, has never properly been scrutinised.
The Bill calls for reduction of hours in the first instance to 60 hours a week. It is an indictment of how we treat doctors at present that if we expected the same numbers of hours to be worked we would require, with a 60 hour week, a third more doctors. While it is realistic and while many of us will feel that this has to be done, I accept that it cannot be done immediately. But what I want from the Government, and therefore from the noble Lord the Minister, is some understanding of this problem, some acceptance that there is a problem, and what is more, some assurance that something will be done, and done speedily.
I want to draw your Lordships' attention to the fourth report of the House of Commons Social Services Committee dealing with medical education, and I quote from paragraph 121, which states:
"It strikes the Committee, as outsiders to the profession, that the hours that many junior doctors are expected to work and be on call—in many cases well over 90 hours a week—are indefensible. They represent exploitation of these doctors and, more seriously, a considerable risk to the patients they treat. We believe that the reduction of the doctor's contracted week, initially to a maximum of 80 hours, should be one of the Government's top priorities, and that the existing agreement to achieve this for junior doctors should be enforced. To this end we recommend that the Government should study different patterns of shift work and work sharing between different firms in a district".
The number of junior doctors on call could be reduced if cross-cover was arranged between specialities. There is an overlap in the training for certain specialities. I was going to quote geriatrics and general medicine. It is not necessary in terms of patient care to have two teams on call at the same time. Similarly, the number of wards covered by one person could be increased when doctors arc on call. I hope those members of the medical profession who are going to speak tonight will not think I am being presumptuous in saying that, being a non-medical person.
Better organisation of surgical care could reduce the number of doctors on call and the amount of work done by ancillary services. At the moment a patient goes into hospital the day before an operation. and will often

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only be seen in the evening, by which time the surgeon or consultant has already done a day's work. The patient is checked, both to ensure that he or she is generally fit and to sort out the details of the operation. Sometimes the operation, for medical reasons, has to be deferred, and that means that the next day's schedule is disrupted, and the day's work on in-patient care has been expended unnecessarily. The suggested remedy for this is that the patient goes in as an out-patient during the day before the proposed operation. Checks can be made during the working hours, and the time the patient attends the hospital prior to the operation is reduced, thus minimising expenditure on ancillary services. If the patient is found to be unfit for the intended operation, additional savings are made on the ancillary services. The patient does not have to suffer the stress and disruption to normal life associated with an unnecessary stay in hospital, and operation schedules could be more efficiently organised.
I suggest that further savings could be made without harm to patients if non-specialist doctors could do the general checks on the patient, leaving the specialists—shortage of whom exists in some subjects—to attend to problems specific to the proposed operation. In some hospitals improvements in efficiency have already been made in this or similar ways. There are indications that the changes are occurring because of the cuts in the Health Service. Some surgical teams, for example, have been forced to reorganise their work because of reduction in the number of available beds. But efficiency varies between hospitals and between firms within hospitals, and this is a matter which I think should be looked at.
At present about one-quarter to one-third of the junior doctor's time is spent waiting between clinics, or for consultants to do their rounds or on call. If further improvements in efficiency continue to be forced by reductions in Health Service finance, the number of hours actually worked will increase. The hazards to patients, and to doctors themselves associated with stress and fatigue, if doctor's contracted hours are kept the same as at present will also greatly increase.
This is not to say that improvements in efficiency are undesirable. Indeed, a reduction in junior doctors hours would increase the pressure to re-assess and change methods of work. The restriction on hours, however, would safeguard junior doctors' working conditions, and consequently safeguard their patients. This is not a matter which can be argued fully on an opening speech, and it would not be right for me to do so, or during the time of a short debate. It does need a careful investigation of what is really happening to junior hospital doctors. Again, I hope those who are taking part, who have many years of experience and a profound knowledge of what goes on—as distinct from what some of us think goes on, and I acknowledge there is that difference—will be able to support the view that we ought to be looking at this matter very carefully.
Lord Elton: My Lords, if the noble Lord will be so kind and if the House would permit, there is not a moment after the noble Lord has said, "I beg to move", when I can say, "Before the noble Lord sits down". I want to put one thing right. There was
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no question, at the conference to which the noble Lord referred, of any sort of negotiation. It was not that kind of meeting. I shall be referring to it in my speech and to the reasons leading up to it. But I would not like your Lordships or the noble Lord to feel that it in any way changes the parameters within which this debate is being held. It was not that kind of conference, and that was a misleading report, if I may say so. I must not make this a long interruption: I will expand on this later.
Lord Wells-Pestell; My Lords, I am most grateful to the noble Lord the Minister. I hope that he will expand on it, because it seemed to be very dogmatic. I shall confess that I was a little grieved that something like this should be going on—at least I thought that it was going on—when I might have been told about it. But if the noble Lord—I am coming to a conclusion—can say something which will give some of us hope and some of us encouragement that something will be done in the very near future about junior hospital doctors' hours, together with some kind of inquiry, some kind of investigation, into what the present position is and how it can be changed for the better, then I think that many of us might feel that this has not been in vain. My Lords, I beg to move.
Moved, That the Bill be now read a second time.—(Lord Wells-Pestell.)
6.51 p.m.
Lord Winstanley: My Lords, I think that the noble Lord, Lord Wells-Pestell, has rendered an important service by bringing forward this somewhat cautious little measure, if he will forgive me for so describing it. I describe it as "cautious" because, as the noble Lord, Lord Wells-Pestell, himself explained, its provisions are to be phased in over a period of years so that the full impact of the noble Lord's Bill is not actually felt until 1st January 1991—in other words, the noble Lord is proceeding by what I think Sir Winston Churchill once described, "the inevitability of gradualness".
But by 1st January 1991 much water will have flowed under many bridges. Many who are now junior hospital doctors will have become perhaps comparatively senior doctors in other capacities, and the junior hospital doctors of those days in 1991 may very well be working in hospitals of a very different kind from the hospitals which we now know. They may be working in forms of medical practice which are very different from the forms of medical practice with which we are now familiar, and they will also be working in a society in which there will have been, by then, a great change in our attitude towards the work ethic as a whole, and in which there will have been very many changes in the working pattern throughout life as a whole.
Nevertheless, I repeat that, whatever the fate of his Bill, the noble Lord has rendered a service by allowing us to debate a matter which really is of considerable public importance. I genuinely believe that, by ventilating this particular matter, it is possible that certain action might be taken administratively. It is also possible, perhaps, that the noble Lord the Minister who is to reply might be able to give us information regarding a number of current developments which

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are, in point of fact, relevant to this issue and which are already having an impact on our hospitals and which, perhaps, might help or might even hinder developments along the lines to which the noble Lord has referred.
The noble Lord has said, and rightly, that it is a fact that every day somewhere in Britain, perhaps in many places in Britain, there are junior hospital doctors who are performing important, intricate, even dangerous work when they are, frankly, in a state of exhaustion. If that is the case then it is something which, frankly, should not be allowed to continue—the noble Lord's Bill or otherwise. It is something which could be dealt with in other ways and, indeed something which perhaps ought to be dealt with in other ways.
But having said that, I must also look at the reality of the picture as I see it. While I do know as a matter of my own personal observation that there are junior hospital doctors working very, very long hours indeed, and doing real work, I also know as matter of personal observation that there are many junior hospital doctors who, frankly, are doing very little real work at all. I must go further and say that I am also aware of many junior hospital doctors who are working quite long hours and doing a lot of work, but work which, with respect, is often totally wasted, because it is duplicated and repeated by others.
What I am trying to suggest is that one of the main problems with which we are faced is the uneven pattern of hospital staffing and, if I may say so, sometimes, and in some parts of Britain, quite luxurious overstaffing of certain teaching hospitals while certain other outlying hospitals in the regions are desperately under-staffed. Moreover, in those areas junior hospital doctors are often carrying very, very heavy burdens indeed. What we are to do in the end to make sure that we attract sufficient doctors to posts in certain of those outlying hospitals in the regions, I really do not know, but I think possibly we may have to consider some kinds of inducement to doctors to work in what might be called "less favoured areas" or in the kind of areas in which they are not automatically recruited.
The teaching hospitals undoubtedly have a basic inbuilt advantage in that a post within one's teaching hospital is often regarded as a necessary prerequisite or preliminary to a later successful career as a consultant. Therefore, those posts are sought after irrespective of the inducement so far as the work is concerned or the remuneration or other matters. Indeed, I think it is right to say that at the moment, just as in the days past when the elderly doctors to whom the noble Lord referred were themselves junior hospital doctors, the principal inducements to young doctors to take certain posts are a consideration of the kind of experience they will gain, the kind of teaching they will receive and the degree of responsibility that they will be allowed to exercise. It is only by exercising responsibility that one really learns. It is those kinds of inducement which, I think, recruit doctors to certain posts. In a sense that is saying that this is not an area in which one can leave recruitment wholly to what is usually called "market forces". The market forces are somewhat different in this particular field, and the result is that certain areas are left perhaps impoverished in so far as filling vacancies and being adequately staffed is concerned.
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So one of the main problems here is not the total number of junior hospital doctors, but the way in which they are distributed throughout our hospitals. That is something which I think ought to be looked at, and looked at fairly urgently. But I see some danger signals on the horizon, and on these matters perhaps the noble Lord the Minister will be able to comment as we proceed.
As I understand it, the Government have already announced that there is to be an increase—a welcome increase—in the number of consultant posts. But I also think that it is true that the Government have announced that while that increase in the total number of consultant posts is being brought about, there is also to be a moratorium on the establishment of new junior hospital posts. I am bound to say that it seems to me very, very difficult indeed to talk about cutting working hours while one is, at the same time, operating a moratorium on the creation of new posts. I do not think that the one can go on without the other.
Another difficulty which I see at present is that, as I understand—and I am informed that this is a matter about which the noble Lord, Lord Richardson, perhaps may have more knowledge and may comment later when he comes to speak—there is at the moment, or has been, a reduction in the number of pre-registration posts. Noble Lords will remember that pre-registration posts are resident hospital posts as house surgeons or house physicians which young, newly-qualified doctors are required to do before they are finally liberated as free to practise without restraints.
There was a certain amount of cynicism in days gone by about the establishment of the pre-registration posts. I qualified in the very early days of the war, at a time when the teaching hospitals were paying house surgeons almost nothing and working them very, very long hours indeed, but recruiting those doctors because they felt they needed to be there in order to be close to the professor and close to future advancement. But once the war came and people were not quite sure what kind of advancement it was going to be—it might in many cases be advancement into the grave, as so it proved with some of my colleagues—doctors started thinking about their own personal prosperity and comfort, and they sought jobs not in the teaching hospitals but out in the municipal hospitals, in which perhaps they got more experience and more responsibility, but in which they were being paid a great deal more money.
I still have in my possession three letters written by the Dean of Clinical Studies at one of our teaching hospitals to the medical superintendents in three municipal hospitals who were then paying quite reasonable salaries, as things were, to junior house surgeons and house physicians, whereas the teaching hospitals were paying almost nothing—I think it was 10s. 4d. per week. This letter from the Dean of Clinical Studies pointed out to the medical superintendents of these three municipal hospitals that the teaching hospital was having great difficulty during those early wartime years in recruiting surgeons, and then went on to suggest that it would be helpful if the municipal hospitals reduced the rates of pay to their house surgeons. In other words, that was perhaps the way to feed people back towards the teaching

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hospital. That matter was exposed and did not get very much further.
But when the pre-registration posts were introduced at a later period—and I should say at the outset that no doctor in his right mind would stand up and seriously say that a newly qualified doctor, having passed all his exams, ought to be totally free to practise outside, alone, unfettered without, first, having had a reasonable range of hospital experience in resident posts; and I fully accept that principle—so that it was compulsory for doctors to do these posts before they could be regarded as fully and finally qualified and registered by the General Medical Council (about which the noble Lord, Lord Richardson, knows so much), there was the feeling that this was the creation of a kind of slave labour because it was, in fact, the creation of posts which it was compulsory for people to take.
With regard to pre-registration posts, once you have those posts—which really are work—which doctors are required to do before they are finally registered (so they are in a sense compulsory), as an employer you then, clearly have a very important duty with regard to the safeguarding of working conditions and rates of remuneration. You are in a totally different area, in which market forces of no kind exist or apply at all.
However, I am told that at the moment, despite the fact that we now have an increased intake, or at least an increased output from our medical schools of more newly qualified doctors, there is, in fact, a reduction in the pre-registration posts, so it is becoming difficult for some of these doctors to get the pre-registration posts which they need for final registration.
There is another point of difficulty with regard to the precise terms of the noble Lord's Bill, or at least with regard to doing something about this here and now. I refer a little more to the patients' point of view. I have talked to patients on this particular issue, and on this issue of patients being treated by doctors who are, frankly, exhausted. It is a fact that a patient in a hospital not for a prolonged stay but for a stay of a fortnight or three weeks, or whatever, for an operation or for whatever else it might be, develops a relatively close relationship on an almost daily basis with the house surgeon, the house physician, or perhaps the junior registrar, or perhaps even the senior registrar. They get to know him or her quite well. They arrive at a situation in which they feel free to talk and to understand. The patients arrive at an even more important situation in which they genuinely believe that the doctor generally and fully understands all their anxieties, and there is a total understanding between them and the doctor.
Once one has regulation of working hours by statute in the kind of way envisaged by the noble Lord, the difficulty is that one then has the immediate problems which arise from the hand-over situation, as between one doctor going off duty and another taking over. When one talks to patients, as I have, they tend to say that they would rather have a very tired doctor whom they know very well, to whom they can talk and who they know understands their position, than another doctor who is totally fresh and rested, but who they
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have never seen before at all during their hospital period.
When we are considering changes of the kind that the noble Lord envisages—and many of these changes are necessary—I think that we must go on to consider the importance of continuity of care on a daily and continuing basis for the patients in hospital—care, not only by the nurses, but by the junior hospital doctors whose relationship with the patient is so much closer than is the relationship of, perhaps, the consultant who has overall clinical responsibility for the case.
Finally, the noble Lord has pointed to the fact that speaking in this debate are many elderly doctors. As we look back to our days as house surgeons or house physicians, I think that we can all say: "Yes, we worked very long hours. We were glad to work very long hours. There were all sorts of reasons why we worked very long hours. "Confidentially, we might be prepared to admit that some of the work that we did during those very long hours was not quite so exhausting or arduous as one might think. Sometimes we were playing bridge and doing other things while we were on call. It is also true that we were paid very little. But all of us in my age group, and that of other noble Lords here who are medically qualified, must guard against the tendency to feel that because we went through it in that kind of way, others must do the same now.
Frankly, it is that kind of attitude which kept the nursing profession in thraldom, and for so very long. Embittered ward sisters of the past, who had been ground into the dust by their seniors when they were nurses in training, tended, when they became sisters themselves, to say why should not their probationers go through it as well. Fortunately, nursing has grown out of that restrictive phase, perhaps because of the presence at long last in the nursing profession of a sufficient number of male nurses who take a different kind of attitude. But the result is that nursing has changed with the times. So must medicine change with the times. I think that elderly and conservative-minded doctors must be prepared to forget about their years of dedication in house posts years and years ago, and realise that we cannot now allow to continue a situation in which individual junior doctors are required to do dangerous and important work while they are in a state of exhaustion. That is something which should not go on.
How we deal with it, I am not quite so sure. I am not entirely sure of the noble Lord's intention with regard to his Bill. If he wishes to press it, I should not oppose it; but I think that I would want to look at it very carefully in Committee. I do not believe that it is wholly right to try to bring the philosophy or the machinery of the shop floor into medical practice and deal with matters of this kind by statute. I think it is right that they should be mentioned, but I think that they can probably be dealt with in other ways.
I hope that in his reply to this debate—this very important debate that we will have had by then—the Minister will be able to tell us what the Government are actually doing now—not on 1st January 1991—in order to safeguard the interests of patients, which is the overriding consideration, and also to safeguard the interests of some of the doctors who are working too hard; at the same time recognising that while

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there are some junior hospital doctors who are doing very little work, there are others who are having their work wasted; and that the real need is to look to the overall staffing of our hospitals and to ensure that it is ironed out and evened out, rather than that we persist with the kind of disparities which we have at the moment as between certain teaching hospitals and certain other outlying hospitals in the regions.
7.9 p.m.
Lord Hunter of Newington: My Lords, I too should like to pay tribute to the noble Lord, Lord WellsPestell, for his concern for the medical profession, and also to pay tribute to what he has done for that profession in a number of ways in the past.
Junior doctors contract for a basic 40-hour week. Thereafter they contract for a stand-by, or on-call, duty in blocks of four hours, called units of medical time. They are paid at 30 per cent. (that is, A units of medical time) or 10 per cent. (B units of medical time) of the basic rates depending broadly on whether the doctor is required to be in hospital, immediately available, or at home, but still on call. The rates of pay for UMTs are set out according to the recommendations made by the Independent Review Body on Doctors' and Dentists' Remuneration. I understand that they are looking closely at the overall remuneration in their current review, which is due in April, and have undertaken a survey of juniors' hours of help.
Between 1949 and 1969 the population of this country increased from 43·8 million to 48·8 million. The number of general practitioners fell during that period; the number of consultants doubled; the number of junior hospital staff was increased four-fold. I am sure that there have been considerable further increases since. It is disturbing to find that after this substantial increase junior doctors are still contracted to work 80 to 100 hours, and the majority—and may I quote the requirement—are,
"required to be physically present or on standby in the hospital available for work as urgently as the situation requires".
That is the requirement for the A standby; they must be ready to go in the hospital.
In the beginning of this new method of payment about six years ago it was estimated that perhaps 40 per cent. of overtime would be required for these A units of medical time, and 60 per cent. would be required to pay for doctors from outside the hospital but on call and,
"for telephone advice, consultation, and occasional non-urgent calls".
That is the background to the situation. But of course the formula for calculation (which is boring but it is necessary to understand it) which young doctors are advised about—not by the Government—is that there are 168 hours in the week, and that that divides into 42 four-hour units. The doctor then is advised to subtract 10 standard units from this, leaving 32. Then he divides that number on the rota with the number of other doctors in his category. Therefore, there is very little flexibility in the staffing, and flexibility is not mentioned.
He gets additional payments for study leave, what is called continuity of patient care, teaching and research, and administrative duties. This was a sincere attempt, I believe, at the time to get a work-sensitive contract
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for junior doctors. But of course, as has been said, to give one example, there are in the medical specialties at the present time 10,156 basic units in England, and the A plus B—the additional payments—of 12,713. Of these, 99·4 per cent. are A units. In other words, the doctors are apparently on near-emergency call. This is a situation to which I should like to refer again.
Taking from the noble Lord's Bill the proposal that by 1983 doctors should work for 60 hours, I have done a little arithmetic on the possible consequences, assuming that the duties required are the same as at the present time. The result would be that we should require 120 additional staff in the medical specialties. One can see that if we extend that to all medical staff we should be thinking in terms of new medical schools and new teaching hospitals, and things of that kind. Therefore, some other solution has to be found.
How does this system work? One rather extraordinary effect of it is that senior registrars often get paid more than the basic consultant salary. I do not know what work studies have been done to determine the staffing of different types of unit, but I would support what has been said that the different types of unit require to be examined. For units such as dermatology and neurology, for example, in the period in 1980 to which I referred for the UTMs, in dermatology there were just over 2,000 basic units and 2,500 A and B units; 61 per cent. of them where the doctor was on urgent call.
There must be many ways of covering a dermatology department. It could be done by an experienced senior registrar in general medicine. He could surely stand in for the almost unheard-of emergency. But then of course the problem arises, because, if you do not give them reasonable remuneration, you will have difficulty in recruiting dermatologists. The matter is serious and the profession must co-operate fully in finding a means of using and spending these resources better. What is required is an urgent investigation into flexible rostering. I believe that it is possible—and I agree with the noble Lord, Lord Wells-Pestell—to get an average of 80 hours a week by doing this. I understand that it is the profession's view that it could be brought about by changes in patterns of working and full co-operation between different categories of staff concerned.
It is a tragedy that junior doctors are paid in the way that they are, but the experience of the last six years suggests to me at least that all junior doctors should be employed for something in the region of 60 hours, and that the additional payments over and above that should be very exceptional or only for those who are on the most urgent duties.
7.17 p.m.
Lord Perry of Walton: My Lords, I am perfectly sure—we must all be perfectly sure—that this Bill has been actuated by the purest of motives. The need to avoid patients being treated by over-tired doctors and the need to safeguard the health of doctors are admirable motives for any Bill. The dilemma is that the two problems are not new, and that they are not amenable to legislation. To attempt to legislate is asking for trouble.
Almost all the points I would wish to make have been made already. I shall be extremely brief. The

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only way to solve the problem is to have enough staff to carry out the job properly, or to have a better distribution of staff, as has been mentioned already. I was a junior hospital doctor many years ago during the war. At that time the problem was even more acute than it is now, because of the temporary war difficulties.
One of the things that existed then and that has been lost in the National Health Service was that there was in fact some one person in charge who could handle the situation, and whose word was law. There seems to be no one in charge of our hospitals at all now except committees. I do not think that they do the job very well. The second point I want to make which has already been made is that "on call" can mean lots of different things. It is only some doctors, some of the time, who are tired by being on call.
The third point I want to make has also been made. It is that if you had only 35 hours of work per week you would require five doctors for any one ward, and that would provide very little continuity of care. While sympathising with all the reasons for bringing forward this Bill, we ought to not accept it. This is not something that we can legislate for. We must hope that the profession, as has been mentioned, will take reasonable steps itself in response to the noise that we make about the problem, rather than the laws we make about it.
7.20 p.m.
Lord Molloy: My Lords, I am conscious of the distinguished noble Lords who have spoken and will speak in this debate, men who have made a massive contribution both to the National Health Service and the whole field of medicine. I pay tribute to my noble friend Lord Wells-Pestell and, unlike the noble Lord, Lord Perry of Walton, I believe he has brought to the attention of the House tonight a matter of vital importance to many people who are not doctors, consultants or registrars. Ordinary people know what terrible anguish and grief can be exacerbated if it is thought that the loss of a loved-one has occurred because someone has been over-tired, over-worked or has not been in tip-top form.
Therefore, I say with great respect to all the distinguished people concerned with medicine that this issue is not the prerogative of consultants, registrars and the whole range of medicine; it involves every soul in this land of ours. That was behind the great dream of Aneurin Bevan when he created the National Health Service, a service which needs our every consideration, especially these days when billions of pounds are spent on weapons of death in all sorts of Christian and non-Christian countries. When we in this country created the National Health Service, we put on the statute book the finest picee of legislation ever witnessed not only in the history of our nation but in that of any other, and great successors of Aneurin Bevan have given of their utmost to improve it.
Having said that, it is clear that the NHS still has its weaknesses, one of which has been revealed tonight by my noble friend Lord Wells-Pestell. Let me make it clear that I have no connection with any of the great professions in the NHS, except that I have been involved with, and still am concerned in, the Confederation of
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Health Service Employees, the activities of which range right the way through the service, including doctors and consultants down to nurses, SRNs, state certified midwives, ambulancemen, student nurses, ancillary staffs—in short, the whole structure of hospital administration in Britain—and it is against that background that perhaps I too have a small contribution to make.
My noble friend Lord Wells-Pestell said that no doubt there would have to be a cost involved in putting into practice his proposals in the Bill. That may be so, but I suggest to him in the friendliest possible way, and to the House, that a cost is already being paid: every time a junior doctor is over-worked and someone's pain is prolonged or a return to health is delayed, that is a cost being paid, and we cannot wait to arrive at the frontiers of understanding only when our own soul is smitten with grief; in other words, when it is us or someone close to us who is suffering. Then we want the mountains moved and any inadequacies of government removed. In this case we cannot wait till then. There are savings to be made now, and that is one of them. There are also savings to be made in relieving the strain on anyone connected with medicine, from the raw recruit nurse right up to the consultant. These people are, and must be, devoted men and women and it must be a crime if we permit that sort of devotion to a noble profession to suffer unnecessarily.
It has been my experience from talking to a range of junior doctors that they feel unhappy about the present situation. Sometimes they must go home with the niggling thought that perhaps they have not given of their best. Would be it that all other professions were as conscientious as those who work in this noble profession. It has been submitted to me, for example, that even the work associated with the administration of drugs has changed dramatically in the past 20 years; the junior doctor has to be on his toes at all times because the tiniest slip can mean disaster. A slip on the part of a bricklayer, engineer or motor mechanic can be despairing, but in this profession an error can have the most bitter effects.
For those reasons we have every right, wherever we see a possibility of removing an element of risk, to do so. That is why, unlike the noble Lord, Lord Perry, I believe my noble friend has pointed the way for us to follow. After all, it can sometimes happen in the work of a hospital doctor that a patient with whom he has a close relationship—the noble Lord, Lord Winstanley, mentioned this—can arrive at a particular crisis and then, within the heart of the young doctor, there is a crisis because he knows he is suffering the effects of overwork. Thus, all factors must be taken into consideration.
It seems almost a paradox to have to talk in this way, and it may be that the Safety at Work Act, now the law of the land, should look very closely at the way in which some of our hospitals are administered. Let us remember that the tiredness and strain that goes on in a hospital sometimes goes right through an entire staff shift, affecting not only the junior doctor but nurses, sisters and staff nurses; they may all be aware that the doctor in charge "is not up to it tonight" in that he is not fully in charge. Conversely, the junior doctor may know that his assistant staff nurse—and remember, we are talking about very important people, particularly when the results of the genius of our

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doctors often depends on the equal ability of our nurses to nurse—is under added strain, and anything of that sort can mean an increase in risk.
My noble friend also mentioned the strain in the private life of junior doctors, and of course that too can have a great effect. He gave the example of a junior doctor who was involved in an accident, and unfortunately in the case he cited there was loss of life in a motor-car accident. That was an extreme case, but how many other cases are there in between, even those involving unhappiness at home? One sees some of that as one moves among those working in this noble profession. As a parliamentary assistant—not an adviser, although perhaps as an adviser in terms of legislation—to the great Confederation of Health Service Employees, one becomes acquainted with matters of that kind. They may not even be on the periphery of medicine, but they are bound to be related; and I believe that if the strain of the job is carried into the home, we have a responsibility to remove it. If we do not, our National Health Service will be stained by administrative insouciance.
I regret to say that it has always been stained by meanness. Since its inception, Governments have never given it all that it should have, and to a degree the nation, through Parliament, has taken advantage of the great medical profession, its loyalty and its devotion. We should take whatever opportunity there is to remove some of the things that irritate people in this great profession, whether they be nurses, doctors, even administrators or ancillary staff, and of course the junior doctors, who can make the most fatal error of all. If our National Health Service is still a golden achievement in the field of medicine, for the world to witness, we cannot allow in that great service any element of risk that we can administratively remove.
But there is another point that we must examine. In this new age of technology we are moving very rapidly towards a situation where a junior doctor will have to be part mechanic, part scientist, as well as a doctor. So, paradoxically, the risk through tiredness will increase, because of the new technology. These points must be looked at, bearing in mind that perhaps not so many young people will be going to university to read medicine, unless the policy relating to that is reversed. There will be fewer people entering the medical profession, fewer junior doctors, and ergo there will be more possibility of strain.
I hope that your Lordships will approve of the Bill presented by my noble friend. I hope, too, that we can make our contribution to removing strain from the junior doctors, which would also remove strain from nurses and ancillary staff, because they are all inter-linked. It would also remove apprehensiveness from those people who are ill and their relatives. If we can do that, we shall make a valid contribution to this great service. If we can do that by means of the initiative of my noble friend Lord Wells-Pestell in presenting the Bill to us, we shall make a contribution not only to the junior doctors but to the entire health service, thereby providing an even finer, better service for all the people of our nation.
7.33 p.m.
Lord Richardson: My Lords, I cannot avoid a feeling of sadness over the fact that the noble Lord, Lord
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Wells-Pestell, said that he was slightly hurt because he did not know about the conference that took place last Friday. So many of us—the noble Lord, Lord Hunter of Newington, referred to this—have many reasons to be grateful to him for what he has done for the medical profession. Thus each one of us feels—I certainly feel—that we might well have pointed out to the noble Lord what was announced in the British Medical Journal before Christmas; namely, that on the initiative of the CMO at the Department of Health there was to be this conference, and within our profession it has been widely known that it was to take place.
It was a closed, private conference, but statements that could be announced publicly were agreed, and the noble Lord the Minister will tell us about that, if he so chooses. But I am most reputably informed —and this is remarkable—that it was agreed by all the doctors there, whatever their rank and whatever their particular interest, that some limitation in hours of work for junior staff should be implemented as swiftly as possible. It was also agreed that the so-called one-in-two—that means 24 hours on the whole time, a day's work, then a night in bed, and then starting again—should be phased out immediately, with a one-in-three system being introduced very shortly, and that the objective should be one-in-four. So there was achieved a unanimity of purpose.
The noble Lord, Lord Wells-Pestell, pointed out that there were no junior doctors in this House. I am afraid that I could not convince your Lordships if I posed as one, even for the purpose of advocacy, but I have with me a letter, which I received this morning, from the chairman of the Hospital Junior Staff Committee of the British Medical Association, a body that was, of course, much concerned with, and highly active at, the recent conference.
At the beginning of his speech, the noble Lord, Lord Wells-Pestell, said that, had he known about the conference, he might not have brought the Bill before us in the form that he has done. He then went on to speak most valuably, so I felt, about the importance of looking at the whole problem of the junior hospital doctors' work, their working hours and circumstances. In other words, there were two aspects: first, the numerical one contained in the Bill; and the other, the wider considerations of the problems and the needs of the junior hospital doctors.
I can, at any rate, speak for the particular body that represents the junior hospital doctors of the British Medical Association, and which is an autonomous body within the association. They say that there is general support throughout the whole of the medical profession to reduce the hours worked by junior doctors to a reasonable level. They go on to say that a maximum of 80 hours a week is what they feel is a reasonable level, taking into account (as we have heard this evening) the question of on-call time.
They then go on to talk about a large-scale reduction in hours, and they come to a point about which I wish to speak principally; namely, the training of junior doctors. They say:
"The large-scale reduction in hours proposed in the Bill would eliminate all the training content from juniors' posts.…"
That is probably true. If it should come about, it would be very serious indeed; it would have enormous implications for the whole of the medical profession,

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the health service and the public. The Hospital Junior Staff Committee goes on to say:
"They do not believe that the current problem can be resolved by legislation at the present time although legislation may be required if satisfactory progress cannot be made in discussions with the DHSS".
We all agree that prolonged hours of duty and strain are dangerous and undesirable. After nearly 50 years in hospitals, having worked with almost 200 junior staff who were directly responsible to me, I cannot go all the way with the noble Lord, Lord Molloy, in the awful pictures that he drew, though I found much of interest in many of the points that he made about the things that nowadays contribute to the strain of being a junior doctor. If I may say so, he made a very good point when he said that increasing technology, the increasing application of science, adds to, rather than detracts from, the mental effort and perhaps the necessity for physical dexterity among junior doctors. Certainly his point about drugs was extremely important—something with which my generation, at our beginnings, was hardly concerned.
Again, mention was made of nursing staff. The junior doctors make the interesting remark (which is slightly contrary to how it was put in this debate this evening) that because of the rota of times that nurses now follow, and the reduction in their hours and the alteration in their structure following the Salmon Report, they cannot rely in the same way on wards always having a senior nurse experienced and well-trained, as was the case when I was a young man. I have always maintained that only two women have in fact made me run—I am a lazy man. One, of course, is my wife and the other was my ward sister. If she rang me and said, "Dr. Richardson, such-and-such a patient is very ill", I ran.
My Lords, we agree, then, that something should be done. But I want to come to the real purpose of the lives of these junior doctors. Their real purpose is to convert their long years of academic training, teaching and learning, into practical activities. The junior doctors cannot be lumped together when we are thinking about their hours of work and their type of work, because there exist different levels. There is the pre-registration house job, to which the noble Lord, Lord Winstanley, referred. I greatly hope that there is no shortfall of pre-registration posts. At one time it looked as if there might be a danger of that, and it was averted without very great trouble. It would be an appalling scandal, and quite intolerable, if it were to happen, because unless these people can do their pre-registration job they cannot pass on to full registration and the privileges that follow from it.
I must not be too wordy, my Lords, but to these young men and young women, in the first year of their experience, when they are really feeling their power and the possibilities of their profession, the hours that they work are less important than the experience that they get. I have no doubt at all that most of them feel—in fact, some of them have actually said this to me-" If my job is duplicated with another, with two doing the work that I am doing, it will be so much less a good job that I would not like to recommend it to my friends". They need the experience. As they go up the ladder various other factors enter into their training, such as
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clinical research work, more basic research work, work in intensive care, the follow-up of patients, the follow-up of patients in hours which are socially acceptable to the patient but may be socially difficult for the doctor. All these times that they have to work, and the varying periods for which they may be working—and research is, indeed, work—are really not susceptible to any rigid limitation of time, any more than is the practice of medicine itself.
My Lords, doctors do work long hours. They expect, and should expect, to work long hours. This does not mean that I am going back for one moment on my belief that round about 80 hours, give or take, is the correct number for the junior doctors, and within that sort of timing they ought to be able to fit in the requirements of the different levels. I agree with the idea that a great contribution could be made by organisation, by putting aside the rigid concept of "my" house physician; "He sees 'my' patients, he does not see anybody else's", and so on. This could contribute quite considerably to leading to intelligent and workable rosters that could give these young men and women their proper training and their proper experience and, at the same time, not exhaust them.
I feel that by initiating this debate the noble Lord has done a great deal of good, because your Lordships may be able to urge forward the process of reducing the hours of work of the juniors, which may lead to an examination—and the noble Lord, Lord Hunter of Newington, hinted at this—of the contracts that these young men and women hold. In some instances noble Lords would be very surprised at the type of discipline that is said to be standing, straining to rush off to see an emergency—the type of discipline that has probably never seen an emergency since being a student, with somebody else demonstrating it. These things need looking at; and their type of work needs looking at. It is so different. Dermatology has been mentioned—a very good example—between specialties.
So I feel that one of the purposes of the noble Lord, Lord Wells-Pestell, has been most amply served by this evening's debate, but I also feel that the junior hospital staff were absolutely right when, on January 19th of this year, they issued this statement:
"The Hospital Junior Staff Committee is opposed to any legislation seeking to reduce the hours of work of junior doctors at the present time".
I hope your Lordships will agree with them.
7.47 p.m.
Lord Davies of Leek: My Lords, we have had an interesting debate, and undoubtedly we have had the privilege of listening to people who know what they are talking about in this area of social work and social legislation. The House will be glad to hear that I do not intend to talk for very many minutes. Nevertheless, there are some caveats that I should like to enter. I do not know whether my noble friend is going to push this Second Reading to a Division, but first of all I want to pay a tribute to him for the years and years of work that he has given to social medicine, to hospitalisation and to social welfare. Not knowing how many people were going to speak on this, and being a layman in this direction, nevertheless as soon as I saw that my noble friend was moving this I was willing to come in and support him.

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I also then read in the Guardian, and listened at the weekend, about the changes that have been made. But because I have been privileged to listen to practising medicos who have worked in hospitals for many years I understand better now what that message meant. Nevertheless, despite the privacy, I think my noble friend Lord Wells-Pestell would have been entitled to some direct line to him to let him know exactly what was going on; and the Minister said when he interrupted that an explanation will be made.
Having said that, what are my caveats? A rolling rate of change is happening not only in the medical profession: it is happening in engineering, in micro-technology and in my own profession of teaching. There were people in my profession who were not as dedicated as they may have been, and there may be people in medicine who are not so dedicated. But whatever we may think about it, the overall thing in this change is that now we have something that Aneurin Bevan did not envisage. We have the growth of private hospitals side by side with the National Health system, of which I am very proud. It was one of my great moments, at Princetown University some years ago, to talk about the growth of our National Health system when America was having her great debates. I know that many Americans came over and they had free operations. I remember one American lady in tears of gratitude at my own home when, having been struck down by appendicitis she was operated upon freely, when in Chicago it would have cost that lady a small fortune.
We are now looking at two echelons of medicine. Private medicine is developing. I do not want to pass any party remarks about it now, but I want to ask whether regulations apply to private entry into medicine as well as into the National Health Service. What would happen to the legislation if we make legislation? Would we be better off if we took note of what we have just heard? Apparently, the junior medical men have said, "Look, we don't want masses of legislation about this". I have spoken to one or two hospitals about the different centres of administration that have been set up. I much regret the change that was made in the administration of the hospitals some years ago; and many of our specialist consultants and general doctors were looked upon as leaders in the chain of responsibility. From the lower echelons to the higher, they were spending and wasting much of their time on committees discussing, sometimes aridly, administration. That we want to avoid. Over-administration is one of the things which is ruining much of Britain's initiative at the present time. My first question therefore is this. Would the same controls activate in the private hospitals as in the National Health Hospitals or the public hospitals, or would the private zones have the right to be free from any controls at all? Would that be the situation?
There are two other points. The point is well made that in, say, engineering and in anything in which people desire to achieve success, application is essential. Long hours of work, if it does not upset the health, is part of that dedication of learning a job. To get into one's own being. The whole gamut of the profession in which one is entering means dedication. At one time, when somebody took up medicine, it was considered a calling—just as in teaching and on the religious side.
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You cannot make medicine and you cannot make teaching the same as a day-to-day job. People who enter it must have some drive and some desire. With some levity, may I say that I regret sometimes overworking among those junior hospital doctors who have been privileged to play Rugby for my own country. I do not want them to be kept too busy on the days when we are playing against France, Scotland, or England at Twickenham. I should like to see flexibility there. I am prepared to recognise that, because of the profession, the regulations should be made inside their profession itself.
My Lords, I would wish to pay tribute to the nursing profession. To the nursing profession, the young junior doctor also owes a great deal. I myself unluckily—although I seem to be healthy enough now—have been in hospital many times, sometimes through accidents and sometimes through thinking I was stronger than I was. At those times, I was grateful for the attention I had night and day on special occasions by the junior doctors and to see how well the nurse in charge helped the doctor. This is the opportunity for the reassessment of the whole of the services of the junior doctors to medicine. I think the debate tonight has been worthwhile.
7.55 p.m.
Lord Hill of Luton: My Lords, we are all grateful to the noble Lord, Lord Wells-Pestell, for provoking the very useful discussion that we have had today. I am particularly grateful to him for having provoked that superb speech from the noble Lord, Lord Richardson, which brought to us a wealth of experience and judgment and so raised the level of the debate.
I am going to limit my remarks to two points. I know that it is said that yesterday can teach us nothing. I took my first house job rather more than 55 years ago. We were not paid, we competed strongly for those appointments, we wanted them for the completion of our education, for the responsibility it brought us. For most weeks of that time, we were on duty, if by "duty "one means hours worked and hours waiting on call, I suppose, for 168 hours a week. We rarely went out and when we did so we arranged with a colleague to stand in for us. We enjoyed it enormously. We felt that it was essential to our professional life. It was also the centre of a very lively enjoyable, professional, community.
I do not remember, I confess, being dog-tired. It may be that one remembers only the more pleasant things and forgets the nights of exhaustion. I do not believe that for a moment; they were great days and when we finished one job we put down our names for another. I would not have it believed that to be on duty for 24 hours is as destroying as it sounds. We worked hard on duty, we played cards, we played billiards, we read, we worked, we even occasionally went to a neighbouring hostelry, having arranged with the porter to call us if we were needed. Do not let the picture of the past be forgotten even though it is now defined as the bad old days. I doubt whether the young house officers—and I am speaking only of the house officers and not of the higher grades covered by this Bill—are very different from those days. Nevertheless, the world is different. We accept that there is a problem whether we like it or not. It is no good

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quoting 50 years ago in an attempt to pretend it is not here.
My second point is that I do not think this Bill is workable. Its objective—and I know that it has to be approached by stages—is 35 hours a week, working and waiting to work. I do not know what the proportions would be; but the total is 35 hours a week including 10 hours for refreshment. That is what the Bill says. What possible use is 25 hours a week in the educative process? How many changes of doctor does it involve for the individual patients? It seems to me that, however hard we try to solve this problem, it is not by legislation that the solution will be found.
It contains some absurdities when one examines the figures involved. What happens at the end of the 25 hours? Mind you, there is an exemption clause. If there is a state of emergency proclaimed by Her Majesty, then all bets are off and hours limitations go. If there is a major accident procedure or its equivalent being put into operation—I am not certain what that is, but it does not cover an outbreak of infectious disease —what is the young medical officer of the infectious diseases hospital to do when his limit has been reached? What is a hospital to do?
My mind goes back to my first house job as house physician to the children's department of a teaching hospital. In those days—thank God not now—every summer brought a great wave of children, babies, suffering from what is politely called D and V—a killing disease demanding immediate treatment to replace lost fluids. What was one to do having reached the limit of the day, to throw down the work and go? I am sorry, but this is inconsistent with proper care of patients.
Therefore, I say, though there is a problem to be solved—and some progress is being made, as the noble Lord, Lord Richardson, told us—for Heaven's sake do not let us pretend to solve it by legislative clauses that name hours of work. In other words, when you must stop and give up. That means great discontinuity of treatment for patients. I am afraid that his way of doing it has all the properties of a nightmare. I accept the arguments for the existence of a problem; I do not feel competent to express a view as to the size of the problem for my contract with hospitals has hardly existed for almost 50 years. But I know that to try to solve this kind of problem involving patients by legislation, by Act of Parliament, is a nonsense.
We are grateful to the noble Lord, Lord WellsPestell, for introducing the subject and usefully opening up this discussion; but do not let us believe for one moment that by passing an Act of Parliament we can solve a complicated problem of this kind. It is a problem which involves human beings, patients and doctors, in circumstances which would need to have that degree of elasticity that would permit the best medical service to be rendered and not a reference to an Act of Parliament to see whether you have reached your 25 hours or other limit, whatever it may be.
8.3 p.m.
Lord Porritt: My Lords, like my noble friend Lord Richardson, I feel I must declare an interest, in that I speak to you as an ex-junior hospital doctor—very
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"ex" I admit—but rather like my noble friend Lord Hill with still a very keen remembrance of those days. And how good they were! If they were that good—or bad as you may think today—it is rather extraordinary that here are we three still standing up despite the life that we lived as junior hospital doctors all that time ago. It perhaps speaks a little for the old régime.
I will deliberately refrain from any comparison between the junior hospital staff—very definitely overworked in pre-NHS days—and the junior hospital staff of today, apparently still overworked. I do not think that it would achieve anything at this moment, although I believe that the comparison would raise some very fascinating questions about the practical and cost-efficient care of patients. I think the comparison would still be worth making. It might be conducive to a pretty radical rethink of methods of achieving what we have been talking about so much: maximum patient care.
I too should like to thank my noble friend Lord Wells-Pestell because—I will be frank—he has opened up this extremely interesting discussion much more than I expected. I was very disappointed when I saw the form of this Bill. I hoped that I should be able to support it, but when I saw its shape I realised that I could not possibly do so. This did not mean that we did not all agree with the principle behind it all, the principle of improved patient care, and the Bill as it stands—and I agree with my noble friend Lord Hill that it is impracticable and I do not think can possibly go much further—has opened up an extremely interesting periphery and vista.
There are so many sidelines connected with this problem that it merits very long and detailed consideration. There are certain aspects, most of which have been mentioned, which appeal to me enormously, one of which the noble Lord, Lord Richardson, mentioned but did not go into. That is the education side of the matter. If we cut down the working hours of these young men to the bone, not only will they have no time to give continued service to patients, but they will certainly have no time to learn, to be taught, to be trained and to get experience. Those are vital parts of a doctor's activities at that stage in his life.
That is one point that I should like to stress. Another is this. It is a waste of time to consider the Bill as it stands. My noble friend Lord Hill has already given your Lordships a little mathematics and it seems quite ridiculous that a doctor will get full pay—whatever the pay is—for doing half a day's work. That is what it boils down to. If we fulfil this scheme, we will have to treble our junior hospital staff to keep going with these reduced hours. That would be so even if we doubled our consultants, which the DHSS has apparently rather vaguely suggested might happen at the end of the 1980s. We should still need twice as many junior hospital officers as we have now.
Who is going to pay for that? At the present moment, the personnel side of the NHS costs considerably more than the whole of the cost of the rest of the service put together. If you are going to put up that personnel bill by hundreds of new hospital doctors and consultants, you are going to increase that bill to an impossible extent. That is why I do not think that the Bill as it stands is practicable. We have been

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very lucky and we ought to thank the noble Lord, Lord Wells-Pestell, for opening up this discussion. I hope that it is not finished by a long way.
We have heard of the most fascinating discussion at the DHSS between the young doctors themselves and their committee at the BMA, and the practical results that appear to have come out. I hope that we shall hear a little more shortly. This is the way in which this problem should be tackled, by mutual agreement. It is not 35 hours: they are talking round a figure of 80 hours. That is practical. Something could be managed around that figure, but certainly not around 60, 40 or 35 hours. That is just not on from a practical point of view. I hope that this get-together between the department and the junior doctors will continue and will produce results.
It has been thought that, if we are to get better service and not work our young doctors so much, we ought to work the consultants more. That is an interesting thought. There is no reason why the consultants should not work more if they have time to do so. But, is it not a terrific waste of time for a highly trained and a specialised consultant to do routine work? That is not his job. He is wasted if he does that. He is there to train his juniors—and juniors go up to quite a senior level, I can tell your Lordships. He is there to be the leader, to be the teacher and to do the bigger work. To bring him in to do routine work in the wards is not good medicine.
The other point which my noble friend Lord Hill so rightly brought up is that the junior doctor must be given a little sense of competitiveness; a little incentive. He must be pushed to some extent to get the best out of him and, equally, to do the best for him. That is why I think the number of junior hospital staff must be such that it does not automatically open up the higher ranks. He must have to work for his promotion and he must feel competitive with his contemporaries. So, while I cannot in any sense support this Bill as such, I very much wish to join those who have thanked the noble Lord, Lord WellsPestell, for initiating this debate, whatever happens to his Bill, because I believe and hope that this will lead to much greater things on a much wider scale inside the NHS.
8.11 p.m.
Baroness Stewart of Alvechurch: My Lords, as a former chairman of governors at a London teaching hospital, I welcome the opportunity my noble friend's Bill has given us to consider the heavy responsibilities and long hours of work of junior hospital doctors. I do not recall, when I was in the hospital, any complaints being made by them, but I am sure that their exacting duties, which were of such great importance to their patients, left many of them worn out at the end of many working days. I am sure, too, that the majority of hospital patients are deeply grateful to the hospital doctors and to their nurses for the treatment they receive. When considering my noble friend's Bill, we must bear in mind that fatigue can be a dangerous symptom and it may affect a doctor's judgment relating to his patient's needs. Doctors, of course, are aware of this and will normally avoid snap decisions.
In considering this Bill, we must also bear in mind that even today the medical schools find it difficult to
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produce the numbers of doctors which are required to cover all the work that is expected of them, and allowance has to be made for sick leave and for study leave which may be required by young doctors in order to pursue higher examinations. We shall undoubtedly need more medical school doctors, and I hope that improved working conditions for doctors in the hospitals may lead to an increase in the number of young men and women wishing to train as doctors.
Although a reduction in the hours of work of junior hospital doctors is essential, it must be achieved with the full co-operation of the medical profession and, even more importantly, it must not lead to a deterioration in the service given by junior hospital doctors to their patients. I think we all agree that continuity of patient care is of very great importance. I understand that the medical profession would agree on moving from the 88·3 hours average working week to a one-in-three rota, which would represent about 80 hours a week. That would be a very considerable improvement on the present position and I hope that it will come about in the not-too-distant future. I hope, too, that all the proposals made in my noble friend's Bill will be given careful consideration.
8.14 p.m.
Lord Hunt of Fawley: My Lords, perhaps I might just tell a very short story against myself, bearing in mind what the noble Lord, Lord Wells-Pestell, and others have said so well about the effect of a severe lack of sleep on almost everything one does. Some years ago, I was a house surgeon in a teaching hospital in London. I had been on duty and up for two nights without any sleep at all. On the third morning, full of coffee, I felt full of beans. I went down to the surgery, where a lady was sitting on a bench with her skirts drawn up, her varicose veins very prominent and with her notes on the table. I wanted to say: "Are these your notes?" but what I actually said, after this lack of sleep, was: "Good morning, madam; are those your legs?"
I am quite sure that I could never have said such a fatuous thing as that had I had a good night's sleep the night before.
8.16 p.m.
Baroness Jeger: My Lords, this has been a very informed and useful debate and we are all grateful to my noble friend Lord Wells-Pestell for making it possible for us to take part. I was particularly interested to hear the remarks of some, if I may so call them, older doctors, because I do not remember in my young days those junior doctors always being so exhausted that we never had any good times at all; and I am very sorry that occasionally a note of gloom has come into the debate about the lack of resilience and staying-power of many of the young men and women who are working with such dedication in our hospitals. I say that not because we ought to take advantage of them, but because I think it is very important to try to get a "wide focus" look at this problem.
In the first place, I must say that, whatever the noble Lord the Minister is going to tell us about the conference last Friday and the report in the Guardian, there seems to me to have been some lack of courtesy somewhere—and I am not saying where—in that nobody thought fit, either in the department or in the House, to inform my noble friend about this matter which so closely affected

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his Bill. We cannot all read the British Medical Journal and it seems to me that it would have been helpful had we known more about that conference. Now, I feel that things have largely been put right because we have heard so much about it from the most informed source, and we are all better qualified now to discuss the matter.
I must say to your Lordships that I feel this is largely a matter for the profession. There are all sorts of things wrong in the way we use medical manpower and nursing man and woman-power. For one thing, the very name "junior doctor" is misleading because to the general public it usually means someone who is just qualified. The fact that it includes all doctors in the hospital up to registrar level is not well understood outside, and it really is not a felicitous or accurate description.
I should like to make one point that has not so far been mentioned about the hours that the so-called junior doctors are working in hospitals. I have found among many women doctor friends that the hours of hospital work are a serious disincentive to their staying on that ladder of promotion. I am sure that one of the reasons why we have comparatively few women consultants—and that is true in some specialties more than others—is that a woman doctor, however well qualified, wanting to have children and to have some time with her family, will feel that the hospital situation is not compatible with that sort of life because of the long hours. Therefore she is more likely to go into part-time work or perhaps into general practice, which may perhaps be the best thing that any doctor can do. It really is a very strenuous time either for a young man or a young woman—a time when this is not just a kind of student phase in their lives but might go on for many years, because there are certainly always going to be many more junior hospital doctors than there are registrars or consultants.
I should like to follow up a question which was raised by the noble Lord, Lord Winstanley. I, too, had heard about the increase in consultant posts, but is it a fact that there has been a reduction in the preregistration posts? At one time, there was quite a log-jam and there was a great deal of discontent among doctors in several hospitals.
What we have to do is to go carefully through the report of this debate. No Government have solved these problems. I am not introducing any party points at all; we could have a very "party" debate on the National Health Service, but that is not for tonight. We need to put our heads together, to think more about how we use our doctors and about the whole set-up of hospitals in this modern age. Hospitals are very complicated workplaces. If they had not existed, I am not sure whether we should have invented them. One thinks of the multiplicity of disciplines that have to go on, such as cooking, washing, laundering and operating places of skilled technology, places of asylum—and I use the word "asylum" carefully, because it is often under-estimated especially in our mental hospitals.
A doctor must deal with such a variety of situations that more thought about the redistribution of the work burden is as essential as the shortening of hours—and I say this with great respect to my noble friend Lord Wells-Pestell, who I know will agree with me. In any work situation, what you do in the time you are at work is as important as how long you are there. You
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can feel that you are wasting your time when the hours drag, and there is not half the stimulus that there often is in working quite hard for a different number of hours.
I should like to ask the noble Lord the Minister whether he can tell us tonight anything about the number of doctors who are unemployed or underemployed in this country. I do not have any figures with me, because it is not easy to get them, but I have heard of the difficulties that some young men and women are finding, and I know that often it is because it is difficult to move around the country. I am sure that there is always a vacancy somewhere for somebody, but it is not always in the place where you want to work.
The arguments have been very interesting and very serious, and I would end by saying this. It seems to me that the challenge is with those who say that my noble friend's Bill is not workable; that we cannot improve by legislation a situation which we all agree is serious; to say how we can do it. It is not good enough to use as a "get-out" the fact that there are statutory difficulties. So everyone who said to my noble friend that this is not possible by legislation, now owes it to him and to the House to get up and say how it should be done, because the whole mood of this debate is that this should be done.
8.24 p.m.
Lord Elton: My Lords, I think I should start by saying that the Government very much share the concern of the noble Lord, Lord Wells-Pestell. My colleagues and I fully accept that the hours of work of some junior hospital staff are excessive. Indeed, the average junior doctor is contracted for nearly 90 hours a week. Although, as has been made very clear this evening, contracted hours include both time spent on-call and hours actually worked, we consider that this figure is too high. We are anxious that it should be reduced and have started to consider steps to do so.
That brings me to the conference and, in retrospect, I regret that I did not mention this to the noble Lord, Lord Wells-Pestell, in conversations that we had prior to this Bill. But I must make it clear that the people attending the conference, although they came from a representative range of institutions—and I shall later be speaking about those—attended as individuals. Contrary to what I believe the noble Lord, Lord Richardson, who made a most admirable speech, believes, there was no agreed outcome, though the chief medical officer said that he would produce an account of the conference which would be circulated, and I think it will be found that what is circulated bears a close resemblance to what I shall tell your Lordships.
But I regret that I did not mention this only for this reason: that the success of the conference and its prestige were greater than I had supposed, and therefore I shall have to give it slightly more weight than I would otherwise have done in this speech. But the fact remains that it was, in no sense, a bargaining or negotiating conference. The people were not plenipotentiaries and the speculative account, which was as surprising to me as it was to the noble Lord, Lord Wells-Pestell, has perhaps given an apprehension and and understanding of the conference which is, frankly, misleading.

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I very much hope that I have not unwittingly caused offence, because I value the open relationships which it is possible to keep in this House, particularly on matters which we do not treat as straight politics. I should not like it to be thought that I deliberately withheld from the noble Lord information about the conference which, it is true, was known in the profession, but which, none the less, seems to have been built up to appear to be something which it was not. I do not want to belittle its importance and I shall return to the conference.
But, first, let me say that our argument in this debate is not, therefore, with the spirit of this Bill, that juniors' hours should be reduced from excessive levels, but with the way in which this should be achieved. Some noble Lords have made it clear that they are very familiar with the way in which junior doctors work and how their hours are determined, and I must say that some noble Lords seem to have taken great pleasure in the experience. Junior hospital staff are contracted to work a basic 40-hour week. Generally, although not exclusively, this will be from Monday to Friday. Thereafter, they are contracted to perform stand-by or on-call duties. A doctor who is contracted for 90 hours a week will, therefore, spend 50 hours a week on-call or on stand-by. Being on-call or on stand-by can be very inconvenient, but it is not necessarily very tiring.
The amount of time which doctors actually spend working when they are on-call varies between grades, specialties and "firms"—and, as your Lordships will know, in this context a "firm" is a group of doctors led by a consultant. However, various surveys—and the subject has been surveyed—have suggested that an average of about 30 to 35 per cent. of on-call and stand-by time is spent in working. In some specialties it can be considerably less than this. For example, I think that the number of urgent turn-outs in dermatology or, indeed, neurology in the middle of the night are minimal, but we are not, of course, looking only at dermatologists and neurologists.
On average, then, junior doctors will actually be working for perhaps 62 hours a week, which sounds a lot and by comparison with other sorts of work it certainly is a lot. But medicine is not, as noble Lords have already said, just a job like any other. Doctors, whatever we consider to be the maximum they can work, cannot simply work from nine to five. Patients need round-the-clock care and they need it from doctors who are familiar with their case. The noble Lord, Lord Winstanley, emphasised the benefits that result from that. Long hours are part of the practice of medicine. I doubt whether there is anyone who enters medical school who does not realise this fact before he goes in, and I am certain that he knows it when he comes out.
Medicine is more than a trade. As the noble Lord, Lord Davies of Leek, put it with his customary eloquence, those who answer its call do not expect an easy life while they acquire their skill. This has a great deal to do with the profound respect in which the profession is held by other people in the community. Fatigue, however, is, without doubt, experienced by some doctors, with results such as those mentioned by the noble Lord, Lord Hunter of Newington, and others.
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I ought, however, to point out that every patient in a National Health Service hospital is under the care of a named consultant. It is the responsibility of that consultant to ensure that the medical care provided for that patient is adequate and, in particular, to decide whether treatment can safely be left to the junior doctor on duty. Equally, it is the responsibility of the junior doctor to call in a more senior doctor or the consultant if he feels he is unable to cope. It is this which provides the safeguard for patients from junior doctors who, unlike the noble Lord, Lord Hill of Luton, are not entirely indefatigable.
I do not want, none the less, to suggest that no improvement is possible. Indeed, I have already referred to the steps which we have taken to look for improvements. However, I must stress that the kind of figures mentioned in the Bill are quite impracticable, even as a distant target. This is not because we wish to exploit young men and women but simply because an adequate standard of care cannot be provided by doctors who go off duty at a fixed time, regardless of the needs of their patients. The noble Lord, Lord Hill of Luton, was very precise about that. That is no more today in the nature of their chosen profession than it was 50 years ago.
There is another important point which I ought to emphasise. Junior doctors are doctors in training and the course of training which they follow is laid down, not by Government but by completely independent professional bodies: the General Medical Council and the Royal Colleges. Posts limited in the way proposed in the Bill would not, I believe, be recognised by these bodies as providing adequate training. To become masters of their craft, doctors need to see a wide range of different cases. They need to see individual cases develop over a time-scale which has to be set not by the clock, or by regulations, but by the patient. The clock has an apparently malevolent influence of its own. I understand that in medicine, as in some other professions, the most interesting as well as the most urgent developments have an uncanny habit of turning up in the wee small hours of the night.
There is another consideration, by no means the least. Doctors need to learn to make crucial decisions at inconvenient and uncomfortable times because that is very often the condition, when they are trained, in which they are going to have to operate. They have to learn to respond to emergencies, even though they have just woken up or have been on duty for a long time. This is what they will be called upon to do when they are fully trained. So I do not think that it is an exaggeration to say that, if the Bill were passed, postgraduate training in this country would fail to reach the standards of which we are now justly proud.
The Bill also seems to me to have a number of other rather serious defects. There would, for example, seem to be no restriction upon a doctor contracting, of his own choice, separately with two different health authorities to work for longer than the stipulated periods, thus defeating the Bill's objective. Clause 1(b) and (c) seek to put defined limits upon the amount of work which may be done in any one day and the amount of time which may be given for refreshment.
This seems to me—and others have pointed it out—to be similar to the way we deal with safety in transport. The noble Lord himself drew on that analogy. But

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it is not so easy as that and the analogy is not so straightforward. Driving rosters can take account of the need for scheduled stops, but you cannot do that for doctors. A patient cannot always be left at the end of a 10-hour day. The result would be that doctors would then be required by their professional undertakings to put in "voluntary"—and I use the word in quotation marks—overtime, for which no payment could be provided. I do not think that this was the intention of the Bill. However, it seems to me to be an unseen but unavoidable consequence which would be neither right nor fair.
I hope I have made it clear that the Government recognise the very real problem to which the noble Lord's Bill is addressed, but they do not regard it as a practical solution. As the noble Lord, Lord Richardson, himself said—and he put it much more trenchantly than can I—the Hospital Junior Staff Committee, by far the largest of the various bodies which speak for junior doctors, recently considered this Bill and passed the motion which he read out: That it was opposed to any legislation seeking to reduce the hours of work of junior doctors at the present time.
So what is the way forward? I agree entirely that we cannot simply say that this legislation is not suitable and duck out of the responsibility. To a layman, the obvious solution would be to employ more junior doctors so that each worked fewer hours. The problem with that is that these doctors are training for consultant posts. To employ more, without creating more consultant posts pro rata, would produce ever larger numbers of doctors with highly specialised skills, acquired at great expense, and with no opportunity to use these skills. The junior doctors themselves have expressed very strongly their support for our policy of reducing the number of junior posts while increasing the number of consultants. They have done so in their evidence to the Social Services Committee, in their comments on the report of the Social Services Committee and in letters to the Secretary of State. This policy will improve their career prospects and I am convinced that it will improve the quality of patient care.
This brings me to the point at which I should reassure the noble Lord, Lord Winstanley, and others (including the noble Baroness, Lady Jeger) that the number of pre-registration posts is not in process of reduction. It is carefully controlled to relate to the number of our medical school graduates. As the latter has increased, so has the former. As to the moratorium on junior posts, certainly there is a moratorium on junior posts, but the overall numbers in the profession are planned to expand—but by consultant, not junior, expansion because of the distortion of the career pattern of doctors in hospitals and of the inordinate length of time that it takes juniors to reach consultant appointments under the present system.
The answer to the problem lies in a careful examination of the organisation of medical work in hospitals, I quite agree—in making more efficient use of all doctors. In some cases, juniors may be able to take out-of-hours cover for more patients, but for a shorter time. In others, the burden of out-of-hours work may be redistributed between juniors and consultants.
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In some cases, the work involved may be so specialised that only a very few doctors in any hospital are capable of providing the necessary cover. Sometimes a consultant may disagree with the noble Lord, Lord Richardson, and judge it right that only the doctors within his "firm" should give cover to his patients—though if he has read the noble Lord's speech with care 1 think he will take very careful thought before he disagrees with him about anything. These doctors know the patients best. This again was the point made by the noble Lord, Lord Winstanley. In other cases, a doctor from one "firm" may be able to cover for several.
The situation is not clear-cut. It is not susceptible to uniform, cut-and-dried solutions. It follows from this that any approach is likely to be piecemeal and not across the board. There must be flexibility to allow for the particular circumstances of individual specialties and individual hospitals. This is basically a task for the profession itself. Legislation is too blunt an instrument. There must be preparation in the way of seeing what is going on now. On the question of the study of doctors' hours, we hope to see published later this year a full survey of the working of junior hospital doctors undertaken by the Office of Manpower Economics on behalf of the Doctors and Dentists Review Body.
The question of the distribution of doctors also arises. At this point may I say that, while it is true that some posts are less attractive than others, this is not the main reason for the disparity in staffing between teaching, hospitals and others. Junior doctors are, let us again remind ourselves, in training, and inevitably training in the more specialised and recondite areas of the subject is available only in the specialised teaching hospitals. For this reason, the training bodies generally expect a fair part of the training to be spent in such hospitals, and therefore there is bound to be some sort of concentration in them.
I said that I would return to the matter of the conference which was arranged by the chief medical officer on the subject and was held last Friday. I myself was not present, but I have received a full report. I hope that noble Lords will find a brief account of the proceedings helpful. It does not include an agreed statement, but I have already said that an account will be prepared and circulated. In summary, I believe that it will say that the participants came from all sections of the medical profession and in NHS management, but they spoke as individuals rather than as representatives—and that is really rather crucial to my position on this. I am told that their discussion was frank and realistic for precisely that reason. It means, of course, that neither Government nor any other organisation are committed by the conclusions of the conference. Certain themes attracted such general support, however, that they might lead to a fair degree of consensus in the profession at large, and this is the factor of which I was not aware last week.
First, there was general recognition that there is a real problem to which a solution must be found. As one speaker put it, the conference was not about whether something needed to be done but what needed to be done. There was also wide agreement as to what the immediate aim of any such action should be. Virtually without dissent, I understand, the partici-

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pants felt that the first step should be the abolition of the so-called "one-in-two" rota in the acute specialties; that is, the arrangement whereby a doctor is on duty every second night and evey second weekend. For the longer term, the goal might be no rota more onerous than one-in-four, although most of those present felt that one-in-three rotas would be acceptable as an interim target. This bears out what was said by the noble Baroness, Lady Stewart of Alvechurch.
To translate this into more familiar language, this interim target of a one-in-three rota corresponds to slightly more than 80 hours per week on duty, while the long-term target of one-in-four rotas corresponds to 72 hours per week on duty. The face of the noble Lord, Lord Wells-Pestell, may be lengthening at the disparity between that target and his own, but at least this is the profession speaking. I should repeat that these targets are for the acute specialties—those where emergencies are common and rapid action is essential. Another point to emerge was that not all specialties are like this. There are those when the demands on a doctor out of hours amount to little more than an occasional request for advice over the telephone. With these specialties, even a one-in-one rota—that is, notionally being on call for all 168 hours a week—is not an onerous responsibility.
If I may draw a conclusion from all this, it is that the concept of excessive hours for a doctor is a very different one from that for most other workers. The reason for this is perhaps the second major theme to arise from the conference. British medicine is based on the concept of continuity of care; the idea that an individual doctor accepts personal responsibility for a patient throughout the patient's treatment. Certainly that is how many patients see it. To the layman, the importance of this may not be apparent, but I am told that speaker after speaker stressed that if this concept was lost it would be the patients who would lose out and that the loss would be very real.
The final theme was that targets can be set nationally but that implementation must be very much a local matter. Noble Lords have already referred to the unevenness of distribution of resources, both between types of hospital and between different parts of the country. Arrangements that will work in a large hospital, moreover, will not work in a small hospital. Even hospital geography—the arrangements of the wards and the placement of the doctors—can be relevant.
Most important of all, it was felt that changes in the present arrangements must be discussed fully and agreed among the doctors concerned. In brief, the conference has identified the difficulties and has even suggested a way forward. Above all, I believe it has built up a head of steam in this matter which has been compounded and multiplied by the noble Lord, Lord Wells-Pestell, in introducing this very timely debate on the Bill. Further progress is a matter for discussion in a number of places; within professional organisations such as the Royal Colleges, in the negotiating meetings between the department and the profession, and locally in National Health Service hospitals.
I should at this stage pay tribute to the distinction of the contributors to this debate. It is one of the more alarming things about coming to the Government's Despatch Box, which one regards as a pinnacle of unassailable virtue and authority, suddenly to
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discover that one is dwarfed by the experience and stature of those with whom one engages in debate thereafter.
The noble Lord, Lord Wells-Pestell, has drawn your Lordships' attention to an issue of very great importance in a timely and forceful manner. At one time or another, almost all of us spend a part of our lives in hospital in the hands of doctors. The trust with which we do so depends on the character of those who work in the profession and also upon their skills. The conditions under which those skills are acquired are not satisfactory. They do place very great strains on those who train for the profession. The Government recognise this problem and are already addressing themselves to it, This useful debate has thrown further light on the subject. It has highlighted the need to look at the distribution of doctors, both geographically and between specialisms, and the distribution of work between specialisms. It has evoked from the noble Lord, Lord Hunter of Newington, statistics that will be read with great interest in the colums of Hansard tomorrow, and it has evoked from other noble Lords speeches of interest and authority which it would be difficult for any other Chamber to have concentrated in one period. This debate will be noted with interest both by my colleagues and by professional and other members of the department whose concern it is to reduce the hours at present worked by junior doctors to a more statisfactory level. They also will be indebted to the noble Lord, Lord Wells-Pestell, for the service he has done in introducing the Bill and calling for this very useful discussion.
None the less, in view of the practical difficulties inherent in the Bill itself, and more particularly in view of the fact that it will pre-empt a full and proper discussion of this problem and attempt to solve it with an instrument which I fear, whatever was done with it in later stages, would remain inappropriately rigid, I hope the noble Lord will feel that the service he has done to the profession and to your Lordships' House is sufficient and that it will not be necessary to proceed further.
8.48 p.m.
Lord Wells-Pestell: My Lords, I am grateful to everyone who has taken part in this debate on the Second Reading today. I believe that this is the wrong time to deal with matters which have been raised by various individuals but I am grateful to everybody. I did not know that my noble friend Lord Molloy was intervening, but I am glad to hear him because of his experience with the Federation of Hospital Service Employees —and sometimes we forget that they have a point of view.
If there is anyone I should like to have done battle with it would by my old friend the noble Lord, Lord Hill of Luton. I would like to take him to task for a number of things he said but, as 1 have said, I do not believe it will serve any useful purpose. I am grateful because we have been given a lot of specific information which is new to many of us, but which is of supreme importance to the understanding of this particular problem.
The one thing I feel very strongly about is the number of times it was said by people, including the Minister, that legislation is not the way to do this. I agree with

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the noble Lord, Lord Richardson, that we ought to do this by arrangement. But what I want to say very strongly is that if it cannot be done by arrangement, then there is a responsibility upon Parliament to see that patients are protected. The best way of protecting patients is to see that junior hospital doctors do not work extraordinarily long hours. If they do and the department cannot deal with it, the BMA cannot deal with it and the doctors themselves cannot deal with it, then I believe it is a matter for legislation, and I would have no hesitation in coming back again if this was necessary.
I am grateful to the noble Lord, Lord Elton, for his opening remarks. I would not accuse him at any time of not treating one fairly; I have had a long enough experience and association with him to know that he would not do this deliberately. But I did feel that, knowing as much as we do now, it might have been possible to deal with this matter in some other way.
I think the only other thing I want to say is this, that I am not, even now, convinced in my own mind that there is going to be a consistent, well-thought-out, determined policy to bring down hours. I do not think it is good enough for the department to say there will be discussions going on here, discussions going on there, discussions going on somewhere else. I do not know whether the noble Lord can give an assurance that this matter will be co-ordinated by the department, because in the last analysis it will be the department who will have to agree to any reduction in hours. I would like to feel that this is going forward, not haphazardly, not when various groups decide to meet, but under the leadership and guidance of the department, so that within a comparatively short space of time there will be something emerging. I do not know whether the noble Lord would like to intervene before I finish.
Lord Elton: My Lords, with some temerity, I would say that I have experience of predicting the length of time things take in Government and have been wrong. I would not like to come to the House and say that this problem will be solved in a particular span of time. I have said that we recognise the problem, we want to solve it and we intend to play our proper role in it. I have tried to make it clear that it is not entirely the Government's role to solve it, because standards of training and so on are matters for other bodies than Government and the Government should not issue edicts to them. But we shall certainly be at the centre of the operation, and with Lord Wells-Pestell's riding whip to it, we shall not be able to spend a long time about it.
Lord Wells-Pestell: My Lords, I am obliged to the noble Lord for those comments. We do know that if a Government department is not enthusiastic about something there is nothing like a Government department for dragging its feet, and it does it extraordinarily well, as the noble Lord knows. I shall watch for the dragging feet. Meanwhile, with the approval of your Lordships' House, I therefore beg leave to withdraw the Motion for Second Reading.
Motion for Second Reading, by leave, withdrawn.

Personal Savings and Housing Markets
8.53 p.m.
The Earl of Kinnoullrose to ask Her Majesty's Government whether they intend to review their policy towards the increasing competition on the personal savings market and the housing market and their own requirements to raise funds on the open market.
The noble Earl said: My Lords, after the stimulating debate we have heard this afternoon, I venture briefly to bring before the House a subject, I would submit, of equal importance to the community, that of the national savings market and its direct link to housing finance. I apologise to the House immediately for persisting with this subject at such a late hour, particularly on a rail strike day, but it is my third attempt to hold this debate, and if I withdraw now I feel that other noble Lords who have kindly indicated that they wish to take part may wonder at my credibility or staying power. I should like to thank those noble Lords who indicated that they would be here, and I see are here, and particularly my noble friend, who I hope will give us a stimulating answer. I should briefly declare an interest, in that I am associated with a building society. I will not mention its name in case I am accused of advertising. I am speaking in a personal capacity and in no way is that society, or indeed the Building Societies Association, to blame for any of my remarks.
My Lords, the purpose of the Question is not just to make an idle moan to my noble friend on behalf of the building societies, who some may mistakenly believe are still the fuddy-duddy of our financial institutions. Nor is it to claim that catastrophe is just around the corner, because the January figures do not support that, as my noble friend would be quick to point out. The purpose has a serious note. It is a warning that if Government policies towards who gets what share of the national savings cake go unchecked, the result could lead to an effective destruction, I suggest, of a vehicle that has performed a magnificent service to the community over the past two centuries, has been primarily responsible for raising home ownership to 55 per cent. now in this country, and I hope higher in the future, and has been a great stabilising influence on the home mortgage market in an often highly unstable and volatile money market.
There were two clearly identifiable policy changes that the Government made in 1980 which led to the building societies being squeezed for funds. The first was the lifting of what is delicately termed the "corset" on the banks which had previously restricted their ability to attract interest bearing deposits. This led to fierce competition for deposit and savings markets, while the banks kept a canny eye on their vast pool of current account holdings, which of course was costing them nothing.
The second policy change was the Government's decision to raise part of their borrowing requirements from the national savings market—15 per cent. in 1980, rising to over 30 per cent. in 1981. Critics may ask: What was wrong with these two policy changes, which surely stimulated competition, which provided Government borrowing more cheaply, while from the January figures the building societies appear to be doing well? In my book there is indeed nothing wrong with healthy competition; it is good for the industry and usually beneficial to the consumer. For investors indeed it was

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a boom time, if anyone had any money. The market saw a proliferation of goodies being offered. Banks offered interest on current accounts. The Government offered a series of index-linked high yield certificates, and building societies started to compete fiercely with everyone, including themselves, with a wide variety of term shares.
But to take a view on the fairness of competition between the three main parties seeking the major slice of the personal savings market, the picture, I suggest to your Lordships, is much more unbalanced. In the first place, the Government by definition are out on their own. I do not belittle their achievement in raising their huge targets, except to say that it was not cheap money. To a higher bracket taxpayer their 23rd issue certificate offered a gross return of no less than 25 per cent., a little above, I would suggest to my noble friend, market rates. How this equates in cost to a gilt placing by Government is something I hope my noble friend will indicate later on, because of course it is very relevant to Government policy on borrowing.
As to the banks versus building societies, they are of course old well-respected protagonists. The battle has indeed hotted up of late, not only for investing funds but also for the mortgage market, where the banks have made sizeable inroads. No one could argue that the mortgage market has suffered. Indeed, the borrower has gained, and this should last while funds exceed mortgage demand. On the investment side competition is more hampered, not because the building societies are afraid to compete, but because they have severe restraints within which they can operate in a now highly sophisticated market. My noble friend's department is, of course, well aware of this, and indeed new major building society legislation has been brewing for some years. It would be helpful tonight if my noble friend could tell us when this legislation is likely to emerge, and if, indeed, it is some way off, whether the Government would consider certain amendments now in order to assist the building societies.
On the figures published for the last year it may seem that building societies are holding their own on investments. In practice they were down last year on the net new money invested with them. I hope that that is not an indicator of the future, for it is vitally important that this movement is not strangled for funds in the future. In an expanding house market the requirement for funds will increase substantially as the average mortgage case increases. If at the same time industry seeks more investment funds from the banks then the pressure for mortgage business on building societies, and, indeed, the responsibility on building societies, will be that greater.
I do not cry "wolf" tonight to my noble friend, but I do seek an assurance that Her Majesty's Government are keenly aware of keeping a balance of not personally plundering the honeypot of savings market, of creating an atmosphere of fair competition, of maintaining an environment within which the building societies can continue to play a role they know best, of encouraging the further growth of home ownership.
9.1 p.m.
Lord Cledwyn of Penrhos: My Lords, the House will
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be grateful to the noble Earl, Lord Kinnoull, for bringing this important subject before us and for the thoughtful speech which he has just made. Indeed, his Unstarred Question opens the door to a wide-ranging debate and I wish that it had been possible for him to have made his speech rather earlier in the day so that other noble Lords could have heard his contribution and, indeed, taken part in the debate.
I have given some thought to the wording of his Unstarred Question and it seems to me that it raises three issues and I should like to deal with them as briefly as I can. The first issue is competition in the personal savings market, housing and Government borrowing. Dominating all this are the grave consequences of the Government's economic policy. While these have had effects far beyond the issues raised here, they have also been the major element in these matters, with which we are more closely concerned in the noble Earl's Unstarred Question.
Personal savings are a vital national resource which should be devoted towards the building of the nation's future. Most people save for their retirement and old age. The money they save should be used to ensure that the country can, in fact, sustain them when they reach retirement. This, in my submission, is not an unreasonable expectation. That means that personal savings should be channelled through the financial markets to some organisation which will use the funds to build our future—building societies, as the noble Earl has just said, to build houses; companies to install new machinery or buildings or the Government to provide the infrastructure to build roads, houses or provide education and training.
However, what have the Government in fact done? I do not want to introduce an unnecessarily controversial note at this time of night because it may upset noble Lords, but I am bound to make this point because it relates directly to the Unstarred Question. The first thing that the Government did was to relax exchange controls with the result that a vast amount of money flows out of the country—not even to set up new plant abroad but just to buy foreign stocks and shares. I took the view that it is extremely difficult to find justification for such a step at such a time. I am no great expert in this field, but is it not the case that the Government have further distorted the savings market by their selection of their money supply target? I think that that is a point to which the noble Lord the Minister might direct himself when he replies.
The Government's means of money supply—sterling M3—happens to cover in its counterparts some kinds of personal savings like bank deposits and exludes others like building society deposits. The result is that the Government have tried, albeit unsuccessfully, to restrain the growth of the items that lay within their own totally arbitrary definition of money. They have chosen three instruments for achieving their money supply targets—deflating the economy through reducing expenditure and raising taxes, deflating the economy by raising interest rates, and issuing new forms of national savings. They have also had a major impact on savings generally. Because personal income has been depressed through falling employment, personal savings have been themselves depressed. High and volatile interest rates have caused great instabilities in the flow of money to

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different financial institutions, especially building societies. It is the building societies, in fact, which have suffered most.
Let us consider briefly the grim effect of this on the housing market in which the noble Lord is, I know, extremely interested. In November of last year even before the bad weather started, the number of housing completions fell to less than 13,000—the lowest number since the early fifties. In the whole of last year 199,000 homes were completed. The number of houses started—153,000—was also a record low. Then there was the appalling effect on council house building. In making their obeisance to their public sector borrowing requirement the Government have decimated the council building programme. I am bound to say that this is a matter of deep regret and sorrow to me personally. I always took the view when I was a Minister—and I had responsibility for housing in Wales for quite a time—that it was right to keep a balance as between the public contribution to the housing market and the private contribution. I took the view that 50-50 was about right. But now we have gone into some vacuum where there is great uncertainty about the future and, of course, the waiting lists are accordingly very long indeed.
The Government's policies of high interest rates have undermined the private housing market as well. Indeed, 350,000—that is, one quarter of all building workers—are now unemployed while the housing situation deteriorates. Meanwhile, we have the irony that building societies are finding it more difficult to raise money while the banks are moving more and more into the housing market. I think that that is the fact which the noble Earl recognised in his speech. Perhaps the Minister will tell how this effects that Government's monetary targets. I think that it must take them severely off course. Again, I am not an expert, and if the noble Lord, with his authority, can correct me, I shall certainly withdraw, but that is the impression I have.
The third instrument that the Government have tried to use to further their policy is the greater use of new national savings of various kinds. This is wholly to be applauded. National savings is a reliable way of securing people's savings and normally a way of ensuring that they are used for some constructive purpose which will lead to the development of the economy and the standards of our society. To what extent, however, are the present Government trying to secure national savings in the apparent belief that by funding the national debt in this way they will reduce the growth in their money supply? Yet, in spite of the considerable success of their sales of national savings, it does not seem to have helped them a great deal in their aims. The money that they are able to borrow in this way is not, tragically, going to any useful national purpose; it is going to finance unemployment. So while we can commend what the Government have done in the savings market, we can only regret their apparent reasons for doing it.
In conclusion, let me turn to another aspect. The extension of indexed "granny" bonds to a wider set of borrowers is also welcome. This comes within the noble Earl's Unstarred Question. The provision of a way of guaranteeing people's savings against the effects
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of inflation is to be commended. Surely the aim should be to achieve a position where everyone's pension is index-linked. As the Scott Report so widely concluded, the only thing wrong with index-linked public service pensions is that they do not apply to everyone.
To see the issue as one of competition in the savings market seems to me to be misconceived. The main issue is how to encourage saving and ensure that it is put to good use. The notion of competition is somewhat misleading. The vast bulk of people's savings goes into pension funds and life assurance. I cannot see that as competition; the money is committed to those institutions. People are offered no choice. Of the rest, which goes to banks, building societies and so on, the issue of competition is again confusing. Flows to and from one kind of savings institution seem to be highly responsive to interest rate charges or the development of new instruments. But these fluctuations are not the new savings of the mass of the population; they are to an enormous extent the wealth of the men who manage their portfolios so that they can extract the last ounce of interest out of financial markets.
If I had confidence that these financial markets would serve the whole nation selflessly, I might take a modified view. But over the years they have served one section of the community very well indeed. They have done well out of the policies of the present Government with their high interest rates and abandonment of control on both domestic and overseas lending. I am not sure that this has been beneficial to the nation as a whole—to everyone. I respect the noble Earl's sincerity and the skill with which he has made his case. I think that he has made an important contribution. His knowledge, especially of the workings of the building societies, was I think very helpful to the debate. But I do not think that the Government need a new policy on competition in financial markets. What they need is an entirely new approach to saving and wealth. I do not know whether they have the vision to do what is necessary; namely, to channel the wealth of this country, including the savings of its people, into rebuilding the country, in putting its people back to work, and not to look constantly for the best return irrespective of the social values.
The people of this country have suffered a good deal in recent years and they will respond to policies which they believe to be right and, even more readily, to policies which they feel to be fair—fair to every section of the community. Until that kind of leadership is provided, I do not think that this country will make a significant advance. The manipulation of money in the markets is not something which gives them hope or confidence. I can only hope that the Government will, as the menacing clouds of a general election loom in the sky, change their course and seek to manage our affairs rather more prudently. In saying that, may I once again thank the noble Earl for giving us the opportunity to say these things.
9.17 p.m.
Lord Hill of Luton: My Lords, without difficulty, I shall resist the temptation to follow many trails laid by the noble Lord, Lord Cledwyn, and confine myself to the subject raised by the noble Earl. Indeed, there is only one aspect of it on which I feel strongly. I do not

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complain that competition from the banks and from national savings has come to building societies. I think that in the long-term it will have a bracing and energising effect on building societies. They cannot expect to continue without competition, and I do not in any way object to that competition.
I want to look at the particular line followed by the Treasury since it decided to finance the PSBR by national savings. Think of the number of certificate offers that are out today. I do not pretend to be comprehensive, but I know that certificate numbers 14, 16, 18, 19, 23, retirement certificates, second index-linked certificates are on offer today. I may have left some out. I admit, privately, that I have named those in which I have got a very modest portion. I know that they are still alive and receiving.
National Savings is a very strong competitor from time to time. My complaint about them by the way is that they do not tell you when in fact your particular certificate has reached the end of its earning life. I do not regard their public presentation of what they offer and the aid that they offer to those who have subscribed as particularly helpful or particularly satisfactory. But such are the tax-free interest rates offered that one has to overlook that relative inefficiency in presentation because of that tax free offer.
Bearing in mind the appeal that these certificates must make to the high taxpayer, I wonder how much tax is lost to the Exchequer by the selection of this method of attracting investment. It must be pretty big. It must be taken into account in looking at the national balance sheet that emerges from a consideration of the inflow and the outflow from such certificates. What I want particularly to do is to illustrate the way that this form of investment—of which there can be no criticism of any size—proceeds to attract money.
I have been looking at what happened in the later months last year; September, October and November. What happened as a result of the offers that were made? I will give you the offers that were put. On 7th September age restriction on purchases of second issue index-linked abolished. Previously confined to the over-50s. On 19th October maximum holding of index-linked certificates increased from £3,000 to £5,000. On 1st November National Savings Bank investment account rate increased from 13 per cent. to 14·5 per cent. That is not tax free except for the first portion of it. On 9th November new 23rd issue of conventional certificates offering 10·51 per cent. free of tax.
What happened in that corresponding period of three or four months to the net receipts of the building societies? July, £290 million; August, £244 million, not a high level but that was the kind of level before September; September, £334 million; then October, that is when the attractive pennies dropped to the investors in building societies, £154 million; in November, £65 million. In other words, the timing of these public offers seems from time to time so designed to secure a substantial fall, mostly due to withdrawals, from building societies.
It is not much to ask, but when the Treasury is considering the issue of certificates would they bear in mind that there is another form of saving which is deeply in the public interest; that of saving in building societies to make possible home ownership and, what is
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more, for this is a newer activity, of linking with public authorities for providing the resources for public housing. This seems to me to be either thoughtless or inconsiderate.
I do not criticise their seeking this money in this way. I should be a hypocrite if I criticised the rate of interest they offered. I do not object to the competition with the banks, but I think that the Treasury should have an eye on the importance of a steady level of net inflow to building societies. So often it comes at a time when, as a result, they have substantially to reduce their commitments for some months ahead for they cannot guarantee, they cannot be sure, that after the main impact of these new issues the net income will rise. It usually rises after a while, but none can be confident it will. So the one criticism I would offer is the lack of consideration of the Treasury in the timing of its issues, bearing in mind the importance of the building society movement in the social life of this country.
9.20 p.m.
Lord Houghton of Sowerby: My Lords, I am a vice-president of the Building Societies Association—
Lord Hill of Luton: I am, too, my Lords, but I forgot to mention it; perhaps my noble friend world put in a word for me.
Lord Houghton of Sowerby:—as is my noble friend Lord Hill of Luton. The noble Earl, Lord Kinnoull, is chairman of a building society in which I am an investor and have been a borrower. I have an interest in other building societies, mostly on principle, not necessarily because they offer me the best opportunity of a return on my money. I have been in building societies all my life, and my father before me. When people ask me as an investor to support my society, I yield something of myself, my history and my emotions to that society, yet it is really a meaningless entity; I do not feel I belong to anything, nor do they think I belong to them.
I fear that the building societies could easily lose their way, or go the wrong way, and, when I meet my building society friends in private, they hear my point of view in shocked silence, but I will not repeat my criticisms of the building societies here tonight: as my noble friend Lord Hill once said, "not in front of the children", and I reserve my candour for more private occasions.
Homeownership is the most favourable and privileged investment today, and I need not go over the several headings of advantage in buying a house on mortgage through a building society; so many millions of people have done it and know the value of it, and I doubt whether anybody has ever regretted it. I am, however, concerned with the investor. He has not had all the consideration he should have had from the building societies and from society in general. It is the building society investor who provides the money for the favourable investment of the house-purchaser. He lends his money at the present value, it is repaid over a long period in a depreciating currency, he derives no benefit from rising property values and therefore has no hedge against inflation. The return he will get on his investment will mostly be lower than the going rate of inflation, so that he finishes up with his investment and all his

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accumulations from it being of less value than when he started. And, if he happens to be exempt from income tax, he will suffer a discount of 26 per cent., the composite rate, from the interest earned on his investment and will be denied by law any opportunity of getting the money back from the Inland Revenue. I remember when a Labour Chancellor of the Exchequer amended the Finance Bill to stop the building society investor who was tax-exempt succeeding in court in a claim for the return of his income tax deduction. It would have ruined the whole structure of the building society arrangements with the Inland Revenue had he succeeded.
The truth of the matter is that the interests of the borrower are politics, the interests of the investor are not. An increase in the mortgage lending rate is politics, a lowering of the return on the investment is not. It takes six investors to finance one borrower, and yet the investors are regarded as incidental to the major political concern of all the parties, especially the Labour Party. The borrower must come first.
Indeed, on one occasion when the market rate of money rose, a Labour Government were so anxious on political grounds to avoid an increase in the mortgage lending rate that they came to an arrangement with the building societies that they should not put up the lending rate, and, in order that they should not feel the disadvantage of an unfavourable position in the investment market, the Government pumped money into the building societies to fill the gap. But all the investors in the building societies at that time were cheated of the market rate on their investment in order that the borrower could get lower than the going rate. That is how the borrower is treated in a political crisis, to the disadvantage of the investor. I regarded that as a quite lamentable episode.
As I have been saying for years, the unsophisticated investor in this country has been cheated ever since the war. He has been cheated by the Post Office, the Co-ops and the building societies. The poor investor has paid dearly and disproportionately high for what he values most and understands best: security and easy withdrawal. That is the clue to the investments in building societies on the part of very many people. For good measure it relieves them of being troubled by the pettifogging attentions of the income tax man. Many a time I have tried to persuade tax-exempt investors to get out of a building society and go into local authority loans at a substantially higher rate of interest, but the moment they know that the interest will be tax deducted and that they will have to get the money back from the Inland Revenue, they shy from it. However, something could be done to avoid the tax-exempt investor going to a building society rather than securing benefit elsewhere.
So I say to the building societies look after your investors; they are the grass roots and the great standby of the building society movement. And it is a movement, or it ought to be. When I hear the building Societies Association talking about "our industry", I know that they have it wrong. They are not in business, and they are not an industry. They are a financial service, and they are built upon concessions, granted to encourage thrift societies, seeking support from the working-classes in the last century. That was their foundation, and to a very large extent it is still their
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support. They began as mutual thrift clubs, with members qualifying for loans as the common fund mounted up; and no one got a loan who was not an investor. I am glad to see that some of the building societies are returning to that first principle, as the banks are in fact doing, too, in saying, "Save first, borrow later". That is a pretty good principle, I think, on which to work.
I do not approve of building societies going from rags to riches, from the thrift club to the financial institution, without a thorough review of their role, control and management. They have ceased to be under the shareholders' control. Their boards are virtually self-appointing, self-perpetuating oligarchies. You try to get on the board of a building society and see what happens! You cannot even get hold of the names and addresses of the constituents. No, they are not banks, thay are not joint-stock companies with equity shareholders, they are not investment trusts: they are building societies, and they claim that noble and honoured name by reason of their origins and the principles upon which they first worked. Let them remember that.
Three institutions are competing for people's savings—building societies, banks and the state. Each have their claim, each their purpose. The question is: What is their purpose, their aim, and what is the relevant importance of the precedence to be given to it? Here I think my noble friend Lord Cledwyn of Penrhos dealt skilfully, with knowledge, with the question of the use of the nation's resources. After all, there is a sort of pool of disposable incomes, of money yielded up for use elsewhere. How is it to be used? We cannot afford to put everything into housing, however desirable that might be.
The reason why there is a lot of money "sloshing about" at the present time is that the banks are under-spent on their allocation for industrial investment. They are looking around for a home for it. But if the Government were in a position to stimulate industrial investment or felt the moment was right to do it by matching grants to industry alongside their own investment, the tap would be turned off by the banks overnight, because bank money would go where it is more suitable for it to be, and that is into industrial investment, where the return is over a much shorter period, generally, than investment in mortgages for housing on a 25-year term.
But it is Governments who are supposed to be in control of the national economy, not the building societies and not the banks. I know we are told, "The financial institutions rule—OK?", but they should not be doing it and most Governments make sure that they do not. There has to be some priority for the mobilisation of the nation's resources and some influence used upon the flow of funds for purposes which will suit the national interest at that particular time.
I do not think building societies have any serious immediate anxieties. I do not think that they should become rivals of the state. The size of the housing programme, the growth of the housing stock and the amount of the nation's fixed investment is to a large extent part of the wider economic management, which is what my noble friend said. I think that the building societies have been too ready to assume a sense of grievance at what the Government have been doing

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to attract the people's savings. They may feel disappointed, but I am not sure that they have a grievance. Although they have restraints and restrictions on their ability to appeal for funds and in the use of funds, they have all the privileges that those restrictions confer on them.
If there is to be a wide expansion of the Government housing programme the building societies will come in and probably Government money as well. I think that expansion of the building societies for, as it were, self-gratification is not economically justified. I think that if the Government had deliberately minimised the capacity of the local authorities to finance house purchase, then the building societies should not feel that they are entitled to an expansion of their services in consequence. The building societies would always have considerable sums at their disposal on the maturity of mortgages and repayment of capital sums.
I, myself, think that there is no need for the building societies to get running scared of the banks. The building societies will be all right—they have been there too long—if they stick to their role. There is nothing to replace them. No Left-wing Labour Government dare talk about nationalising the building societies—not if they read the history of 1931 when Philip Snowden lost the Labour Party the election by his Post Office savings scare. That is something that no Government will put their hands on. On the contrary, they are likely to be cosseted and taken care of.
No, I hope that the ambitions of the building society directors, unrestrained by their shareholders, will not make them too big for their boots or spread their desires for financial influence and power beyond the range of their original concept and the conditions upon which they are allowed to function in a relatively privileged position in the money markets today.
9.37 p.m.
Lord Cullen of Ashbourne: My Lords, we have had an interesting short debate on this subject which has ranged widely. I do not promise to go into all the alleys which have been opened up. My noble friend's Unstarred Question raises a number of related issues. He speaks of the Government's policy in the personal savings market on the one hand, which, of course, principally concerns the approach to national savings. He talks also of finance in the housing market—and ties this in with the whole question of the Government's funding policy.
These are large topics for a short debate. But my noble friend is, if I may say so, quite right to raise them together. It is vital to see the relationship between national savings and funding policy in general so as to understand the impact of the use of different mixes of funding instruments. But there is another aspect of this. It is important that we should encourage the habit of saving. It is not only of real value to the economy as a whole but of real value to the individual. It enables him to build up a modest amount of capital for himself and it gives him a measure of security in times of difficulty. National savings, therefore, not only help the Government: they provide a valuable service to the individual.
It may be useful if I briefly recall the principal facts about the Government's activity in the national
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savings area over the last couple of years. In 1980–81, the Government announced a target of new inflows of £2 billion into the whole range of national savings instruments. That target was achieved—indeed, exceeded. For 1981–82 a target of £3 billion was announced in November 1980. It was later revised upwards to £3½ billion. With only a few weeks of the year remaining, it seems likely that once again the target will be reached. I understand that we are almost there at this moment.
These are large sums, and to attract them the Government have offered a wide variety of instruments to the personal saver. I do not propose to detail all the changes of the last couple of years, but the existing range of conventional and index-linked certificates, premium bonds, save-as-you-earn contracts and national savings bank accounts undoubtedly provides a number of attractive homes for personal savings, as the noble Lord, Lord Hill, made very clear to us.
For many years the market share, as it were, of national savings in the personal savings market had declined. In 1970–71, for example, 6·9 per cent. of personal sector assets were held with the Department for National Savings. The building societies accounted for 10·5 per cent. By 1979–80 these percentages had become 4·7 for the Department of National Savings and 18·2 for the building societies. And in spite of the £2 billion target the national savings share fell further in 1980–81. Figures for this year are not yet available, but even if they show a rise for national savings we shall still be a long way from the proportion DNS held until the 1970s.
What the Government have done, therefore, is not new. But what was the reason for these developments, and what effect have they had on housing finance? The principle advantage of funding the public sector borrowing requirement in this way is that it reduces the extent of the Government's reliance on the gilt-edged market, and hence eases the pressure on long-term interest rates. The reduction of interest rates is of course a major objective of policy. The high level of long-term interest rates we have seen in recent years has created a major problem for companies and has also incidentally kept companies out of the long-term debenture market.
The main reason rates have been as high as they have is that successive Governments have sold gilt-edged stock in the quantities needed to meet heavy borrowing requirements. It is important to try to reduce the pressure this puts on the long-term capital markets. The best way to do this of course is to reduce the borrowing requirement so far as is practicable, and I need not expand here on the measures the Government have taken to do so.
But another useful method is to fund the deficit, at least in part, in other markets. National savings is the most important alternative. Every pound attracted into national savings is a pound less to be borrowed in the gilt-edged market. A measure of the success of the national savings initiative is that sales of national savings have increased as a percentage of total net debt sales to the non-bank private sector from 12 per cent. in 1979–80 to a planned 35 per cent. this year.
But the Government fully recognise that they cannot allow themselves a completely free hand. The Government clearly enjoy a number of special advantages.

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Governments must, therefore, act in this area with proper regard to the effect on their competitors. If the Government were to compete over-aggressively for funds in the personal savings market, this could have adverse consequences for building societies who are heavily dependent on this market, and through them on housing finances in general.
The Government have kept these considerations very much in mind and I do not believe that in the event higher national savings inflows have, through their impact on other savings media, damaged the housing market. An important point to note here is that 1980–81 saw a substantial improvement in the financial position of the personal sector, in contrast to the corporate sector, and particularly a sharp increase in the level of discretionary personal saving. It therefore made sense to direct the funding effort to where money was accumulating. The financial surplus of the personal sector remained at a historically high level in 1981–82. Hence the Government have been able to attract inflows into national savings on an unprecedented scale without imposing an unacceptable squeeze on the building societies. The national savings instruments have completed vigorously but not unfairly, and the building societies have remained able to attract large inflows.
The Government propose to maintain this renewed emphasis on the role of national savings. It is a natural and proper development. For some years the national savings presence in the savings market had been allowed steadily to decline: indeed it was coming to be looked on almost as a relic of the past. The Government have now, in relative terms, restored the national savings' share of the savings market to its former levels before the decline occurred.
I should like to say a few words also about the other development in the housing market in recent months —the rapid growth of lending for house purchase by the banks, and particularly by the major clearing banks. The speed at which their lending for house purchase —which has been to some extent, as my noble friend remarked, facilitated by the removal of the "corset"—has grown in the last year has been quite striking, though it is worth remembering that the level of banks' participation in the housing market is not unprecedented: their present share of mortgages outstanding is not much above the level at the end of 1973.
This development brings additional competition to the housing finance market. Greater competition means more choice for customers, but of course it does represent a challenge to the building societies. It has been encouraging to see their response. A number of leaders of the building society movement have recognised the effect of this competition in ensuring the maintenance of a keen competitive edge.
It is too early to say how the building societies will respond to the challenge, or what the shape of the housing finance market will be in the future. It may be that the trend towards mergers will continue. Perhaps there will be a degree of rationalisation. But the Government are confident that the societies will respond in the most appropriate way. It is worth noting, in fact, that the outstanding stock of building society mortgages is up 15 per cent. on a year ago. They have an impressive record of assistance to the United Kingdom
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housing market and are certain to continue to make a major contribution to that market.
My noble friend asked me whether there was going to be legislation on the subject of building societies. As the previous Financial Secretary to the Treasury said in another place, the Government have no immediate plans to introduce legislation governing building societies. I understand that various bodies such as the Bow Group and the National Consumer Council have suggested that major legislation should be introduced governing societies to deal with such issues as their future role, their constitution, including the powers of the members, and the framework of prudential supervision. Societies are, however, facing changing times, and there is no consensus in the building society movement about the legislative changes they would like. Before seriously considering future legislation, the Government wish the public debate to continue from within, and also outside, the building society movement.
What does all this mean to the consumer? There is no doubt that the personal saver has benefited from the competition. The range of choice has clearly widened appreciably. The Department for National Savings now provides a large variety of instruments expressly designed with the interests of personal savers in mind. House purchasers, too, have benefited from the increased competition. They may pick and choose from a range of institutions offering different financing packages. There is also, in the Government's view, an overall benefit to the economy.
One of the major problems that we face is the overwhelming dominance of Government issues in the longterm capital market. Over the five years 1977 to 1981, the Government raised 90 per cent. of the long-term debt provided by the United Kingdom capital market. If the national savings initiative can help the Government reduce their dependence on that market so that there is more room for companies, it will be of general benefit.
The noble Lord, Lord Hill of Luton, chided the Treasury for their timing in their national savings instruments. I have to say to thim that these instruments have to remain competitive. The timing of changes is determined by movements in general interest rates and the savings markets. The changes in national savings instruments are not made without regard to the consequences.
The noble Lord, Lord Cledwyn, asked one or two rather difficult and technical questions, which I shall attempt to answer. The noble Lord referred to the ending of exchange controls. I suggest that that goes rather wide of the Question on the Order Paper. I would refer the noble Lord to the most recent edition of the Treasury's economic progress report, which analysed the issues in considerable detail. The noble Lord also asked about the number of houses being built. Like much of the rest of industry, house building has suffered from the recession, but there are encouraging signs for the future. The number of new buildings started increased steadily during 1981. Over the year as a whole, starts were 20 per cent. higher than in 1980 and over 120,000 new buildings were started in the year. The public expenditure plans for 1982–83 will allow local authorities to start and improve significantly more dwellings than in the current year.
I hope that I have answered all the questions I have

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been asked, but if I have not I shall, if I may, write to noble Lords. I should like to finish by saying to my noble friend that his Question concerns whether Her Majesty's Government will review their policy in this area. I think it is clear from what I have said that, in formulating their national savings objective, the Government keep very much in mind the condition of the housing market and the other factors to which my noble friend drew attention.

  SEWAGE SYSTEM: REPAIR AND REPLACEMENT COSTS
  SEWAGE SYSTEM: REPAIR AND REPLACEMENT COSTS
  MOTORWAY CONSTRUCTION: COST AND MANPOWER
  MOTORWAY CONSTRUCTION: COST AND MANPOWER
  ADMINISTRATIVE FORMS
  ADMINISTRATIVE FORMS
  SMALL BUSINESSES: INCENTIVES
  SMALL BUSINESSES: INCENTIVES
  PUBLIC DIVIDEND CAPITAL
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