Sitting of 5 July 1982

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

    Communications (Review)
    Sir Anthony Meyerasked the Secretary of State for Wales if he will undertake a review of communications in Wales in the light of British Rail's investment plans for the Principality.
    The Under-Secretary of State for Wales (Mr. Michael Roberts): My right hon. Friend the Secretary of State for Transport has ministerial responsibility for railways, but I keep the communication needs of Wales continually under review and am in regular consultation with my right hon. Friend.
    Sir Anthony Meyer: In the light of that reply, will my hon. Friend make it plain that while many thousands of jobs in Wales are not on the railways, they depend on the maintenance of a rail network in Wales? Will he also make it plain that the rail network is seriously threatened by ASLEF's actions? Will he appeal, and ask the Opposition to appeal, to as many drivers as possible to turn up for work to save the railways and jobs in Wales?
    Mr. Roberts: My hon. Friend is right. The strike could have a devastating effect on Welsh railways. The dreaded teredo worm in the Barmouth viaduct could be of scant
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    importance when compared with the threat of this strike. I appeal to all hon. Members to use their influence as best they can so that this pointless strike is ended quickly.
    Mr. Anderson: Does the Minister agree that some of us are a little puzzled by the reference to British Rail's investment plans in Wales, as the electrification of main lines has been put into cold storage because of the Government's rethink and as several valley and rural lines have been threatened by the Government's lack of investment in the railways?
    Mr. Roberts: My right hon. Friend is awaiting British Rail's proposals for the electrification of those lines that are potentially profitable. Everything depends on our Welsh railways being run at a high level of productivity and efficiency.

    Appointment to Public Bodies
    Mr. Wigleyasked the Secretary of State for Wales what criteria he uses, and what advice he seeks, in making appointments to nominated public positions in Wales which are within his authority to fill.
    The Secretary of State for Wales (Mr. Nicholas Edwards): I consult very widely with individuals and organisations to seek people who will provide public bodies in Wales with the range of knowledge, experience and ability that they require.
    Mr. Wigley: Does the Secretary of State recall that the previous Conservative Government replaced the chairman of Gwynedd area health authority with the Conservative chairman of the Conway constituency? Is he aware that there is widespread dismay in Gwynedd at the recent replacement of Mr. Idris Davies, especially as he stood up to the Welsh Office about the delay with the Bangor hospital? Is he further aware that the present appointment smacks once again of political appointment and that the people of Gwynedd are fed up with it?
    Mr. Edwards: The new chairman of that authority has been a member of it for the past eight years and a deputy chairman for several years. There can, therefore, be no question about her contribution to the authority. In the

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    light of the speech of the hon. Member for Merioneth (Mr. Thomas) in the most recent sitting of the Welsh Grand Committee, the hon. Gentleman's suggestion smacks of a new sexist policy from Plaid Cymru.
    Mr. Stokes: When my right hon. Friend makes appointments, will he consider from time to time retired officers from Her Majesty's Forces, including officers from the famous Welsh regiments? Is he aware that many of them have great leadership qualities and wide experience of command both at home and abroad?
    Mr. Edwards: I consult widely and invite all types of organisations and individuals to submit names, as we need the names of as many qualified people as possible. No doubt some of them will be retired serving officers. As it happens, I have just approved the appointment of a retired officer from a Welsh regiment, which will be announced shortly.
    Mr. D. E. Thomas: Is the right hon. Gentleman aware that there is widespread anxiety in Gwynedd that those who have been appointed recently to the national park committee have clear Conservative interests but perhaps no clear conservation interests?
    Mr. Edwards: The appointments that I have made since becoming Secretary of State show that in the wide range of organisations concerned I have by no means confined my appointments to Conservatives. Indeed, I was strongly attacked and criticised at the Conservative conference last month for not doing so. I defended my record on the ground that it was right to appoint the best candidates irrespective of their political colour.

    Unemployment Statistics
    Mr. Ioan Evansasked the Secretary of State for Wales what are the latest figures of the number of people who are unemployed in Wales, Mid-Glamorgan and Aberdare; and how many of these have been unemployed for more than two years and one year, respectively.
    Mr. Nicholas Edwards: On 15 April 1982, the latest date for which such figures are available, unemployment totalled 171,349, 32,815 and 3,814 respectively, of whom 21,473, 4,413 and 572 had been unemployed for more than two years and 59,658, 11,452 and 1,423 had been unemployed for more than one year.
    Mr. Evans: In view of the announcements that 900 jobs will be lost at Hitachi-GEC in the Aberdare area and that 1,200 jobs are to go at BP and 300 at Panteg, and since it looks as though Nissan-Datsun will not be coming to Wales, will the Government reconsider the policies that they have been pursuing, which have led to these increases in unemployment? Will the Minister also restore to my constituency the special development area status, the removal of which has adversely affected the maintenance of existing manufacturing jobs as well as the attraction of new ones to the valley.
    Mr. Edwards: I warned the House in a debate, I believe, in May that major redundancies might be coming. Nevertheless, the number of redundancies has fallen quarter by quarter, and the increase in unemployment in Wales has been less than in any other region in the United Kingdom. Indeed, it was the only region in which the number out of work fell in the last month.
    With regard to development area status, we have just conducted a review and we shall of course keep the matter
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    under further review during the coming years. However, I do not think that one should make changes simply because of one or two individual redundancy announcements.
    Mr. Rowlands: Does the right hon. Gentleman accept that there is not a shred of evidence of any upturn in manufacturing output in our constituencies, not only in terms of the production of goods, but in sales and marketing? Does he agree that that confirms the depressing CBI report on manufacturing? As he has not commented on the fact that the Nissan project seems to be disappearing into the distance, what new initiatives will he take to create new jobs and to bring new firms to the valley constituencies? Is he aware that not one new firm has come to Merthyr in the past three years?
    Mr. Edwards: Current economic factors make it clear that the level of imports is still too high. That results, of course, from the striking loss of competitiveness in the late 1970s and early 1980s. It is therefore vital that we continue to improve competitiveness. Industrial disputes such as that on the railways clearly will not help.
    With regard to job creation, we brought a record number of new firms and new jobs to Wales last year. Moreover, I am glad to say that, despite the difficult economic conditions, the number of new factory allocations this year is almost 50 per cent. higher than last year's record level for Wales.
    Mr. Alec Jones: We welcome the return of the Secretary of State after his illness, but is he aware that in the short time that he has been absent, taking account of the job losses mentioned by my hon. Friend the Member for Aberdare (Mr. Evans), Wales has lost more than 3,000 jobs—that is in the past two weeks? Does the Secretary of State recall that in a recent debate he listed a number of factories that were coming to Wales? Does he realise that we have lost an equivalent number of jobs in those two weeks? Is it not time that he produced the balance sheet so that we can see whether any progress is being made in providing employment, for our people? Does he accept that unemployment, particularly long-term unemployment, is becoming more serious every day that he remains in office?
    Mr. Edwards: I in no way underestimate the problems. Nevertheless, Wales was the only region in the United Kingdom in which, despite the influx of school leavers, the number of people out of work fell. The number of redundancies is sharply down on last year and has been falling quarter by quarter, even with the recent very unwelcome announcements that I foreshadowed in the debate to which the right hon. Gentleman referred. I repeat that last year we attracted a record number of new projects for Wales, more than was ever achieved under the Labour Government, and for this year the figures are almost 50 per cent. higher.
    Several Hon. Members rose—
    Mr. Speaker: Order. Questions Nos. 6 and 8 both raise this matter again.
    Mr. Evans: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

    Dee Barrage
    Mr. Altonasked the Secretary of State for Wales if he will study the feasibility of a Dee barrage as a method of producing energy and providing a land bridge from North Wales to Merseyside.
    Mr. Michael Roberts: We have no plans for further studies at present.
    Mr. Alton: Will the Minister reconsider that decision, particularly in view of the great economic benefits that would accrue from such a land bridge and barrage on the Dee? Will he also consider asking Bangor and Liverpool universities to undertake a joint study of the environmental implications of such a project?
    Mr. Roberts: The reports in 1971 and 1974 considered schemes to provide a road crossing and an additional water supply, and the tidal energy potential of the Dee was discussed in a report in 1980. None of those amounts to a convincing case for a barrage. As regards the provision of a land bridge, any barrage would need to be situated too far north to make ready use of the existing road network and would require substantial new investment in road links.
    Sir Anthony Meyer: Is my hon. Friend aware that although many of the arguments of the early 1970s are no longer valid, the argument for an additional crossing is stronger than ever? Will he consider that on its merits?
    Mr. Roberts: Certainly the North-East Clwyd traffic study published in 1980 concluded that traffic flows at the Queensferry crossing will have reached critical levels at peak periods in the early 1990s. This is a matter for the local authority and I understand that further studies are taking place.

    European Regional Development Fund
    Mr. Knoxasked the Secretary of State for Wales what is the value of the grants allocated to Wales from the European regional development fund in each of the past three years.
    The Under-Secretary of State for Wales (Mr. Wyn Roberts): Grant commitments for 1979, 1980 and 1981 were £21·7 million, £32·5 million and £24·8 million respectively.
    Mr. Knox: Will my hon. Friend tell us whether funds come to Wales from other EEC sources? If so, what is the total amount of EEC help to Wales?
    Mr. Roberts: My hon. Friend is right. There are, of course, grants from other sources. The total of grants and aid to Wales is now £968 million. Moreover, that is not all, as there are sources of aid which cannot be disaggregated regionally. If those were taken into account, the total might be well over £1,000 million.
    Mr. Alec Jones: To balance those figures of grants and assistance from membership of the EEC, does the Minister agree with the Financial Secretary that between January 1973 and June 1981 membership of the EEC cost Britain a net sum of £3,166 million? Is he aware that that works out at £1 million per day? How much of that was contributed by the people of Wales, and what on earth have we received in return?
    Mr. Roberts: I am surprised to hear the right hon. Gentleman denigrating our membership of the EEC, in view of the considerable benefits that Wales has received in inward investment and in jobs resulting from that.
    Mr. Roy Hughes: Would it not be better for the Government to invest in Wales in the first instance than to pay huge sums to the Common Market, a tiny proportion of which is then clawed back and a part of that is then handed out to Wales as some kind of charity contribution?
    Mr. Roberts: As the hon. Gentleman surely knows, the very good figures for grants and aid from the EEC do not compare in magnitude with the total of Government grants and aid to Wales. The hon. Gentleman should certainly know that, as his own constituency has greatly benefited. In fact, of course, it is the inward investment that comes to Wales as a result of our membership of the EEC that is so very important.
    Mr. Wigley: Is the Minister aware of the report in the Western Mail, today of the social work undertaken by Mr. Peter Halstead of the Polytechnic of Wales? That report shows that the European regional fund has had only a minimal impact on areas such as Wales, and that 100 times more money is spent on items such as milk and wheat? Does the Minister agree that the Government should be pressing for many more funds to go to regional aid than in other directions?
    Mr. Roberts: Increased assistance would, of course, be welcome, but it is always easy to say that the answer to all our problems is to throw more money at them. I am not sure that that is always the case. I believe that the best use should be made of available resources.
    Sir Anthony Meyer: Is there not considerable confusion by the Opposition on this matter? Does my hon. Friend agree that in terms of budgetary contributions Wales does very well on the whole, in that it receives more than its fair share? Does my hon. Friend further agree that the real argument is for inward investment and a larger share of the home market?
    Mr. Roberts: My hon. Friend is right. The European market consists of about 270 million people. The most telling fact is that the proportion of our exports to Europe has risen from 30 to 43 per cent. of the total.

    Unemployment and Job Creation
    Mr. Roy Hughesasked the Secretary of State for Wales how many people were unemployed in Wales in June 1980 and 1982, respectively; and how many jobs have been created in the same period.
    Mr. Nicholas Edwards: Seasonally adjusted, and excluding school leavers, the figures were 96,100 and 162,000 respectively. It is not possible to provide comprehensive estimates of jobs created in both the public and private sectors.
    Mr. Hughes: Does the Secretary of State recall that, following the British Steel Corporation's slimline operation at Llanwern, he promised on 1 April 1980 a package of aid to Newport that would provide 2,000 jobs? Is he aware that so far fewer than 1,000 of them have materialised? On the second stage of development that was also promised, the Secretary of State is showing all the

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    eloquence of a Trappist monk. Is he aware that the people of Newport are fed up with the Government because jobs are not being provided, and that they want something more than fairy stories?
    Mr. Edwards: The hon. Gentleman refers to fairy stories. Special funds amounting to about £59 million in cash terms have been made available for the Port Talbot and Llanwern areas under the special arrangements to which the hon. Gentleman referred. In the Llanwern area about 820,000 sq ft of factory space will be available by the end of this financial year, with about 682,000 sq ft within the Newport travel-to-work area. I do not consider those figures to be fairy stories. There is a continuing programme of development, and the Welsh Development Agency is continuing that programme in the current year. It will be spending £6 million or £7 million in the area this year on top of what has already been spent—and that does not include the contribution of the Cwmbran development corporation. The truth is that very few parts in the whole of Britain have received such substantial financial backing as the hon. Gentleman's constituency. It has received a great deal more than it ever received under a Labour Government.
    Dr. Roger Thomas: Will the Minister comment on the Cinderella sector of employment in Wales—the construction industry—where one man is out of work for every two men in work? What effect does the Minister think this will have on the young trained people in the carpentry, plumbing and bricklaying trades in Wales?
    Mr. Edwards: Clearly, the greater the industrial activity the better. I have no doubt that a great deal of employment is being provided by the construction programme to which I have just referred. The total construction programme now being undertaken by the Welsh Office, including the massive programme of hospital, road and factory building, is by far the largest capital programme ever to be undertaken in the Principality.
    Mr. Alec Jones: As the Secretary of State is unable to provide the figures for the number of jobs created in the private and public sectors, will he confirm that the number of people in employment in Wales has fallen by 127,000 since he became Secretary of State for Wales? Does the right hon. Gentleman agree that that figure confirms that the Government have destroyed more jobs in three years than were created during 21 years of regional policies under successive Governments? Since the right hon. Gentleman was so reticent about Nissan on an earlier question, will he now say whether he sees any prospect of Nissan coming to Wales?
    Mr. Edwards: Representatives of the company are to visit this country later this month. My hon. Friend the Under-Secretary of State for Industry was recently in Japan and had discussions with Nissan. He has no information to confirm the speculative press reports that Nissan has decided not to go ahead with the project. Discussions are continuing about the project, but it will be for the company to decide, in the light of its assessment, whether to go ahead and, if so, on what scale and at what location.

    European Community Aid
    Mr. Geraint Howellsasked the Secretary of State for Wales if he is satisfied with the present level of financial aid given to Wales from the EEC funds; and if he will make a statement.
    Mr. Nicholas Edwards: I regard the commitment of nearly £1 billion in identifiable European aid since accession as a very valuable contribution to the development of the Principality. My Department will continue to take every opportunity to ensure that Wales continues to derive the maximum benefit from the available Community aids.
    Mr. Howells: I thank the Secretary of State for that reply. However, does he agree that if Wales is to survive and grow power must be devolved from Westminster to Wales, and that Wales must remain a member of the EEC?
    Mr. Edwards: I entirely share the hon. Gentleman's view on membership of the EEC. As regards devolution, we probably have different views on the method to be adopted. It is clear that under this Government there has been a further extension of responsibilities to the Welsh Office, including the major responsibility for local government. That is the way forward. It is certainly the way chosen by the people of Wales by an overwhelming majority in the referendum.
    Mr. Wigley: As only £276,000 of the recent £15 million regional development grant package for Wales was allocated to Gwynedd, will the Secretary of State say why Gwynedd is missing out on these funds? Is it because Gwynedd is not submitting suitable applications, or is it because the Welsh Office is turning them down?
    Mr. Edwards: I have not looked at Gwynedd, but I have had the same sort of complaint from other counties. In the cases that I have looked at the counties have not put forward sufficient projects, or projects of the right quality. I emphasise the desirability of counties examining the possibilities that are open to them. The Welsh Office will give them every possible encouragement in preparing schemes in the best possible way. If applications to the Commission are likely to succeed, we shall put them forward.

    Unemployment Statistics
    Mr. Barry Jonesasked the Secretary of State for Wales by what amount and by what percentage unemployment in Wales has risen since May 1979; and if he will make a statement.
    Mr. Nicholas Edwards: Between May 1979 and June 1982 unemployment, seasonally adjusted and excluding school leavers, increased by 80,600, or 99 per cent.
    Mr. Jones: Does the right hon. Gentleman understand that Olives paper mills at Greenfield made 100 men and women redundant soon after his meeting there, when hopes were expressed that the mill would stay in business? Why was the grant offered by his Department so low? As regards Nissan, was, or is, Shotton on the short list of possible sites?
    Mr. Edwards: I do not know what view Nissan has taken about sites.
    I have been in touch with the Olives paper mills company. The financial director was specifically asked by

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    a member of my Department why the company had decided to abandon the project. The financial director said that he was not at liberty to add anything to the statement that had been issued, but he could confirm that the decision had nothing to do with the amount of section 7 grant offered. He told my officials that he had been approached earlier by Granada Television, who had asked whether lack of support from the Welsh Office had caused the company to change its mind. He said that he had made it clear to Granada that the decision had nothing to do with negotiations with the Welsh Office.
    Mr. Ioan Evans: Is it not a shocking indictment of the Government that unemployment should have doubled in three years? Does the right hon. Gentleman hope that by the next election unemployment will have been reduced to its level when the Government took office? Is there not need for a change in the economic policies that have added to the recession and created unemployment in many of the valleys of South Wales?
    Mr. Edwards: I regret that unemployment under successive Governments has risen over the past 15 or 20 years and that the figure more than doubled under the previous Labour Government. Through improvements in competitiveness and productivity we shall regain our position. There is no simple and easy answer. Although matters are serious, and especially serious in Wales, I am glad that unemployment has risen less there than in any other region of the United Kingdom.

    Panteg Steelworks
    Mr. Abseasked the Secretary of State for Wales if he has now had discussions with the British Steel Corporation on the future of the Panteg steelworks; and whether he will make a statement.
    Mr. Nicholas Edwards: I have been in touch with the chairman, and he has explained the corporation's reasons leading to the decision announced last week to reduce manpower levels at the plant. The decision is one for the commercial judgment of the corporation.
    Mr. Abse: Is the Seretary of State aware that Sir Charles Villiers, accompanied by Mr. MacGregor, gave confident predictions to the Seclect Committee two years ago claiming that £150 million invested in stainless steel provided assurances for the future of Panteg? In view of the clear managerial blunders at the top, which are revealed by this decision to reduce the numbers by 300 in an area of almost chronic unemployment, does the Secretary of State not think that instead of adopting a supine position he should be ordering an inquiry into why such massive investment should now be—we are told—absolutely useless? How can the Secretary of State expect to gain the co-operation of work forces when decisions such as this are taken by managements? How can reliance be placed upon people who give assurances one year and tear them up the next?
    Mr. Edwards: I have checked on the assurances that Sir Charles Villiers gave to the Select Committee. I cannot be responsible for what he said. His answer was in response to a question from the hon. Member about hiving off. Sir Charles made it clear that the BSC, having invested £140 million in the stainless steel operation, wished to continue making stainless steel and that Panteg had an essential role in that operation. The present
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    chairman of the British Steel Corporation has written to the hon. Gentleman pointing out the present state of the European market, the lack of demand and the enormous over-capacity. This is on a European and world-wide basis. As he says:
    "In these serious market conditions, it would not he sensible to prophesy beyond the short term. To that extent it would be irresponsible of me to make promises or offer indefinite guarantees as to the life of the Panteg works or the jobs available within that operation."
    No manager of any commercial organisation can give guarantees about future employment in companies that depend upon sales.
    Mr. Coleman: Will the right hon. Gentleman assure the House, in the light of the disaster that has overtaken the Panteg works in particular, and Gwent in general, that he will prevent any further pandering to sectional interests in the steel industry which is to Britain's detriment, especially in respect of the cold-rolled narrow steel strip market? Will he take steps to ensure that the same fate does not befall Whitehead's works, which is bigger and more efficient than any other in the country and our best producer of cold-rolled narrow strip?
    Mr. Edwards: No one within the company or on the Government Benches can give guarantees about employment levels in any commercial organisation. The Government are fully committed to securing the best possible defence of the British steel industry's interests in regard to the United States action and actions being taken in the EEC. The European Commission and the Government are objecting to the United States countervailing duties on United Kingdom steel with all possible force. The company is considering the legal position. Both the company and the Government will continue to defend robustly the interests of the British steel industry in international markets.

    BP Chemicals (Redundancies)
    Mr. Andersonasked the Secretary of State for Wales what action he proposes to counter the effects on West Glamorgan of the proposed redundancies at BP Chemicals, Baglan Bay.
    Mr. Ray Powellasked the Secretary of State for Wales if he will take steps to alleviate the problems resulting from the proposed redundancies at BP Chemicals in Barry and Baglan Bay; and what effect these redundancies will have on unemployment in South, Mid and West Glamorgan.
    Mr. Nicholas Edwards: I regret the redundancies announced at BP, which will add to current difficulties in the areas affected. However, a wide range of measures are already being undertaken in these areas to attract and develop industry and employment and these will continue.
    Mr. Anderson: Does the Secretary of State expect to introduce any new measures as a result of these decisions? The right hon. Gentleman must recall that when the decision was made in July 1979 to downgrade many areas in Wales this was Presumably done on the basis that they no longer needed help and could be self-sustaining. Since that time, male unemployment in the Swansea area has increased two and a half times. Now there is this further blow at Baglan Bay. What further evidence does the Secretary of State need before he takes new measures?
    Mr. Edwards: The unemployment that results from this decision by BP will be spread widely over a considerable area. I do not believe that it will have an effect on unemployment levels such that would lead one to consider a substantial change in regional development area decisions at present. However, in the light of the announcement, I shall be discussing with the Welsh Development Agency its programme for the area. I shall be considering whether any further action is necessary. I am in the closest touch with the company about its project for the river works and the necessary works to ensure the continuing operation of the Baglan site.
    Mr. Powell: Will the Secretary of State come clean on the issue? The right hon. Gentleman talks about new measures to be introduced in Wales and in the area that we are discussing. He has also referred to the fact that redundancies fell last month. Yet attention has been drawn to 3,000 redundancies occurring in one week. What new measures does the right hon. Gentleman intend to introduce to combat the escalation of redundancies throughout Mid-Glamorgan and South Wales?
    It appears not that the market is bottoming-out, but that the bottom has dropped out of the market. No jobs are becoming available. It is time that the Welsh Office and the Government took some action.
    Mr. Edwards: We have ensured, in the wider Port Talbot area, that about 880,000 sq ft of factory space will be available by the end of 1982–83 and that some other substantial construction will take place in the current year. We shall continue with that programme. I am also delighted that Councillor Tyssul Lewis, the lord mayor of Swansea and leader of the council, has given a firm rebuttal to the comments of the hon. Member for Swansea, East (Mr. Anderson) on the enterprise zone. He has said that the hon. Gentleman is wrong and that the enterprise zone is
    "a real bargain. Ogmore MP Mr. Ray Powell need have no worries. The Swansea enterprise zone is proving the enterprise zone idea to be highly credible".
    Mr. Coleman: Do not the redundancies at Baglan Bay undermine the Government's argument that regional aid must be based on travel-to-work areas? Is the right hon. Gentleman aware that, although the plant is in a special development area, the work on the jetty that will be required to secure the future of the plant is in the Neath river, which is outside the special development area? Will he examine this matter again? The right hon. Gentleman took away from Neath river area the special development area status that it formerly enjoyed.
    Mr. Edwards: There is to be a meeting later this week on this matter with my hon. Friend the Under-Secretary. However, I can tell the hon. Gentleman that most of the expenditure on the project to which he has referred will take place within the SDA boundary. The small part falling within the estuary area is not, in any case, eligible for rural development grant. I think that the hon. Gentleman has the wrong information. The company has been and is in close touch with the Department of Industry on this problem.

    Urban Development Grants Scheme
    Mr. Gristasked the Secretary of State for Wales if he will make a statement about the operation of the urban development grants scheme in Wales.
    Mr. Michael Roberts: The aim is that urban development grant should become available in Wales in 1983–84. It will assist urban development projects worked up jointly by local authorities and the private sector, in which the private sector is taking a significant share. An explanatory circular has been sent to all Welsh local authorities asking them to submit schemes by 30 September.
    Mr. Grist: Can my hon. Friend give an undertaking that local authorities will forward such schemes and take an active part in promoting them? Can he also give an undertaking that the schemes will not be held up by unnecessary bureaucratic red tape?
    Mr. Roberts: I can give no undertaking that local authorities will take up the schemes. I attended a conference in Cardiff, at which local authorities seemed to be enthusiastic, so I expect that there will be a good take-up. I assure my hon. Friend that my officials will give all the help and advice that they can, and I hope to be able to announce my decision within three months of the closing date for applications.

    Pollution Control (Beeches and Bays)
    Dr. Roger Thomasasked the Secretary of State for Wales if he is satisfied with the progress being made in the removal of pollution from beaches and bays of the Principality.
    Mr. Wyn Roberts: The Welsh water authority has a programme of works in hand to reduce pollution. The position in the Swansea Bay area has been particularly closely monitored since 1974, and there is no evidence of any significant change since then. Nevertheless, the timing of discharges from the Mumbles sewage outfall has already been improved, and some £1·2 million of further work will start next year.
    Dr. Thomas: Would the Minister care to tell us how many years it will be before Swansea Bay has the hygiene standards and disease reputation of the Bay of Naples?
    Mr. Roberts: I have just told the hon. Gentleman of the improvements that we have in mind and, as I know the Bay of Naples, I can tell him that Swansea Bay will never be as bad as the Bay of Naples.

    Local Government Finance (Welsh Consultative Council)
    Mr. Alec Jonesasked the Secretary of State for Wales what representations he has had from the Welsh Consultative Council on Local Government Finance.
    Mr. Nicholas Edwards: The Welsh Consultative Council on Local Government Finance, which I normally chair, meets regularly throughout the year to consider all financial and related matters affecting local government. The Welsh local authority associations' representatives ensure that I am fully aware of their views on all these matters.
    Mr. Jones: Are the local authorities in Wales expected, in the current financial year, to reduce their budgets by £57 million? Does this not represent about 4·8 per cent. of expenditure? How does this compare with the so-called overspend in England and Scotland? What effect is this likely to have on local authority manpower in Wales and, above all, on the services for the people in Wales?
    Mr. Edwards: The budgets at present show a total planned expenditure of £57 million, or 4·8 per cent., in excess of the rate support grant provision. I have told the local authorities that we are not prepared to accept overspending on that level and I have asked them to review their budgets and to submit revised budgets by 16 July. When I have those revised budgets, I shall consider whether any further action is necessary. My decision on grant witholding, if any is required, will be taken in the light of that re-submission, although I have made it clear that I shall protect those authorities that have not contributed to the expenditure excess.

    Housing Statistics
    Mr. Colemanasked the Secretary of State for Wales how many houses were completed in Wales in each of the past three years; and what is his estimate of the number likely to be completed in 1982.
    Mr. Wyn Roberts: The total number of houses completed in Wales in 1981 was 8,936, compared with 10,349 in 1980 and 11,265 in 1979. It is not possible to make a reliable estimate of the total number likely to be completed by the end of 1982, but there were 1,804 completions in the first quarter.
    Mr. Coleman: There has been an obvious and progressive decline in house building in Wales under this Government. How many people have been registered as homeless with the local authorities in Wales in each of the past three years? How does the Government's policy of compulsorily selling council houses help to alleviate the problem of homelessness, which is rapidly worsening in Wales?
    Mr. Roberts: The hon. Gentleman has asked me for the number of homeless people, but that requires a completely different set of figures. I shall be happy to supply him with the information if he tables a question to that effect. The hon. Gentleman knows that the sale of council houses makes no difference whatsoever to the total housing stock available. If secure tenants who bought their homes had not done so, they would have remained in those houses as tenants. I am particularly glad that as many as 14 per cent. of council tenants in Wales have applied to take up the right to buy, and that 28 per cent. of those who have applied have completed their purchases and are now owner-occupiers.
    Mr. Wigley: On a point of order, Mr. Speaker. In view of the Secretary of State's lengthy answers and the fact that not all the questions have been answered, might it be possible to consider giving a full hour to Welsh Questions in future?
    Mr. Speaker: Not today.

  CHURCH COMMISSIONERS

    Beneficed Clergymen (Conditions of Service)
    Mr. Greenwayasked the hon. Member for Wokingham, as representing the Church Commissioners, if he will make a statement on the conditions of service of beneficed clergymen.
    The Second Church Estates Commissioner, Representing Church Commissioners (Sir William van Straubenzee): For the year from 1 April 1983, the Church Commissioners, as central stipends authority, have recommended a national minimum stipend for incumbents of £6,050 per annum. In addition to his stipend, an incumbent is provided with a house free from rent, rates, repairs and insurance.
    Mr. Greenway: I thank my hon. Friend for that reply and congratulate him, and those whom he represents in this matter, on the improvement that that represents. Will he assure me that the heavy cost involved in that improvement will not be a bar to additional future recruitment? Is he aware that, in a job that involves heavy expenses, despite these improvements, many clergymen are hard up and have to take a second job, let rooms in their houses or send their wives to work, or do all these things, to make money? Is he further aware that this is a difficulty that hampers the full performance of a clergyman's important job?
    Sir William van Straubenzee: I am obliged to my hon. Friend. His words will give much encouragement to those concerned. I have never heard any discussion on the subject of recruitment limited by considerations of payment. The proportion of the moneys that we are discussing in terms of stipends now being produced by the laity increases each year and will be an increasing burden which I am sure the laity will willingly accept. Expenses are essentially a matter for the parish concerned, but the Church Commissioners' lead has always been that the legitimate expenses of a man in office should be paid by those whom he looks after in the parish.
    Mr. Stokes: In view of the improvements in the pay of clergy, can my hon. Friend tell me whether sufficient provision has now been made for the pensions of the widows of clergymen?
    Sir William van Straubenzee: I hesitate to use the word "sufficient", but I can faithfully report great improvement. A widow receives half her husband's entitlement. There are provisions if her income is below a certain minimum level and for helping with housing. There are discussions this week in the General Synod about measures designed to improve the proportion of the pension for a wife who is widowed while her husband is in service or afterwards.

  HOUSE OF COMMONS

    Reports and Documents
    Dr. Brayasked the the right hon. Member for Middlesbrough, as representing the House of Commons commission, if the Commission will make it its practice to adopt the ususal Select Committee format for its reports and publish will them the evidence, including memoranda, it receives and its minutes of proceedings.
    Mr. Arthur Bottomley: No, Sir.
    Dr. Bray: Will the Commission publish the correspondence and memoranda that it has received from right hon. and hon. Members, the Treasury and any other party regarding the request to the Treasury and Civil Service Committee to pay £75,000 a year for work that needs to be done on the review of the economy, so that the House can be reassured that the Commission is adequately

    15
    discharging its responsibility to the House and is not protecting the Treasury from the proper review of its policies by a Committee of the House?
    Mr. Bottomley: This is a matter that cannot be handled by a question and answer. The Secretary of the Commission has sent a letter to my hon. Friend, and I suggest that he follows the matter up by answering that correspondence.
    Mr. English: I appreciate what my right hon. Friend says and I agree that this is a matter that cannot be handled by question and answer. However, why has the Commission been frightened to have its annual report debated for three successive years? As the Commission contains the Leader and the Shadow Leader of the House, it can hardly be claimed that time could not be made available. It is simply sheer fright that causes the Commission not to wish itself to be debated on the Floor of the House.
    Mr. Bottomley: Personally, I should welcome a debate on the report, but this has never been pursued by hon. Members on either side.
    Mr. English: It will be.
    Dr. Bray: The right hon. Gentleman will appreciate the difficulty, both of the Commission and hon. Members, when the Commission apparently reaches conclusions on evidence submitted by Government Departments which is not available to hon. Members giving evidence in the Commission, whereas evidence from hon. Members is available to Government Departments. Is this not a gross neglect of the Commission's duties to the House?
    Mr. Bottomley: With respect, it is not. The Commission has to handle matters of a delicate and personal nature which concern those employed in the House. If we started to discuss matters of that kind, it would do harm to those involved.

  EDUCATION AND SCIENCE

    Victoria and Albert and Science Museums
    Mr. Robert Atkinsasked the Secretary of State for Education and Science when he proposes to implement the Rayner recommendations on the future of the Victoria and Albert and Science museums.
    The Minister of State, Department of Education and Science (Mr. Paul Channon): As I told my Friend the hon. Member for Brighouse and Spenborough (Mr. Waller) on 27 May, the Government have accepted the recommendation of the Rayner scrutiny that the Victoria and Albert and Science museums should cease to be departmental museums. We shall be seeking an early opportunity to introduce legislation to establish separate bodies of trustees to manage and control each museum. Decisions on the other recommendations will be taken after the consultations are over.
    Mr. Atkins: Will my right hon. Friend give an assurance that he will not abandon the theatre museum project, which is based in the Victoria and Albert museum, because it would be a tragedy not to remain committed to it, even if we cannot go ahead in the immediate future?
    Mr. Channon: I shall certainly consider what my hon. Friend has said. We are holding widespread consultations on this matter, and the views of hon. Members will be very welcome.
    Mr. Montgomery: Will my right hon. Friend bear in mind that if the theatre museum were allowed to charge for admission it would not be a drain on public funds? Could not the project go ahead on those lines?
    Mr. Channon: One of the suggestions in the Rayner scrutiny is that the museum should be self-supporting. The Government are also considering that. I shall bear in mind my hon. Friend's point.
    Mr. Murphy: Does my right hon. Friend agree that the implementation of these proposals might pave the way towards the sensible introduction of charging, as Rayner suggests?
    Mr. Channon: The Government have decided that it would be wrong to prejudge any proposals that the future trustees may put forward. Certainly I should not wish to impose charges against the trustees' wishes. If they come forward with sensible suggestions, the Government will consider them on their merits.
    Mr. Whitehead: Does the Minister agree that one of the problems of implementing the unacceptable face of the Rayner report—the proposal that there should be charges for viewing all, or part, of the collections in those museums—is that it will resurrect one of the previous Conservative Government's most bankrupt and discredited policies? We had hoped that he would be civilised enough to realise that if museums charge for admission, those whom we most want to encourage will be discouraged.
    Mr. Channon: It is very nice to welcome the hon. Gentleman to his new position, but, with great respect, his first question does not show a realisation of the facts. Charges are already made in large portions of our museums. Local museums have been able to charge for years, and outstations and special exhibitions in the national museums have charged for many years, under both Governments.

    Public Lending Rights (Register)
    Mr. Madelasked the Secretary of State for Education and Science when the register for public lending rights will be open for authors to register their books.
    Mr. Channon: On 1 September.
    Mr. Madel: As it is understood that several European countries are to introduce similar public lending rights schemes, will my right hon. Friend consider extending our scheme on a reciprocal basis, so that British authors can benefit?
    Mr. Channon: The only country in Europe that I know of that has a similar scheme is West Germany. We shall readily examine whether it is possible to have a reciprocal arrangement with West Germany. The question raises many difficult legal issues, but I am having it examined.

    National Arts Day
    Mr. Freudasked the Secretary of State for Education and Science, pursuant to his answer to the hon.

    17
    Member for Isle of Ely on 9 March, Official Report, c. 382, what supporrt he gave to National Arts Day; and if he will make a statement.
    Mr. Channon: This was organised by a group of private individuals. I sent them a message of support, attended the press conference they organised on the day and a number of other events.
    Mr. Freud: While that is clearly a welcome and auspicious beginning, will the Minister consider throwing even more weight, and possibly even some money, behind next year's effort? Does he not agree that if we can afford a goose ecologist in the Falkland Islands, it might be a good idea to have a centrally funded National Arts Day coordinator in Britain?
    Mr. Channon: If there is genuine public demand for that, there is much sense in what the hon. Gentleman says. On the other hand, if the whole thing is a waste of time it would be a mistake to encourage it any further.
    Mr. Jessel: Was not National Arts Day a gigantic flop that failed to have any impact? If it cannot be better run, would it not be better to drop it?
    Mr. Channon: It should be better run or dropped. I am not criticising the organisers, but it should either be more centrally organised and have some impact, or it should be abandoned. I should welcome views on the matter and hope to discuss the matter with some of the organisers in the near future.
    Mr. Blackburn: On reflection, does my right hon. Friend agree that National Arts Day did for the arts what Larry Grayson has done for rugby football? Will he give an undertaking not to become involved in National Arts Day unless it is better organised? Is my right hon. Friend aware that few hon. Members, including the Conservative Party arts and heritage committee, had any knowledge of National Arts Day?
    Mr. Channon: I sense that in some quarters of the House National Arts Day was not regarded as a howling success. I shall bear that in mind.

    Royal Academy (Grants)
    Mr. Chapmanasked the Secretary of State for Education and Science what grants have been made to the Royal Academy during the last five years.
    Mr. Channon: I announced in May the Government's decision to contribute £250,000 to the Royal Academy's appeal fund in the course of the next year or so. No other direct Government grant has been paid to the Royal Academy during the past five years.
    Mr. Chapman: Is it not true that throughout its long and glorious history the Royal Academy has rightly prided itself on being independent of the Government? Will my right hon. Friend confirm that this year's grant is a onceand-for-all grant? Will he use his good offices to try to encourage private finance—whether from industry, commerce or other sources—into this great national institution?
    Mr. Channon: Yes, Sir. The whole point of the Royal Academy is that it is independent. It has launched an appeal fund for £6 million. I understand that nearly a quarter of that amount—or perhaps a little more—has been
    18
    raised, and I wish the Royal Academy every success. The Government help in other ways, such as with the indemnity insurance scheme. However, the Royal Academy rightly prides itself on 200 years of independence.
    Mr. English: I am not clear about the consequences of the Minister's replies to question No. 25 and this question. Does he propose that some members of the Royal Academy should now be appointed by the Government, or that some of the trustees of the Victoria and Albert and Science museums—if they are set up—should be elected by their staff?
    Mr. Channon: With the greatest respect, the hon. Gentleman has got the two questions slightly mixed up. There is no question of the Government wishing to interfere in any way with the running or organisation of the Royal Academy.

    London Theatre (Funding)
    Mr. Peter Lloydasked the Secretary of State for Education and Science what is the present level of funding for the theatre in London.
    Mr. Channon: Relevant expenditure by the Arts Council was just under £9 million in 1981–82.
    Mr. Lloyd: I am grateful to my right hon. Friend for that reply. Is he aware that there is great satisfaction about the fact that the Old Vic looks as though it will receive a new lease of life without recourse to Exchequer funds? However, is my right hon. Friend satisfied that the other bidders for the theatre's management had a proper chance to succeed in their bids?
    Mr. Channon: In this case, it was a matter for the Charity Commissioners to decide. It is their job to guide the trustees as to which offer should be accepted. That is for them to decide and it is not for the Government to intervene. I share my hon. Friend's view that it is important that the Old Vic should reopen. I am very glad that that is to happen.
    Mr. Robert Sheldon: Has the Minister seen the memorandum issued by the Economic Secretary to the Treasury on 29 June in reply to the third report of the Education, Science and Arts Committee, concerning VAT and the theatre, in which he completely fails to understand the impact that doubling VAT has had on the theatre? If the Economic Secretary is not aware of the problems, will the Minister bring himself to explain to the hon. Gentleman what VAT has meant to the theatre?
    Mr. Channon: I had a chance to see the letter that my hon. Friend the Economic Secretary wrote to the Committee, and I understand the disappointment felt in some parts of the House. The Government clearly explained why, collectively, they did not consider that the case for exempting the arts from VAT had been made. The problems of the commercial theatre go much wider than VAT and involve such matters as travel disruption, parking and the cost of eating out. There are many issues that are even more important than VAT.
    Mr. Greenway: Having regard to the answer to the Select Committee on Education, Science and Arts, in which exemption of VAT on theatre tickets was refused, and in which it was stated that it was better to fund theatres

    19
    directly, will my right hon. Friend say what would be the difference between the present direct funding level and the cost to the Treasury of relief of VAT on theatre tickets?
    Mr. Channon: I could not give an accurate answer without notice, but relief from VAT would apply indiscriminately across the board, whereas grants from public funds can be channelled to activities that are thought to be most deserving of support. I quite understand the feelings of disappointment in many parts of the House.
    Mr. Whitehead: Was the rejection of the Select Committee's report made before or after consideration of the present parlous state of the theatre, particularly in London? If it was the former, does the Minister accept that many of us believe that that was an ill-informed decision, and that if it was the latter, it was a stupid and philistine one?
    Mr. Channon: Whichever answer I give I shall fail to satisfy the hon. Gentleman. The Government have been considering the Select Committee's report for some time and all relevant factors were taken into account.

Nissan Project
3.31 pm
Mr. Geoffrey Robinson: 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 announcement in the press today that Nissan has abandoned the car manufacturing project in Britain."
Ever since the project was announced amid a great fanfare of publicity about 18 months ago, there have been continuing reports in the press and continuing evasions by Ministers about its true status. It is a specific matter because when the project was announced on 29 January 1981 it was said specifically that 200,000 cars a year would be produced in this country, that production would begin in 1982—this very year—that the investment would take place in a development or special development area, that the project would include an engine manufacturing facility, that a high level of the output would be for export and, as we learnt subsequently, that up to 5,000 jobs would be created. It would appear to any hon. Member that nothing could be more specific than that.
This is an important matter because of the nature of the specific elements that were announced with the project. It is important for the sake of 5,000 jobs. It is also important because if the project is not now to proceed—that is the urgency of the matter and why I seek to move the Adjournment of the House—we must know quickly what steps the Government propose to take to replace those 5,000 jobs and to take up the capacity of no fewer than 200,000 cars per annum, a large proportion of them for export. All the more reason for considering the matter today is the presence of the Minister at the Department of Industry who is responsible for the project. Is it the Government's intention, in view of the urgency and specific nature of the project and the problems surrounding it, now to enter into discussion with British Leyland and to undertake with it as big and as promising a project as the one that is to all intents and purposes no longer to take place, despite weak denials from the company today?
Mr. Speaker: The hon. Member for Coventry, North-West (Mr. Robinson) gave me notice before 12 noon that he would ask 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 announcement in the press today that Nissan has abandoned the car manufacturing project in Britain."
As the House knows, under Standing Order No. 9, I am directed to take into account the several factors set out in the order but to give no reasons for my decision.
I have given careful consideration to the hon. Gentleman's representations, but 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.

GEC-Hitachi (Jobs)
Mr. Ioan Evans: 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 announced loss of 880 jobs at GEC-Hitachi Television Ltd. at the Hirwaun industrial estate in Aberdare."
The industrial estate is on the border between the Neath and Aberdare constituencies. Over the week-end GEC-Hitachi, which currently employs 1,900 workers at its Hirwaun factory, announced the loss of 880 jobs. In a press release the company said:
"Since targets were set for increased output in 1982–83 the Company has had to make a fundamental reappraisal of its plans.
In the face of severe price cutting in the industry, sales forecasts were drastically reduced. A three day week began in May and lasted for six weeks and pay increases have been deferred. Stocks have now been reduced and five-day working has been restored. In earlier discussions employees and representatives have been kept informed of the business difficulties, but now because of intense competition, if the business is to survive drastic cost reductions are essential.
The Company's proposals regrettably will involve reducing the number of indirect employees from 600 to 300 and a reduction of 230 direct employees. 270 employees have already volunteered for redundancy, but to survive, the business needs to retain vital skills and, unfortunately, enforced redundancy is unavoidable.
The Company is informing employees' representatives of a proposal to reduce direct employment levels by a further 350 at the end of November 1982."
As you will have heard at Question Time, Mr. Speaker, we in Wales have been expecting the Datsun Nissan project to come to the Principality. That would have meant an increase of 3,000 or more jobs. In the past month, with the threatened reduction at GEC-Hitachi, with the announced closure of Panteg steelworks and with the reduction of 1,200 jobs at BP in Barry and Baglan Bay, Wales has lost 3,000 jobs. [Interruption.] I am not arguing the case, Mr. Speaker, I am merely putting one or two points to you.
There is 20 per cent. male unemployment in my constituency. GEC-Hitachi is one of the major firms in the Cynon valley. The workers at the factory increased production by 60 per cent. last year. The firm argues that the problem is a lack of demand. Although my constituents realise that there is a world recession they believe that the Government's policies are damaging British industry. I hope, therefore, Mr. Speaker, that you will seriously consider giving the House time to debate the issue; if there is not a debate very soon there will be no manufacturing industry left.
Mr. Speaker: The hon. Member for Aberdare (Mr. Evans) gave me notice before 12 noon today that he would seek leave to make an application under Standing Order No. 9 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 announced loss of 880 jobs at GEC-Hitachi Television Ltd at the Hirivaun industrial estate in Aberdare."
I listened with great concern to what the hon. Gentleman said but, as he knows, this is not the only way in which the matter can be discussed. I do not decide whether the matter should be debated; I merely decide whether we should change our business to allow an emergency debate tomorrow. I must rule that the hon.

23
Gentleman's submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.
Mr. Donald Coleman: On a point of order, Mr. Speaker. While one accepts your ruling regarding the Hitachi factory, which is in my constituency, is this not further evidence of the success of the Prime Minister in that she has now been able to destroy the Japanese economic miracle? The Hitachi affair is part of a growing industrial decline in South Wales. I ask you to insist, Mr. Speaker, on the presence of the Leader of the House so that he may make a statement that we shall be able to debate these matters on the Floor of the House.
Mr. Speaker: The hon. Gentleman must pursue that matter through the usual channels.

STATUTORY INSTRUMENTS, &c.
Mr. Speaker: By leave of the House, I shall put together the two Questions relating to Statutory Instruments.
Ordered,
That the draft Aviation Security Fund (Amendment) Regulations 1982 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft United Nations Industrial Development Organisation (Immunities and Privileges) Order 1982 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Cope.]

EUROPEAN COMMUNITY DOCUMENTS
Mr. Speaker: By leave of the House, I shall put the two Questions together.
Ordered,
That European Community Document No. 1129/76, concerning Group Accounts, be referred to a Standing Committee on European Community Documents.
That European Community Document No. 5692/81, concerning Bank Accounts, be referred to a Standing Committee on European Community Documents.—[Mr. Cope.]

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, notwithstanding the provisions of paragraph (3) of Standing Order No. 18 (Business of Supply), a half day allotted to the business of Supply may be taken after Seven o'clock and may be anticipated by the Motions standing in the names of Mr. George Gardiner and Sir Victor Goodhew.—[Mr. Cope.]

British Rail (Dispute)
3.40 pm
Mr. George Gardiner: I beg to move,
That this House salutes British Rail travellers for their determination to overcome the effects of industrial action; condemns those union leaders who refuse to accept modern working methods; and believes that until these are adopted there can be no hope of achieving an efficient railway system that actually serves the travelling public.
Over recent days and weeks we have heard and read frequent statements on television and in the press from Mr. Sidney Weighell and various leaders of the National Union of Railwaymen, we have heard accusations from Mr. Ray Buckton on behalf of the Associated Society of Locomotive Engineers and Firemen and we have had statements and warnings from Sir Peter Parker and Mr. Clifford Rose representing the British Railways Board. My purpose is to raise a voice for the hard-pressed and long-suffering members of the travelling public who, alas, need to use the railway system to get to and from their work. What better day to do so, it being the first of what we are told will be an indefinite strike called by the train drivers' union against the introduction of modern working methods, for the acceptance of which they have already been paid?
The hardship inflicted on the travelling public by this year's recurring strikes on British Rail is by no means the whole story, but it forms a substantial part of it. If ever a campaign medal were deserved by civilians in time of peace, it must surely be by the thousands upon thousands of daily rail commuters who, in the vicious weather of January and February, did everything in their power to get to work regardless rather than resign themselves to defeat. Car-sharing rotas were devised, flexible hours were accepted, special coaches arranged, and often long distances walked by passengers to the nearest picking up points. Some were put up at hotels but far more made temporary arrangements to stay with relatives or friends, or even to use a sleeping bag in the office. All our talents for improvisation and survival were utilised. They were again in the two days of the NUR strike, and they are again now as ASLEF seeks to assert yet again its brute industrial might.
When my hon. Friend the Under-Secretary of State contributes to the debate I hope that he will pay full tribute to the resourcefulness and determination of so many regular commuters. When the Opposition Front Bench spokesman, the hon. Member for Aberdeen, North (Mr. Hughes), comes to pick a tortuous path between giving support to, and witholding if from, ASLEF, I hope that he will pay the same tribute to the travelling public.
The debate is not confined to the effects of the strike. When I decided to introduce a debate on this subject I did not know even whether the threatened NUR strike would still be in operation. I am equally concerned about the hardships endured by the daily travelling public at times when working on British Rail is "normal"—I put the word in quotes advisedly.
In my constituency many people commute to London from Redhill, Reigate and smaller stations in the Banstead area. A week never passes without my receiving letters complaining of cancelled trains, misconnections, grossly overcrowded carriages and dirty carriages, and all for fares that on no reckoning can be called cheap. I have lost count of the number of occasions that I have attended functions

25
in my constituency when several participants have arrived long after the starting time, saying something like "Sorry we are late, but the trains from Waterloo are up the creek again. It took us two and a half hours to make a journey that should have taken 40 or 50 minutes". Those who travel regularly by British Rail from these stations into London to work know that whatever fatigue is incurred and suffered in the course of their work will be trebled in the battle to get home afterwards.
Mr. Frank Dobson: If this problem has prevailed for the hon. Gentleman's constituents for so long, why has he been so noticeable by his absence at Transport Question Time and on other occasions when investment in British Rail has been debated by the House?
Mr. Gardiner: I shall deal with investment, which is rather a different issue, later in my speech. I can tell the hon. Gentleman that I have not been lax in taking up with the management of British Rail the regular complaints that I have received, although I have felt on occasions that I should give up the task as hopeless.
Mr. Dennis Skinner: My hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson) said that the hon. Gentleman was absent from duty. That was my hon. Friend's point.
Mr. Gardiner: I shall return to my theme. I invite those at every level in British Rail to reflect on the fact that the travelling public are determined not to be beaten by the strike. That determination is fuelled not only by a gut rejection to ASLEF's bloody-mindedness but also by an awareness that our "normal" railway system should and could be far more efficient, reliable and comfortable and provide better value for money, and that the time has come to break the backs of those forces that stand in the way of such improvements and which defend to the bitter end their own restrictive practices.
The daily traveller on British Rail now feels that he has put up with enough. Unless we can break through the barrier that has been erected against modern working methods, the so-called "service" provided to commuters by British Rail will continue to be the disgrace that it is.
At the root of the problem are restrictive practices operated by unions which for years have believed that they enjoy monopoly bargaining power, but I do not criticise the unions solely. Over the years there has been within British Rail a pattern of weak management that goes back long before the days of Sir Peter Parker and his control of British Rail's affairs.
We frequently hear about investment as if increased investment programmes offered the solution to all the problems. In my experience, a great deal of investment is taking place in British Rail. I represent a constituency on the Southern region and I am aware of the ambitious and modern signalling system that is being installed at all the southern approaches to the London termini. I note that the external borrowing limit now stands at a record £950 million. There are other examples of investment that are hardly encouraging. We know that £150 million of public money was invested in electrifying the Bedford-St. Pancras line. The modern electrified trains are still not working. There is no agreement yet with the unions concerned to enable British Rail to utilise and exploit that investment.
Mr. Geraint Howells rose—
Mr. Gardiner: It is not surprising that many taxpayers, even regular commuters, say that there should be no more investment unless it is preceded by agreement with the parties involved that it should be properly worked.
Occasionally we hear of comparisons with the investment programmes of some of our EEC partners. I know that we are often not comparing like with like, but when I am invited to make comparisons with Continental patterns of investment, I immediately make comparisons with Continental working practices.
Mr. Howells rose—
Mr. Gardiner: When I have completed this point I shall give way to the hon. Gentleman. I note that every other EEC country has flexible rostering for train drivers and other rail workers. I note that West German drivers are about 12 per cent. more productive than their British counterparts and Dutch drivers are as much as 50 per cent. more productive. The figures in other countries are not dissimilar. I also note that train drivers in West Germany do not have the right to strike. Until we have the Continental acceptance of modern working practices on our railways, to call for further investment is to invite us to pour money down an open drain.
Mr. Howells: Perhaps the hon. Gentleman should do a little research into railway lines in Wales. Is he aware that travellers cannot reach the south from the north without crossing the English border? Does he not agree that there should be more investment in Wales than on the Continent?
Mr. Gardiner: I am speaking principally on behalf of those who commute regularly into our major cities by British Rail. I do not have the detailed information with which to answer the hon. Gentleman's point. I do not know how much demand there is to travel from north to south Wales. If there is a substantial demand, I hope that it will be included in the investment options put before British Rail's management.
If we talk of working practices we must discuss the abuses of working arrangements that were brought to light during the troubles of last winter, some of which crossed the boundary into downright fraud. The examples were highlighted when one man was literally caught napping when the train on which he should have been working crashed. Allegations were made of the practice on joint shifts, where one employee would sign on and then, on a nod from his colleague, go home to bed. Some railwaymen asserted that they had been happily spending their time drinking while on overtime pay and that others happily slept it off on the cab. I do not claim that those practices are general. I am convinced that they are not. However, the tip of a nasty iceberg came to light, and just as it is an indictment of the men indulging in those practices, so too it is an indictment of slack management that they were allowed to build up during the years and that a blind eye was turned to them.
Mr Skinner: Perhaps the hon. Gentleman can complete a little more of the story and tell us, in his capacity as a supposed full-time Member of Parliament, picking up £14,000 a year, how many clients he has as a non-executive director of Cutbill Advertising Ltd. How much money does he make there and how much does he make from his moonlighting at all the newspapers? Perhaps he will lay it all on the line instead of just attacking train drivers.
Mr. Gardiner: That point does not merit serious consideration or reply. However, I will not concede, to the hon. Gentleman or to anyone else, that I am anything other than a full-time Member of Parliament. I am under contract to one newspaper, not many as he suggests. If he is used to the concept of time and a half, I am sure that he will understand that I consider my work for the Sunday Express not as part of my full-time job but rather as the half that is added to it.
Mr. Skinner: What about Cutbill Advertising Ltd?
Mr. Gardiner: All that is in the Register of Members' Interests.
When we consider what is happening in British Rail today, it is hard to avoid the impression that the industry is slowly killing itself. I have been critical of management and past management as well as trade unions. The management has woken up late in the day to the need to break restrictive practices rather than to come to fudged compromises whereby those practices continue. The management also recognises that we have reached the limit of what the taxpayer is willing to tip in to the operations of British Rail.
However, there has been a blindness on the part of rail union leaders to the choices that face the potential traveller on British Rail. My motion does not cover freight services or inter-city passenger travel, but in both areas more and more customers are opting for the alternatives that are opening up. The same pattern is now emerging in short-distance commuter travel.
Mr. Derek Foster: Is the hon. Gentleman aware that British Rail recently lost a freight order to carry British steel because it did not have sufficient wagons? [HON. MEMBERS: "No."] I assure the House that that is true information, which I discovered only on Friday. British Rail does not have those wagons, not because they are not needed, as the Secretary of State and other Ministers have told me many times, but because it cannot afford to buy them. The tight financial limits operated by the Secretary of State and his friends in the Treasury prevent British Rail from buying the wagons to carry the freight. Now the freight is being carried by road.
Mr. Gardiner: The hon. Gentleman may be satisfied with his information and its source, but I cannot accept it on his say-so. To judge from the remarks of some of my right hon. and hon. Friends during his intervention, it is fairly obvious that the so-called facts that he recited are strongly disputed. It is far more likely that, if a contract has been lost, it is because a cheaper and more reliable means to deliver the goods has been found.
Consumer choices are now opening up that did not exist some years ago. But there is still a blind insistence by many union leaders that the old, cosy restrictive practices must be retained at all costs. We saw the blind stupidity of last winter's strike that cost British Rail at least £80 million, and the suicidal stupidity of last week's strike which mercifully lasted only two days until the members of the union managed to make their views felt. That strike cost British Rail £12 million.
Both those strikes were nails in the coffin of what appears to be an industry dying from self-inflicted wounds. Each one is further encouragement to customers to look elsewhere. It need not be so. We need not be trapped into this self-defeating pattern. I am not an enemy
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of the railway system. I do not believe that we can wind it up as good alternatives are available. I want to see a healthy, efficient railway system that will serve our cities and the people who live and work in them.
In the face of yet another strike by ASLEF, we should ask, "How many ASLEF members actually want to strike today?" I do not know. Mr. Ray Buckton does not know, nor does the executive of that union, because the members have never been asked in a secret ballot. Acceptance of an obedience to that strike call has fallen short of 100 per cent. Many more drivers have not turned up to work today who would like to but who are frightened by the prospect of facing a hostile picket line of men from other depots.
A week ago we saw how a delegate conference managed to exert some influence on the position during the strike called by the executive of the NUR. The delegates reflected the views of rank and file members and the strike called by the executive, without any ballot of those involved was brought to a speedy conclusion. It is the clear duty of ASLEF now to ballot its members to discover whether they want to embark upon a prolonged strike rather than accept more flexible working hours that many believe are bound to come. Let Ray Buckton and ASLEF ballot their members to find out what they really want.
I was interested to read over the weekend that Mr. Buckton said that it was to be a fight to the death. The death of who or what? Was it the death of thousands of jobs on the railways, both for his own union members and those of other unions? Was it the death of jobs elsewhere—like seasonal jobs in resorts that depend for their customers on the railways bringing holiday-makers at this time of the year—or was it the death of the railway system itself? We see the attitude, "If the railways cannot be run by the rules of 1919, they should not be run at all." Or, if it is to be a fight to the death, will it by any chance be the death of ASLEF? What a welcome event that would be.
The leadership of ASLEF epitomises all that holds back British Rail and indeed British industry elsewhere. Antediluvian, obstinate and autocratic, it fights to defend old privileges for which all justification has gone. It is a union that even its own members could well do without. There is no place for a trade union governed by such attitudes in a modern railway system any more than there is in a modern industrial society.
British Rail has already suspended the provisions of the closed shop agreement with ASLEF that would oblige it to sack any workers who were expelled from the union as a consequence of defying orders and turning up to work during the strike. After the strike is over, more ASLEF members are likely to walk out of the union than will be thrown out. I believe that British Rail should scrap that closed shop agreement altogether. Furthermore, unless ASLEF accepts, unconditionally, flexible rostering and other modern practices, British Rail management should refuse to negotiate with it.
I have concentrated my remarks on ASLEF, for obvious reasons. Let us not forget, however, that productivity issues also involve the NUR. The NUR members who exerted their influence to ensure that that pointless and stupid strike last week was brought to a speedy end are to be congratulated and commended. Although the NUR leadership has shown itself more responsive to the introduction of modern work methods, such as flexible rostering, let us not close our eyes to the fact that it is obstructing the introduction of other modern working

29
methods. Of six productivity items for which payment was made last year, so far two only have been fully honoured. I have mentioned the scandal of the modernised, electrified Bedford-St Pancras service. That lies at the door of the NUR. Nor can one ignore the fact that its two-day strike cost the industry £12 million to no purpose.
Commuter travellers now face the crunch with ASLEF. Those commuters demand that this strike be broken. They do not want another fudge, another payment or settlement on the basis of promises to talk, to consider and to experiment. Commuters are in a mood to resist, to accept sacrifice and hardship, just as they did last winter—not only because they are tired of being the victims of regular strikes but because they know that the so-called "normal" railway system just cannot go on as it is. This time they expect the British Railways Board to stand firm and to play its hand just as hard as ASLEF has always played its hand in the past.
Once the ordinary members of ASLEF realise that there will be no fudge at the end of the dispute, and that the public are prepared to see the strike out for just as long as those members are prepared to continue without wages or strike pay, they will start to come back. As they do, each one must be required to sign an acceptance of flexible hours and other modern working methods; and unless, when ASLEF eventually admits defeat, that admission is accompanied by an unconditional acceptance of flexible hours, let the British Rail management do all in its power to put this trade union dinosaur out of its misery.
Mr. Ted Leadbitter: May I make one point?
Mr. Gardiner: No. I am concluding. The hon. Gentleman must make his own speech.
Rail commuters know now, as they knew last winter, that in beating this strike they are helping to move to a more efficient railway system. Woe betide any chairman of British Rail or any Minister who sells the pass on them this time.
4.10 pm
Mr. Frank Dobson: For fear of being accused of covering anything up, I proclaim that I am sponsored by the National Union of Railwaymen. I make no apology for that.
I was in Plymouth last Monday when the NUR debated what to do about the strike then in progress. It did not vote to accept British Rail's abysmal offer of 3·2 per cent. Even those who advocated terminating the strike for the time being did so specifically because they were confident that the case that the union had submitted in the negotiations with British Rail was so convincing that the independent arbitrator, the Railway Staff National Tribunal, could not but agree. If it failed to do so, or if it endorsed the claim and the British Rail management, backed by the Government, failed to meet it, the NUR would call another general meeting to decide what to do. Not even those most strongly in favour of adjourning the strike were prepared to countenance acceptance of the abysmal 3·2 per cent. No one on the Conservative Benches should be under a misapprehension from reading of the decision in the national newspapers.
I hope that the hon. Member for Reigate (Mr. Gardiner) will not feel that I am being too personally critical, but I believe that, since I have been a Member of the House
30
from the last general election, he has never before raised any issue concerning the railways. I attend Transport Question Time regularly. I do not recall him appearing often to advocate the interests of the travelling public in his area or the necessary investment in the railway system which is trying to serve his constituents.
It would be wise for the hon. Gentleman and his Friends to remember that the time perspective is much greater than the past two weeks or even six months. The railway management and the Government face the culmination of a long period of disillusionment among all railway workers about the benefits that they should have got from an unending series of productivity concessions. They were told that the productivity concessions would improve the service, make the railways more efficient, save money and give the workers a decent income. They certainly have not produced a decent income for railway workers.
Members of Parliament now receive about £15,000 a year, and Conservative Members may supplement that by moonlighting. They should be aware when they talk of keeping down pay and breaking the railway unions that some of the people involved take home less than £50 a week. There is no point in talking of percentages. They should contemplate trying to bring up a family on less than £50 a week.
The hon. Member for Reigate did not know, or perhaps he knew that it was no benefit to his cause, that even before the Competition Act 1980 received Royal Assent, his hon. Friends referred to the revamped Monopolies and Mergers Commission the efficiency a railways in London and the South-East.
Mr. Toby Jessel: It is the engine drivers who are on strike. Is the hon. Gentleman saying that they do not earn more than £50 a week?
Mr. Dobson: No, I am certainly not. Other hon. Members will talk about the engine drivers and others who may be better paid. The hon. Member for Reigate was saying that the NUR must be prevented from getting a better pay increase than what is offered. Hon. Gentlemen should remember that many of those people are badly paid.
Sir Geoffrey Johnson Smith: We can bandy statistics, but can the hon. Gentleman tell us what categories earn only £50 a week? What jobs do they do? How does British Rail's productivity compare with that of other railway systems?
Mr. Dobson: A substantial number of people working on the railways—in carriage and wagon, maintaining the permanent way and cleaning the filth and stink that the general public leaves in the railway carriages—are badly paid. Large numbers of the staff working on the stations are not paid much better. They work long hours for little return.
Mr. Harry Cowans: Sometimes, to make up wages' o £50 a week the minimum earnings level, agreed between the management and the trade union, has to be applied. The grades involved are rural porters, carriage and wagon, some grades on the permanent way and many other grades throughout the railway, particularly in the workshops. To give the list would take longer than my hon. Friend's speech.
Mr. Dobson: I am grateful to my hon. Friend for trying to add to the knowledge of Conservative Members, although I am confident that they will ignore what he says.
The terms of reference to the Monopolies and Mergers Commission were specific and peculiar. Among other things it was asked to decide
"the extent to which any deficiency in the quality of service provided is the result of inefficiency".
That was pointed deliberately towards identifying inefficiencies on the London and South-East service. It was also asked to look at
"the scope for improvements in efficiency and manpower productivity having regard to the extent and effect of the manpower savings already made".
I doubt whether many Conservative Members have ploughed through the report, but I defy them to find where the Monopolies and Mergers Commission has identified restrictive practices as an important source of difficulty, despite the fact that the terms of reference steered it in that direction. The report refers frequently to the trade union's willingness to co-operate in changes in working practices. Far more attention is given in the report to the difficulties of finding staff to operate the services as a result of the low basic pay and unsocial hours of work.
According to the Monopolies and Mergers Commission—not to me, an NUR-sponsored Member of Parliament—there was an overall staff shortfall of 15 per cent. in London and the South-East. In February 1980, when the figures were drawn up, guards were 12 per cent. below the establishment required, signals and telecom staff were 15 per cent. short, and there was a 25 per cent. shortfall of people needed to maintain the permanent way. We have just heard one of the reasons for that shortfall—because some of those people take home less than £50 a week, even with overtime.
Sir Victor Goodhew: The hon. Gentleman seems to be skating round the point that he started on. He said that the Monopolies and Mergers Commission report did not make much of restrictive practices. Would he care to come to St. Albans some time and see what the people there think about the brand-new rolling stock—the investment that he said was not forthcoming—lying in sidings waiting to be used, which cannot be used because it is designed to be driven by one driver? The taxpayers provided the money for those modern trains to be built, and we have waited for many years for them on our local line between Bedford and St. Pancras. So is it right that they are prevented from being used by members who have nothing to do with what he is talking about and who are being adequately paid?
Mr. Dobson: I shall come to the Bedford-St. Pancras line. Even the hon. Member for St. Albans (Sir V. Goodhew) is surely not so ignorant as to believe that the Bedford-St. Pancras line is in the London and South-East part of the railways which was subject to the Monopolies and Mergers Commission report. Perhaps he will restrain himself for a moment, until we reach that topic. For the moment, I shall concentrate on what was said in the Monopolies and Mergers Commission report.
Mr. Skinner: The hon. Gentleman has a lovely voice.
Mr. Dobson: Yes, it is absolutely beautiful—and he has a knighthood, too.
Mr. Skinner: A railways voice.
Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. This debate is about the travelling public and British Rail, not about knighthoods or beautiful voices.
Mr. Dobson: We shall all know where to go in future for station announcers.
The Monopolies and Mergers Commission cites a management survey, which was done either by or for British Rail, which gave as the reasons for the chronic staff shortages and high turnover of staff
"generally low basic rates of pay"
and
"long, irregular and unsocial hours".
However, British Rail is now trying to smash the railway workers into the ground and make them accept a pay increase of 3·2 per cent. Moreover, it does not lie in the mouth of anyone in this Chamber, who has just got a pay increase of 4 per cent., to impose a 3·2 per cent. increase on people who may be earning less than £50 a week.
There was one thoroughly objectionable aspect of the Monopolies and Mergers Commission report. It suggested that British Rail might tackle its staff shortages by recruiting more women as full and part-time staff—presumably on the basis that women would accept lower pay. British Rail cannot persuade men to work these unsocial hours on the lousy existing rates of pay, so presumably the commission felt that it should try to persuade women to do so instead. No doubt, as Thatcherism takes off, it will suggest children, if it cannot get women to do the job. The long, degrading and despicable attempt by the Conservative Party would thus continue, to drive down railway wages whatever the consequences.
"The problems confronting the board will not be solved simply by improving labour productivity."
That was said, not by me, but by the Monopolies and Mergers Commission. I remind Conservative Members that the commission was not allowed to consider the significance of financial contributions by the Government. It was specifically prevented from considering the impact of low investment on London and the South-East.
Mr. Leadbitter: The hon. Member for East Grinstead (Sir G. Johnson Smith) mentioned productivity, compared with other European countries and systems. British Rail commissioned a report last year on European railway systems. It showed, first, that the productivity of the British railway worker was much higher than that of any other system in Europe; secondly, that the investment of British Rail was the lowest in Europe; thirdly, that Government support for British Rail was lower than similar support by any other country in Europe. It is time that Sir Peter Parker, instead of being the broker for the Prime Minister, fought for his system, and not against the men.
Mr. Dobson: I thank my hon. Friend. Some Conservative Members wanted to tempt me into that area, but frankly I do not have the details with me, and I should not wish to mislead the House. My hon. Friend has dealt with the matter most adequately.
It is therefore clear from the MMC report that the problems of the London and South-East railways—of efficiency, breakdowns, signalling problems, track problems and failure of trains to run—do not spring to any significant extent from inefficiency or low productivity by the existing staff. Conservative Members should accept that. It was their Government who asked the Monopolies

33
and Mergers Commission to look at the matter. It was their Government who laid down the terms of reference, and it was their sort of people on the commission who came up with the conclusions that I have mentioned.
The railway unions and Labour Members are not the only people who believe that there is merit in much more public investment. By coincidence, I received in the post this morning a parliamentary brief from the Confederation of British Industry which says that there is
"an urgent need for investment to improve the national infrastructure",
as it calls it. Part of that infrastructure is a massive increased investment in the railways. Without that investment, there will be no improved services. Conservative Members should realise that not only will we not have improved services unless investment is increased, but we shall have declining services. The rolling stock, signalling and permanent way are declining faster than the amount of money put in by way of investment each year can put them right. An investment of £500 million a year is needed to stand still, and we are getting nothing like that amount from the Government.
Sir Victor Goodhew rose—
Mr. Dobson: The hon. Member for St. Albans raised the matter of the Bedford-St. Pancras line. For a start, he obviously does not know the terms of the agreement between the NUR and British Rail about the Bedford-St. Pancras line. Basically, the undertaking was to enter into meaningful talks with British Rail about manning. People may not like the terms, but those were the terms agreed. If people jib at that, they should jib at those who accepted them.
The NUR has made many proposals to maximise the benefit to the travelling public on the Bedford-St. Pancras line.
Sir Victor Goodhew: How?
Mr. Dobson: The hon. Gentleman should ponder the points made by the NUR. There might be a smidgen of truth in the union's concern that the driver of the new rolling stock—which is considerably quicker than the old and carries a lot more people—locked in his cab at the front, would be incapable of dealing with an emergency. British Rail's lost income as a result of its new manning proposals on the Bedford-St. Pancras line should also be considered.
When the hon. Member for Bedfordshire, South (Mr. Madel) spoke on this topic in an Adjournment debate recently he gave much thought, and, as I understand it, some support, to the point of view of the NUR and cast some doubts on the point of view of British Rail. There is no unanimity even on Conservative Benches about the present state of affairs on the Bedford-St. Pancras line. I should like to see the line operating as soon and as efficiently as possible.
Just because the British Rail management decides that something is good does not necessarily make it good for the travelling public. Some of the concessions that have been obtained from the railway unions over the past few years may be to the disadvantage of the travelling public. I am doubtful about the demanning of stations, certainly of those within London, and—to shift for a moment—the demanning of London Transport stations. The removal of the human element leads almost automatically to an increase in violence and vandalism; to the smashing up of
34
railway stock for which the taxpayer has paid. Just because it is to the short-term benefit of the British Rail management does not necessarily mean that it is to the advantage of the travelling public. The railway unions have frequently shown a greater concern for the long-term interests of the travelling public than has British Rail management.
Mr. Foster: Has my hon. Friend any experience of the Japanese railway system? It has so many employees—this applies to their hotels too—that one wonders how on earth it can afford so many people for menial and sometimes seemingly pointless tasks. However, the Japanese give tremendous service to the public and their stations are not vandalised. That might have some bearing on the point that my hon. Friend is trying to make.
Mr. Deputy Speaker: Although the Japanese railway system may have some relevance, may I remind the hon. Gentleman and other hon. Members that many hon. Members are waiting to take part in the debate?
Mr. Dobson: I shall be brief, Mr. Deputy Speaker.
It is worth returning, albeit briefly, to an earlier point. The majority of railway employees see little return for a period of constant concessions. To return to what were the halcyon days of Beeching for Conservatives Members, the 1964 British Rail annual report said:
"In this connection it is of interest that, over the three years from the beginning of 1962, the total railway manpower has been reduced by 103,000 … Thus, in a period of severe wage inflation, the railways have been able to stabilise their wages bill, while making real improvements in staff pay by wage increases greater than the national average,"—
and then follows a really queer bit in the context of today—
"and at the same time release a labour force capable of adding at least £100 million to national output."
That was a period of substantial concessions.
As I pointed out to the House about a week ago, if the productivity and staffing of the House had proceeded at the same rate as that of the railways since 1950 there would now be about 200 hon. Members. We must bear that comparison in mind. The travelling public would rather have railwaymen providing them with a railway service than hon. Members standing here talking about them.
Times have changed and although concessions were obtained under Beeching they will be more difficult to obtain in future. The report talks about releasing 100,000 people for other jobs. At that time they could get other jobs, but they cannot any more. There is the thick end of 4 million people unemployed. If Conservative Members and the British Railways Board wonder why it is more difficult to get concessions, one of the predominant reasons is that people will not be able to find other jobs if they lose their jobs on the railways.
The hon. Member for Reigate talked in almost Prime Ministerial terms of a fight to the death with the railway unions. The Prime Minister, as was revealed during the invasion of the Falkland Islands, believes in a fight to the finish and total surrender by the other side. Many hon. Members believed that that was an appropriate attitude for the Prime Minister towards the Fascist regime in Argentina. However, it is not an appropriate attitude to take towards her fellow citizens.
We must find an approach which accommodates the Government, British Rail and those of the Prime Minister's fellow citizens who work on the railways. That

35
will no doubt involve the Advisory, Conciliation and Arbitration Service. If I had to think of three words which would stick in the Prime Minister's throat more than "advisory", "conciliation", and "arbitration", I would be at a loss.
The Prime Minister does not take advice on this sort of issue, she does not conciliate and arbitration is the last thing she is looking for. It may be that the Government can win what they see as this battle with ASLEF. However, industrial relations should not take the form of a battle. Battles may be temporarily popular with Conservative Members but that should not be the attitude of a Prime Minister of her country. The sooner she learns that the better.
4.40 pm
Mr. Eric Cockeram: I am pleased to have the opportunity of supporting the motion so ably proposed by my hon. Friend the Member for Reigate (Mr. Gardiner). The hon. Member for Holborn and St. Pancras, South (Mr. Dobson) declared an interest as a sponsored member of the National Union of Railwaymen. I also declare an interest as a member of the travelling public on behalf of the travelling public. My interest is wider than that. It is on behalf of many people, including many in my constituency, who do not have a railway within miles of their homes. Those people are concerned at the practices of some of those who "work" for British Rail.
One point has been frequently raised. We hear from Mr. Buckton, Mr. Len Murray and others, including Opposition Members, that the problem is that we do not have enough investment in British Rail. They say that we need more investment in British Rail. It is a distortion of the English language to use the word "investment" in connection with British Rail. There is no such thing.
If one asks people in the street where they invest their savings, they say that they put their money somewhere where they can obtain a little interest—perhaps in a building society—or where they hope to make a profit and get more out at the end than they put in at the beginning, such as National Savings certificates. They may put their money somewhere where they hope to get a dividend, on the stock exchange for example, and perhaps make a profit as well, although often they make a loss. That cannot be compared with what happens in the so-called "investment" in British Rail.
The British taxpayer pours over £900 million per annum into British Rail, which is over £2 million per day. That is not an investment. Not a penny is repaid. No interest is paid on it. Previous Labour Governments have written off capital. An Act passed by a former Labour Administration wrote off £1·2 billion at the stroke of a pen. That is not investment. It is subsidy.
Mr. Foster: Does the hon. Gentleman deny the findings of the joint study by the Department of Transport and British Rail, which proved to everyone's satisfaction, except the Prime Minister's personal economist Professor Walters, that there would be an 11 per cent. return on the electrification of British Rail? When the hon. Gentleman is talking about losing money, will he take into account that the public service obligation grant is about £850 million? That is not a loss but an investment by the British
36
public in a social service to provide transport in many rural and commuter areas where we as a community have decided that it is necessary.
Mr. Cockeram: There is not a railway line in this country that yields 11 per cent. to anyone. Not one penny is yielded. The hon. Member for Bishop Auckland (Mr. Foster) will know well the position on Tyneside. It is the same on Merseyside and on Clydeside. Years ago people were saying that we must invest more in the railways. More money has been "invested" in railways in those three areas. There has been not one penny of return. Not 1 per cent., never mind 11 per cent., has been earned on those railways. Each line is running at a loss. Not one pays the interest on the borrowed capital. It is a total distortion of the English language to refer to that as an investment. It is a subsidy. It is money that is paid out, not one penny of which comes back. Furthermore, at the end of year one, one starts year two with a demand for still more money. It is the same with special grants, which are supposed to be repayable. Many have been cancelled. Over 60 per cent. of British Rail's income from the sale of tickets and from freight goes in labour costs—wages. The taxpayer meets the difference.
Fortunately, the Government passed the Transport Act 1980, encouraging competition with railways. We see competition on the motorways every time we use them.
Mr. Dobson: What is the return on that?
Mr. Cockeram: I shall come to that point.
The National Bus Company and other companies are running coaches and are catering for an increased number of passengers. The National Bus Company published its annual report last week. Profits for the previous year were under £10 million and for the year just ended were £26 million. That shows the way in which the public prefers to spend its money and it shows that moving people by public transport can be profitable if it is properly organised.
Mr. Christopher Murphy: Does my hon. Friend agree that not only were the Government wise to encourage competitive coach services, but, recognising the interests of the commuters and the travelling public, they were right to encourage car sharing? At this difficult time for people who are trying to get to work, we should all encourage them to take advantage of both those options.
Mr. Cockeram: That is a valid point. I am grateful to my hon. Friend for making it.
Where else does the money on British Rail go? Among other things, it goes towards its prestige project, its Concorde—the tilting train. Over £40 million has been lost already. No one else in the world wants a tilting train, yet we in Britain are using taxpayers' money to experiment with such a project.
Mr. Cowans: I was listening carefully to the hon. Gentleman's argument on investment. I would hate him to go on to talk about the tilting train without doing justice to the investment argument. The hon. Gentleman used the National Bus Company as an idol above everything else. Is the hon. Gentleman aware that this year the National Bus Company has withdrawn from 14 million service miles, some of which were picked up by British Rail by virtue of the PSO grant, which is for a social service? It

37
is easy to make a profit on the milk runs rather than the rural areas, many of which are in the constituencies of Conservative Members.
Mr. Cockeram: I am aware that the National Bus Company, like so many other transport organisations, is bending its practices to the demands of the customer. It is apparent that the customers' demands are increasing on some routes and decreasing on others. It is right and proper that those companies are catering for their customers. They are not being held up in so doing by awkward-minded drivers who will not adjust to the needs of the travelling public.
I am worried about one of the two railways lines in my constituency, which I fear that ASLEF is in the process of closing down. We have managed to keep the line open in the past but the patience of the British taxpayer will not allow that to go on indefinitely if the cost continues to rise. I refer to the single track line from Craven Arms to South Wales, which probably passes through the constituencies of some Opposition Members as well as some of my hon. Friends. There are only five trains per day in each direction and none on Sunday.
The total cost of running the line is about £2 million. The revenue from the line is only £350,000, which means that there is a loss of about £1·6 million on that one line. In other words, the cost of running that line is six times as great as the passenger revenue from it. The loss per passenger journey is £7·50. Not many people travel the full length of the line. They treat it as they would a bus service. A child travelling to school and back each day on that line would make 10 journeys a week. The loss on that one passenger is £75 per week.
The Government have rightly continued to subsidise—I deliberately use the word "subsidise" rather than "invest"—the railway line for the past three years because of the public service social obligation that others have referred to. Nevertheless, there must be a cost beyond which no Government can afford to continue with the subsidy. By crippling British Rail as it is doing at the moment, ASLEF will force British Rail once again to review its marginal lines. There are plenty of them—the Craven Arms to South Wales line is just one. It is possible that that line must be closed because British Rail can no longer afford to subsidise it as a result of losses that have been sustained on he otherwise profitable inter-city lines.
Mr. Geraint Howells: I have listened to the hon. Gentleman with interest. Is he suggesting to the Government that the central Wales line between Shrewsbury and South Wales should be closed?
Mr. Cockeram: No. I thought that I had made myself clear. There must be a limit to the subsidy that the taxpayer is prepared to pay to British Rail. The subsidy at the moment is about £900 million. If, as a result of the ASLEF action, the otherwise profitable inter-city routes are so financially weakened that British Rail must consider closing some marginal lines, we must be clear about where the responsibility lies. It does not lie with the Front Bench of any Government; it lies with Mr. Buckton and ASLEF.
4.51 pm
Mr. Robert Hughes: I begin with the time-honoured tradition of congratulating the hon. Member for Reigate (Mr. Gardiner) on his good fortune
38
in the ballot. I concur with him only in so far as his motion allows us to discuss a problem that faces the railway system and the travelling public.
There, I am afraid, my congratulations must end. The hon. Gentleman displayed and rehearsed all his well-known prejudices against the trade unions. He did not make one constructive suggestion. He spoke of breaking the back of those forces that are causing destruction. He spoke in approbation of the West German system of no right to strike among railwy drivers, of antediluvian trade unions, of there being no place for trade unions of that type in the rail industry, and of British Rail scrapping its negotiating position with ASLEF. If he believes for one moment that speeches of that type help the constituents for whom he expressed such concern, he should return to journalism and begin all over again.
The hon. Gentleman's speech was in marked contrast to that of my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson) who set out constructively an approach to the problems that face the industry and how they might be resolved.
The strike is a tragedy for all concerned. It is a tragedy for the travelling public, for those who move their goods by rail and for everyone connected with the railway industry, whether they be members of the board, management or workers. Moreover, it is a tragedy for the railway community, as Sir Peter Parker likes to describe it. There is never a good time for a strike, especially when the public are so directly affected.
I think of many of my constituents and others who begin their annual holiday; this week or in the near future. For them, the strike could not have come at a worse time. It seems that there is a complete impasse. Each side believes that the other has been driven into the present circumstance. But the dispute could and should have been avoided. When one examines recent events in some detail the difference between the British Railways Board and ASLEF has narrowed considerably, although there are still some substantial points at issue. Nevertheless, the opportunity for peace was missed. I shall return to that point in some detail.
During the past 12 months there has been an almost complete collapse of industrial relations. They have descended to their present abysmally low level and to a complete lack of trust on both sides. If only the trust which is now lacking could be restored, even fractionally, the dispute could be resolved speedily and British Rail could run normally again. That is what we must work for. Judging from the speech of the hon. Member for Reigate, the debate so far has not helped in that direction. The week-end speeches of the Prime Minister and the Secretary of State for Transport did nothing to help.
In speeches both here and elsewhere, the blame has been laid entirely at the door of the rail unions and ASLEF in particular. Although the attitude of the British Railways Board has hardened in the past few days, even it does not lay all the blame with ASLEF. I cannot blame ASLEF if it believes, as a result of speeches both in the House and elsewhere, that an attempt completely to destroy its position and possibly the union itself is being made.
In any industrial conflict, beliefs and attitudes are influenced by a climate of opinion that exists long before the collision course is reached. That opinion has been governed by the almost complete lack of encouragement from the Government for the rail industry and those who work in it. Considerable changes that have taken place in

39
the rail community have not been given due recognition. It would be foolish for anyone to refuse to accept that in some respects progress has been slow. But there has been change. I do not doubt that.
I can give just one example in Aberdeen. The weekend before last I went to the station there. The open station concept is now being tried there. When I went to catch a train there were no ticket collectors at the barrier. There was almost no staff present. I know that the same scheme is being tried in other stations, but it is only when one sees it in reality that one begins to appreciate what is happening. The problem is that we cannot see what the Government are doing in response.
It is no use the Secretary of State coming to the House from time to time exorting and cajoling—even threatening—a course of action to achieve productivity changes when he cannot show positively what the Government are doing in return. I shall give two examples of how the Government should demonstrate their commitment to the modern railway system that everyone wants.
I shall take electrification first. The joint study by British Rail and the Department of Transport was initiated in May 1978. Its final report was published in December 1980. Several options were canvassed, yet not one has been taken up by the Government. What are the Government doing? They are simply stalling and calling for more and more financial studies. Every time British Rail re-does its sums, different and more difficult financial hurdles are set up. There is always an excuse—the economic climate has become more difficult, the ASLEF strike earlier in the year means that more studies must be done. The hurdles become more numerous and higher. The course is constantly being changed. If only the Government had responded earlier and more quickly, the industry would believe that it had a future rather than being
"the crumbling edge of quality"
as Sir Peter Parker described it in "Rail Policy".
Mr. Eldon Griffiths: I understand what the hon. Gentleman is saying but we are now in the early 1980s. In the early 1970s when I was a Minister I obtained substantial sums from the House for new investment in British Rail. Over and again that money was used not to procure the new capital goods that the railway system needed, but to pay for unearned increases that were spread out among the staff.
Mr. Hughes: The hon. Gentleman tells a different story from the Government, who are always boasting about how much money is being used to provide better stock and better signalling services, but his argument is not wholly true. Some of the money sanctioned may have gone to finance pay increases, but there has been at least some change during the past decade.
Let us return to the present, however. The Select Committee on Transport, an all-party Committee of the House with a Conservative majority, recently considered main line electrification. Once again, we owe the Select Committee a great debt of gratitude for the report that it produced. I take one or two of its recommendations as examples.
Paragraph 140 states:
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"Although the case has been somewhat weakened by economic and industrial factors over the past two years, we believe that the Review's basic finding remains valid, namely, that further main line electrification can be financially justified."
In other words, that conclusion remains valid after the review has been carried out and all the other matters have been considered. The report continues that, notwithstanding the difficulties which arise,
"Electrification could therefore be financially justifiable even if the commercial businesses remain in deficit for somewhat longer than the Government is currently hoping."
The report then states in paragraph 147:
"We therefore recommend that, subject to a satisfactory submission by the British Railways Board, the Government should give early authorisation to the electrification of the East Coast Main Line. In view of the financial constraints under which the Board is currently operating, the Government should review their external financing limit and investment ceiling so that additional resources are specifically made available for this project."
In other words, the report says that the Government should make the necessary finance available to British Rail. If the Government had only responded in like fashion, that would have been a great boost for everyone in the rail industry.
I make one further reference to the Select Committee report. Paragraph 149 states:
"Finally, we recommend that the Government's review of British Rail's finances should be pursued with the utmost urgency."
This links with my second example of how the Government could have demonstrated their commitment to the railways, to those served by them and to those who work on them.
Over the past couple of years, there have been several attempts to obtain a review of railway finances. The latest was about the middle of last year. Yet at the end of the year, when members of the Standing Committee on the Transport (Finance) Bill asked the Government about the review, the Government replied that it was still under consideration. Yet the Serpell committee, as it is now known, was not set up until the middle of May this year—six months later, and almost 12 months after the latest attempt to obtain a review of railway finances. Again, the Government come out with the same old story. It is always somebody else's fault that the setting up of the committee has been delayed. Urgent action was required from the Government as the Serpell committee was intended to review railway finances, taking the matter up to the end of the century. That being so, it will always have to consider and postulate various factors which might change in the next couple of decades and to some extent to speculate on what British Rail finances might be.
Why could not the review proceed before now? Why wait? Perhaps it is because the Government well know that investment is one of the keys to the problem and they are still to some extent hidebound by monetarist policies. Perhaps they are still suffering from tunnel vision and the view that they must at all times reduce public expenditure, despite all the evidence of the study by British Rail and the Department of Transport and indeed by all the other studies that benefit would accrue to the railways from investment and electrification. Indeed, it is argued, and I believe this strongly, that proceeding with electrification would provide employment for those who produce railway equipment not only in the British Rail workshops but in the private sector. It would also provide greater opportunities for export orders. Yet the Government do

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not respond, so we should not be surprised if there is disquiet about the future on the part of those who work in the industry.
In the context of current circumstances, too, the Government's inability—whether by accident or design, and I must admit that it looks more like design—is not at all helpful. I listened to the statement by the Secretary of State for Transport last Friday with growing incredulity. There was not even a passing reference to the events of last Wednesday and Thursday. There was no mention of Len Murray's initiative or of the efforts of ACAS. It is probably too much to expect any word of commendation or thanks to Len Murray, ASLEF or ACAS, but all those events were completely ignored by the Secretary of State.
In the light of the significant moves made by ASLEF on Wednesday and Thursday, the least that it could have expected was some encouragement for the conciliation process to proceed and, if possible, thereby to avert the strike. If Noah had been as myopic as the Secretary of State, he would have shot the dove when it returned with the olive leaf. I have no doubt that the ASLEF position of 30 June represented a significant move in the direction of achieving peace on the railways. But for the lack of trust, there is no reason why it should not have been accepted by British Rail as a basis for negotiation.
I wish to consider in some detail two documents setting out the position of British Rail and of ASLEF. It is extremely important to quote those documents, and I regret that I shall have to do so at some length.
I refer first to two letters, dated 23 and 25 June, from Mr. R. H. Wilcox, British Rail's director of industrial relations, and ASLEF's response dated 30 June. The first letter from Mr. Wilcox, referring to the Railway Staff
National Council meeting, states:
"As promised at the RSNC meeting yesterday, enclosed is a paper which sets out the Board's requirements on the progression of those three outstanding productivity initiatives which have become major obstacles to progress.
The experiments proposed would be on a similar basis to those already existing for 'Open Station Concept' pilot schemes in that there would be no permanent displacement of staff and earnings would be protected during the trial periods. Any temporarily displaced staff would be used to best advantage.
I have to remind you that this still leaves us with the 'Trainmans Concept' and 'Manning Conditions' to be progressed before 30 July in the terms of our pay offer.
I must stress that this still remains our position.
The co-operation and support of the Trade Union leadership would be an essential requirement and the Board would also similarly undertake to give maximum support and effort, to ensure that the experiments, whether on the basis of the Board's or the Unions' proposals, are given a fair and reasonable trial."
That letter was addressed to the three union general secretaries. The next letter, dated 25 June and again addressed to the three unions, states:
"At the meeting of the RSNC today the ASLE&F representatives sought clarification of some aspects of the paper which accompanied the Board's letter dated 23 June and which described the Board's requirements in three of the six productivity items outstanding from the 1981 agreement.
It was agreed by the Board's representatives at the RSNC meeting that the ASLE&F proposal under the heading of `Flexible Rosters' should have the words 'within existing national agreements' added. This has been done and an amended paper is attached to this letter.
The Board also confirm what was said at the meeting that should agreement be reached with the Trade Unions to test both the ASLE&F and the Board's proposals concerning flexible rosters then the Board would withdraw the existing instructions to Managers that flexible rosters would be implemented at Depots in the near future in accordance with the principles of RSNT Decision 77."
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It is worth pointing out that the appendices attached contain the proposition that there should be experimental manning and running of the Bedford-St. Pancras line on proposals put forward by the NUR. Therefore, if we have discovered nothing else today, that offer remains on the table. At least there is still to be experimental running on that line according to a proposition put forward not by the board but by the NUR. That is significant progress.
I shall now quote the ASLEF response. Again, so that it will not be felt that I am quoting selectively, I shall read it in full. It states:
"The BRB and ASLEF agree as follows:
In the light of tie agreement reached below BRB will not implement its intended flexible rosters on 4 July and ASLEF will not proceed with its intended withdrawal of labour on 4 July.
The ASLEF Executive will recall its Conference as speedily as possible and will seek from the Conference authority to co-operate with experiments on productivity improvements and flexible rostering, to be carried out in accordance with paragraphs … and … below. An experiment will be carried out in a substantial geographical area of a proposal from ASLEF that, by a careful review of the work allocation, and the concentration of more work into programmes, links and rosters, there could be savings to cover the introduction of the 39 hour week at minimal cost and to produce productivity improvements to match the Board's flexible rostering proposals but in accordance with existing national agreement.
Concurrently an experiment will be carried out on BR's proposal, also covering a substantial geographical area, of its flexible rostering proposals in accordance with the principles of RSNT decision 77.
Both parties agree that these experiments will be given a fair and reasonable trial and will be carried out without prejudice to existing agreements. There will be no permanent displacement of staff, and earnings will be protected during the experimental period. Any temporary displaced staff will be used to the best advantage within their own grade and depot. These experiments will commence not later than"—
the date is left blank—
"and will be completed not later than"—
again, that is to be decided—
"When these experiments have been concluded they will be jointly reviewed with the object of reaching agreement on future arrangements."
Can anyone tell me the difference between those two sets of proposals? They seem to be exactly the same. The only difference that I can see is that of time.
Mr. R. C. Mitchell: Now that he has read both those documents and made his assessment, can the hon. Gentleman tell the House whether it is the official Opposition's view that the present ASLEF strike is justified?
Mr. Hughes: I hope that the hon. Gentleman will hear me through.
The only difference between the two sides in those proposals, which were not referred to by either the hon. Member for Reigate or by the Secretary of State on Friday, is the five days' difference in time. Why was British Rail not prepared to pick up ASLEF's proposal? Why did British Rail say on Thursday and Friday, and is now saying, that it is not prepared to talk directly to ASLEF? I discussed this question this morning with Clifford Rose, the industrial relations director of British Rail. The answer is that in the intervening five days ASLEF issued a strike notice. Frankly, that answer is not good enough. ASLEF called a strike because it believed that the proposals put forward initially in the two letters dated 23 and 25 June had been withdrawn. I do not know how that reasoning came about or why there has been this fog about it. However, the existence of a notice to strike being used as an excuse

43
not to have discussions does not stand examination. When the NUR strike notice was still in operation, the board was having discussions with all the railway unions in the Railway Staff National Council about the pay dispute. Why is British Rail not prepared to do that now?
I put it to Clifford Rose that the essence of good industrial relations practice is that, when one detects some movement on the other side, it is fastened upon, probed, encouraged and built upon. I regret that that has not been done on this occasion. My conclusion is that the blunt, unpalatable truth is that British Rail does not regard the ASLEF offer of 30 June as genuine. I have discussed the issue with Ray Buckton, general secretary of ASLEF, and I am satisfied that the offer is genuine. However, accepting that British Rail is genuine in its belief that it has been given the run-around, it should have tested the ASLEF response. Indeed, it should do so even now.
Time is short. As each hour passes—never mind each day—and the dispute proceeds, attitudes on both sides of the industry will harden. Press comment that the time may arrive when drivers are sacked and allowed to return only on the basis of individual acceptance of flexible rostering can do nothing but harm. Tragedy is becoming an overworked word, but it is a word that we cannot avoid using. The tragedy is that if flexible rostering is all that the board claims—that it can be done without major disruption to the social life of drivers—if the experiment had taken place we could have proved whether flexible rostering was workable. I believe, and most people do, that once flexible rostering was brought in there would probably have been no going back from it. At the same time, if the ASLEF counter-proposals had been examined in this genuine and free experiment to prove which was the better solution, there would have been no going back from that either.
British Rail is currently saying—I do not seek to misrepresent it in any way—that the rail network will be reopened only on the complete acceptance of flexible rostering, that there will be no more experiment and that its offer will never be retabled. I emphasise that the experiment from Bedford to St. Pancras may still be carried forward.
It is possible that British Rail will get its way. However, even the board must recognise that if flexible rostering is ultimately achieved by imposition and a refusal to discuss it, it will simply have achieved a pyrrhic victory. Even if every productivity proposal is imposed, there will be no lasting value to British Rail if they are to be implemented by a disgruntled and resentful work force.
I have never shrunk from acknowledging that ASLEF has a responsibility to seek an end to the confrontation. I believe that ASLEF accepts that. There is an equal responsibility on the British Rail Board, even at this stage, to achieve a settlement that is acceptable to both sides. However, there is a third party to the dispute that has a grave responsibility. On Friday the Government called upon the Labour movement to exercise its responsibility. I believe that Len Murray fulfilled that responsibility in the best tradition of general secretaries of the Trades Union Congress. The time has now come for the Secretary of State to exercise his responsibility to the travelling public.
I appeal to the Secretary of State to set aside the hard words that have been said, to call together representatives of British Rail and ASLEF and to point out to them the minimal differences that, but for the lack of trust, would
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have allowed those differences to be bridged. If the Secretary of State exercises his responsibility in a statesmanlike fashion, the railway system will soon be back to normal. That will set a more optimistic future for all concerned. I ask the Secretary of State to do that in the interests of everyone concerned.
5.19 pm
The Under-Secretary of State for Transport (Mr. Reginald Eyre): I congratulate my hon. Friend the Member for Reigate (Mr. Gardiner) on his speech and upon the motion. I welcome this opportunity to pay tribute to the magnificant efforts of rail users to overcome the disruption imposed upon them by these irresponsible strikes. In that praise I include commuters, to whom many of my hon. Friends referred, and inter-city travellers. I also include all those businesses that generally rely on the railways to transport their goods. I know that many of them have been extremely resourceful in coming to grips with the unnecessary hardship inflicted on them by these strikes.
I welcome the opportunity which my hon. Friend's motion presents to state yet again to the House the facts about the situation now facing British Rail, and about the Government's policies towards the industry. It is astonishing that in spite of the efforts of the British Railways Board, and of my right hon. Friend and myself in this House, so much misinformation is still circulated about the position. With industrial action once again paralysing the railways—this is the third strike this year—I make no apologies for repeating the facts today. Those of us who wish to see the railways survive and provide a modern, efficient service will continue to strive to put these facts—on investment, on public support, and on the true position with regard to modern working practices—over to the work force in British Rail and to the public at large.
I am glad to say, however, that more and more people are coming to recognise the reality of the situation. Last week, at the thirteenth hour, wiser counsels prevailed among the rank and file membership of the National Union of Railwaymen and the union's strike action was suspended. It is my fervent hope that wiser counsels will now also prevail among the rank and file ASLEF membership. Indeed, there are already some encouraging signs that it is beginning to do so.
I wish to quote from a telegram that it is reported Mr. Charles Swift sent to Mr. Buckton, the ASLEF general secretary. Mr. Swift, an engine driver and an ASLEF member for 35 years, demanded that the rail strike should be called off immediately. He said in the telegram:
"The majority of the 24,000 members are totally opposed to the strike and deeply disturbed by your actions. The men are being misled and their loyalty tested beyond endurance".
Mr. Swift, who is the leader of Peterborough council, is reported as saying yesterday:
"No one will win this strike but ordinary workers and their families will be the losers."
It is still not too late for ASLEF men to draw back from the precipice. I hope sincerely that they will do so in large numbers.
The ASLEF action hinges on flexible rostering. I start by addressing that issue. As hon. Members will need no telling, it is a complex subject.
Present working practices for train drivers are based on the agreement reached in 1919 that there should be a

45
guaranteed payment for an eight hour day, however long each driver works. Any time worked over eight hours in a day counts as overtime. But in each normal eight hour day a driver is actually productively engaged for British Rail on average for less than four hours. Its competitors, the coach operators and road hauliers, can employ their men productively for a greater portion of the working time. So the balance of competition moves in their favour and rail customers are lost.
British Rail could improve their efficiency by the process of flexible rostering, whereby on some days drivers would work seven hours and on other days up to nine hours. The total number of hours in a normal working week would become 39 instead of 40 as at present.
However, because of the increased flexibility in the use of drivers' time, the number of hours they spend in each day actually driving trains would be increased. Apart from more efficiency, there would be benefits for the individuals because the sheer inflexibility of the eight-hour day means more turns involving unsocial hours than the new system would require. That explains why the NUR, after most careful consideration, decided to accept the flexible rosters for guards. Eighty per cent. of the guards are already working flexible rosters and they are receiving the benefits. These have been described in a recent National Union of Railwaymen's journal, which stated:
"The flexible roster agreement meant a 39-hour week, more socially acceptable working, reduced unsocial booking-on-and-off times, additional rest days and grouping of time off."
It is also meant an extra £2·50 to £3 a week in pay. If that is what one major group of railwaymen have found, it would surely have made very good sense for another group to look carefully at the facts before making up their minds. Instead, and without giving their members a chance to consider the detailed facts—that is a heavy point of criticism of ASLEF that the hon. Member for Aberdeen, North (Mr. Hughes) did not mention—the ASLEF leadership maintained a wholly intransigent stance.
Mr. Robert Hughes: How can the Under-Secretary say that it has maintained a wholly intransigent stance when the effect of the proposals of 30 June is to recall the conference and to conduct an experiment so that all the misconceptions that the hon. Gentleman talks about, if they exist, might be disposed of? Will he encourage that process?
Mr. Eyre: I have noted the point made by the hon. Gentleman in his speech. I shall be coming to it. I shall say why it is not a proper account of the negotiations.
Of course, it is not just a matter of whether the men would be immediately better off. The main point is that the railways, by making better use of expensive machinery, would offer a better service to customers, and so the long-term future of their staff would be more assured. The good sense of flexible rostering is recognised in many train systems in Europe. It is only in Great Britain and the Republic of Ireland that a system of flexible rostering is not already in use on the railways.
ASLEF has still not delivered on flexible rostering after nearly a year of negotiations, arbitration and inquiry. It has ignored pressure from other unions, pressure from the TUC, the good offices of ACAS and the recommendations of Lord McCarthy. In January this year, at the time of the previous ASLEF industrial action, Mr. Ray Buckton said:
"Our established procedures in the railway industry are designed to make industrial action unnecessary. What the public
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should be asking is this: Why doesn't Sir Peter Parker and his board make full use of these procedures to resolve the present conflict".
The hon. Member for Nuneaton (Mr. Huckfield)—I am glad to see the hon. Gentleman in his place—wrote in the ASLEF journal at the time that
"a way must be found to put the dispute back to the Railway Staff National Council, and then probably back to the tribunal so Lord McCarthy and his Learn can examine matters in their tried and tested fashion".
That was the view of the hon. Gentleman at that time. The tribunal did indeed undertake such as examination and reported in May. Its decision was that the parties should agree to a system of flexible rostering but it noted the concerns of ASLEF and concluded that those fears could be met by a number of safeguards and criteria covering such matters as hours of work, overtime earning levels and existing agreements and practices.
The tribunal said:
"These safeguards are designed to meet all the significant fears and concerns of the ASLEF. They provide an effective alternative to the 8 hour guarantee agreement".
Lord McCarthy rounded off his view of this issue by saying:
"Unless progress is made on this question the future outlook for the railway system and railwaymen is bleak and unpromising".
British Rail agreed to all the safeguards proposed by the tribunal. There can be no possible grounds in reason for ASLEF's rejecting the findings out of hand. There can be no possible excuse for the irresponsibility of the ASLEF executive in issuing this strike notice and for imposing yet again suffering and hardship on the railway customers.
Mr. Foster: I agree that ASLEF imposed the strike, but is the Minister denying that British Rail unilaterally decided that it would impose flexible rostering, whatever the trade union did? Does he agree that since that time there has been considerable movement in the ASLEF position? Has it not agreed to carry out an experiment with flexible rostering provided that British Rail will carry out an experiment with its alternative? Has British Rail now not withdrawn the agreement to do that?
Mr. Eyre: I am coming to the point raised by the hon. Gentleman, but I am reciting the long-drawn-out, protracted negotiations and process of arbitration that led up to the question that he poses. I am trying to emphasise how ASLEF's views were considered at every stage and taken account of in Lord McCarthy's recommendations and the acceptance of the British Railways Board. It must be a source of bafflement to the many responsible railwaymen who were saddened by the consequences of the strikes earlier this year.
The British Railways Board has bent over backwards in its efforts to negotiate a settlement on this issue. Only 10 days ago it proposed to allow an experiment—referred to by the hon. Members for Bishop Auckland (Mr. Foster) and Aberdeen, North—of an alternative ASLEF proposal in a significant part of the railways, in parallel with a similar demonstration of the board's proposals for flexible rostering.
This olive branch was offered in an effort to help the ASLEF executive accept flexible rostering, without loss of dignity. The board asked for a response by 30 June. The ASLEF executive's only reaction was on 29 June, when it called an all-out strike and, in the face of that threat, later

47
suggested further talks. Quite rightly, the board refused to consider yet more talks under this threat, and took the only course open to it by preparing to introduce flexible rosters.
Mr. Albert Booth: The hon. Gentleman is implying that things have been said from this side of the House that were not factual. Will the Minister be factual in his statement of the actions that have taken place, and acknowledge that what he has said about the board's decision to implement those rosters on that date is highly misleading? The board took the decision and issued its instructions to regional managers on 28 May. It then said that it would introduce the new rosters and told them to prepare to do so. The subsequent decision was merely confirming one that had already been taken.
Mr. Eyre: I hope that the right hon. Gentleman will understand the difficulties of British Rail in managing the railways. Following these protracted negotiations, the arbitration and Lord McCarthy's judgment, plus the fact that the British Railways Board accepted all the implications, the board was surely entitled to move towards flexible rostering. In my view, it took the only course open to it by preparing to introduce flexible rosters.
Dr. Brian Mawhinney: There has been some confusion abut this, because people talk about the alternative ASLEF proposals. Will my hon. Friend confirm to the House that no detailed alternative proposals from ASLEF exist, even as of today? They have not yet been put on the table.
Mr. Eyre: As I understand it, there is a general proposal by ASLEF, the precise nature of which has not been defined.
I wish to emphasise that the ASLEF executive would not accept and recommend the principle of flexible rostering. That was the real difficulty for the board, because after all the protracted negotiation and arbitration it was clear that the ASLEF proposal was only to be talks about talks. That was the prospect before it because the ASLEF executive would not accept and recommend the principle of flexible rostering, after all the protracted negotiations and arbitrations.
Mr. Les Huckfield: I was tempted to intervene at so many points that in the interests of brevity I was saving them until my speech. However, the hon. Gentleman is now so misleading the House that he has to be corrected. Will he not stand corrected by the words of my hon. Friend the Member for Aberdeen, North (Mr. Hughes), who has quoted directly from the documents concerned, and be personally assured by me, because I have the documents as well, that the alternative proposals put forward by ASLEF, with the endorsement of the general secretary of the TUC and under the auspices of ACAS, were almost word for word identical with the requirements of British Rail? There is no difference.
Mr. Eyre: I wish to emphasise how patient the management of British Rail has been in all these negotiations, in the system of arbitration and in the way that it has reacted to Lord McCarthy's report. It cannot be criticised in any way for what it has done, and on that basis it is entitled to proceed to introduce flexible rostering.
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Lord McCarthy emphasised how important it is to the future of railwaymen and of the railway system that this should be done.
Sir Peter Parker, the chairman, has appealed to ASLEF members to convince their union leaders to see sense before the strike wrecks a great industry. We in the House must support the board in that appeal. I urge right hon. and hon. Gentleman in the Labour Party to use their influence to urge the ASLEF executive to call off this strike.
Mr. Robert Hughes: Why will the Under-Secretary not recognise what happened on Wednesday and Thursday of last week, when almost identical words were used—I have the words here if the hon. Gentleman wishes to see them—about concurrently calling off the strike and lifting the imposition of 4 July, which was already offered in the letter of 25 June? Why cannot that be the way to proceed?
Whatever has gone before, surely people must recognise that there is a time for movement. Is the hon. Gentleman saying that there is no possibility of any movement or reconciliation in the railway system? If he looks out on our roads he will see living proof that, however bad relations are, admittedly international relations, people can be reconciled. He will see the Datsuns and the Volkswagens which will show him that we have become reconciled with people who fought a war against us. Surely he must recognise the prospect of peace and bring the sides together to end the strike.
Mr. Eyre: The hon. Gentleman must understand that after these protracted negotiations and the system of arbitration that I have described the ASLEF executive would not accept and recommend the principle of flexible rostering. Therefore, British Rail was obliged to go on to introduce flexible rosters.
In every debate Labour Members—we have heard it again today—suggest that Government support for the railways has not been maintained, or has been cut. Numerous figures have been adduced to try to prove that false proposition. Let me give the House the true figures again in the hope that I shall be able to nail this once and for all. All the following figures are at 1982 prices, so we are talking about the level of support in real terms. In the last full year of the Labour Government, 1978, total central and local government support for British Rail stood at £716 million. In 1979, the first year of the Conservative Government, the total support was £792 million—a real increase of £76 million.
The next year, 1980, we increased the grant to £795 million. In 1981—a year of special factors—there was a further increase of £109 million to £904 million—I remind the House that these figures are all in real terms. This year the total support stands at £902 million. In other words, in real terms, the total support under this Government is now £186 million more than it was in the last full year of the Labour Government. The taxpayer has been paying more than £2·3 million a day towards keeping the railways running. Surely the Government and the taxpayer have done enough in that respect. They cannot be expected to go further when they see the services disrupted by wholly unnecessary strikes, and the work force still refusing to live up to the productivity promises made in last year's pay bargain, which are being paid for.
I shall deal with the false allegation that has been repeatedly made, that the railways have been starved of investment. The point is relevant to the speech made by

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my hon. Friend the Member for Ludlow (Mr. Cockeram). Nearly £2 billion at present-day prices has been invested in the railways since 1976. Last year alone, some £340 million was invested in the system. It is true that last year the investment ceiling was considerably higher than that figure and the board was unable to spend the last £100 million or so because the money was needed to meet current expenditure. Nevertheless, £340 million was spent on investment, as well as large amounts on track. The year before that, 1980, over £400 million was spent on investment. The year before that, the first year of this Government, £435 million was spent. Those prices are all at 1982 levels. So there has been a great deal of investment in the railways under this Government and under the previous Government. It does not help to mislead railwaymen on such an important subject.
But what has the taxpayer—who has been funding so much of this investment—seen for his money? Surely he might have expected the investment to produce a return—to make the railways more attractive to customers, and lighter in their demands on his purse. Instead he has seen a railway which has lost traffic to its competitors. He has seen a railway which has been increasing the amount it takes in fares and grants from the people of this country. He has seen a railway in which productivity has stagnated while other companies in the economy, such as British Leyland and British Steel, have increased their productivity. He has seen the £150 million investment in the Bedford to St. Pancras rolling stock standing idle because the unions want to operate it on the same basis as steam engines in 1919.
Above all, the taxpayer has seen the trade unions taking irresponsible and hasty industrial action, which is draining the industry's lifeblood. What is more, it is the taxpayer, as consumer, who is suffering from the industrial action. There may be a war between ASLEF and the British Railways Board, but, as with so many wars, the people who get hurt most are those who are caught in the middle—the commuters, struggling through traffic jams to get to work.
The ASLEF strikes earlier this year cost the railway over £80 million. It is money that is gone and will not be recovered. But that £80 million would have been sufficient to electrify the line from London to Leeds. The NUR strike last week cost £12 million—enough to buy, say, 70 of the proposed new diesel multiple units. Today, the railway is again at a standstill. Investment is being limited in the railway not by the Government's ceilings, but by a bleeding of resources through outright strikes, or, more slowly—but just as surely—through inefficient working practices.
Mr. Foster: The hon. Gentleman is making a very strong case—[Interruption.] I am not saying that he is making a good case, but he is making a strong case for saying that the wicked trade unions are behind all the frustration and inefficiency. However, will he bear in mind that, although the recent ASLEF dispute cost £80 million, there has been peace on the railways for the past 25 years? Will he take that into consideration and ask himself why the railways have been disrupted only since the Conservative Party came to power?
Mr. Eyre: I understand the hon. Gentleman's feelings and know that he is a great supporter of the railways. However, I ask him to look fairly at the case that I have
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presented. I share the hon. Gentleman's views. I should like to see a modern, efficient railway system. However, I ask him to consider seriously that resources are bleeding away. We need those resources to create a future for a modern railway.
We have heard in this debate—for example, from the hon. Member for Holborn and St. Pancras, South (Mr. Dobson)—about the reductions in rail staff in recent years. That was given as evidence of productivity gains in British Rail. However, unfortunately, those reductions were largely achieved by British Rail's total withdrawal from loss-making businesses or by adjustments to bring services into line with reductions in demand. The reductions have not meant more output per man—more tonnes of freight, or passengers per employee. As the British Railways Board's 1981 report shows, although the number of employees fell by 12,000 between 1979 and 1981, output per member of staff was slightly lower at the end of that period than at the beginning.
The simple fact is that railwaymen cannot be cushioned from the economic facts of life any more than employees of other industries can be.
Mr. Dobson: By how many did the number of senior civil servants in the hon. Gentleman's Department who prepared briefs for him during the equivalent period decline?
Mr. Deputy Speaker: Order. May I remind the Minister that many other hon. Members wish to take part in the debate?
Mr. Eyre: The hon. Gentleman missed the part of my speech in which I explained the essential factor about productivity. In that respect, British Rail has been marking time. The British Railways Board has realised that and has been striving to bring work practices up to modern standards. I hope that it will receive some support. The Government wish to see a modern railway and have provided funds for substantial investment in recent years and record levels of current support. The trade unions must accept responsibility for the slow progress that has been made.
Mr. Robert Hughes: Will the hon. Gentleman acknowledge that as a Minister he has some responsibility to the travelling public and should try to stop the strike? Since the NUR is to experiment on the Bedford to St. Pancras line, will the Minister—despite all that he has said about the history of the matter and his feelings about ASLEF—at least consider getting together with Sir Peter Parker, Ray Buckton and the ASLEF executive to see whether the small gap between the proposals on 25 and 30 June can be bridged in the interests of the railway community and of everyone else?
Mr. Eyre: The hon. Gentleman is confusing two issues. One concerns the Bedford—St. Pancras line and the NUR. British Rail offered the NUR the opportunity to work from Bedford to St. Albans on one system, and from St. Albans to St. Pancras on another system. That was not accepted. The hon. Gentleman referred to ASLEF, but I have summarised the protracted negotiations that took place and the arbitration that has been carried out Quite properly, the board has told ASLEF that it must now get on with flexible rostering. It is right and reasonable to require progress to be made in flexible rostering after such protracted negotiations and after arbitration.

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I urge every member of ASLEF who is dedicated to the railways' future to think most carefully about the course on which his union has now embarked. Let him ask himself where his real interest lies. Every day that the strike continues irreparable damage is being done to the railway industry. Coach traffic is booming as a result of the strike, adding further to the already massive switch from rail. In 1981, passenger carryings on National Express increased by more than 60 per cent. in just one year. In freight we have heard in the last few days of major customers deciding to leave the uncertainties of the railways. The parcels traffic is undoubtedly at risk.
Mr. Skinner: Is this the Government's policy?
Mr. Eyre: If the hon. Gentleman is concerned about these matters, he should advise ASLEF members to call off-the strike.
Mr. Skinner: At a time when 4 million are on the scrap-heap, mainly as a result of the Tory Government's economic policy, I do not see why ASLEF members or any other wealth creators in the economy—they are the real workers—should sacrifice thousands and thousands of additional jobs. That is what the Tory Government are asking them to do. They are using Sir Peter Parker and others to bludgeon ASLEF. They want to smash ASLEF and to throw more railway workers on the scrap-heap. I stand behind ASLEF and the NUR in trying to save jobs and not destroy them, which is what the Government have been doing ever since they came into power.
Mr. Eyre: The hon. Gentleman seriously misunderstands—
Mr. Skinner: I do not.
Mr. Eyre: —the need in Britain—
Mr. Skinner: I know exactly what the Government are up to.
Mr. Eyre: —for a modern and efficient railway service that will provide better occupations for the railwaymen themselves. The McCarphy report should not be ignored so grossly by the hon. Gentleman.
The Government entirely support my hon. Friend's motion. We join him in saluting the travelling public for their fortitude in overcoming the present hardships. The Government are doing everything they can to minimise those hardships, but great sacrifices are being made. We must support Sir Peter Parker and the British Railways Board in seeking modern working practices which will enable the industry to become the modern, efficient system that the public, the BRB, and most railwaymen want. We support the chairman of British Rail in urging ASLEF members to abandon their present damaging course.
5.54 pm
Mr. Les Huckfield: I speak as a Member sponsored by the Transport and General Workers Union and, with its consent, as the parliamentary spokesman for ASLEF. I begin by congratulating the hon. Member for Reigate (Mr. Gardiner) on being fortunate enough to win a place in the ballot. We are grateful to him for giving us the opportunity to debate this issue. The Government have not been generous in providing time for debates on railway matters.
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I do not intend to trespass on the generosity of the Chair in calling me to participate in the debate, but it must be said that there has been a misleading barrage of information from Conservative Members, including the Under-Secretary of State. I am tempted to put right a few basic facts and figures. For example, the benefits of investment in the Southern region have been extolled. The hon. Member for Reigate referred to the vast signalling improvements that are being made on the Southern region. The truth was presented by Richard Hope, the editor of the Railway Gazette International in The Times on 4 February, when he wrote:
"Cash limits have only been met in the past five years by deferring maintenance and renewals."
That is the parlous and perilous situation in which the railways find themselves, notwithstanding some of the rather misleading figures that Conservative Members have presented. If the Under-Secretary of State chooses a different base year for his figures, he will find that they do not produce such favourable results.
When we listen to Conservative Members we are led to think that it is impossible to run an efficient railway system without flexible rosters. The British Railways Board estimates—the Under-Secretary of State said that the board reckons to have lost about £80 million because of the ASLEF dispute at the beginning of the year—that if it can get from ASLEF in negotiations the flexible rosters that it wants, it will save a mere £9 million by 1985. Those are the board's figures and not mine. If that is the minimum gain to be won from flexible rosters, is the dispute really about flexible rosters or is it, much more significantly, about breaking a major transport trade union?
The Minister was kind enough to quote me when I said that it would be ideal for negotiations on the railways to be conducted within the railway machinery. I still subscribe to that view. However, the record of the British Railways Board in adhering to such procedures is not exactly a good one. It was the board's decision not to observe a tribunal decision last year that started the present series of arguments about flexible rostering. The board has spent a great deal of time condemning ASLEF for its apparent rejection of the tribunal's findings. However, when the board rejected the decision of the RSNT No. 75 last May it stated—this was its response on 21 July 1981—
"after all, the Tribunal were only making recommendations on a Clause 65(b) non-binding reference. They were merely giving the parties the benefit of a very considered opinion".
That is what the board said when it rejected the tribunal's decision. However, when ASLEF says that a tribunal's decision is unworkable it is lambasted throughout the country, especially in the press and on the media by the chairman of the board.
Last year various organisations were involved in a number of procedures. We went through the ACAS understandings and various stages of the RSNC and RSJC loco machinery. Again, it was the board which, in November and December 1981, broke away from the machinery. That led to the ASLEF dispute at the beginning of the year, which culminated in a committee of inquiry, which was set up under the auspices of ACAS. The McCarthy inquiry reported on 16 February. Included among its recommendations was the advice that the 3 per cent. increase should be paid, that it should not be

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connected with productivity issues and that negotiations on productivity should continue within the railway machinery.
The committee of inquiry under ACAS resulted in a complete vindication and justification of the ASLEF stand. It found very much in favour of the ASLEF position but the board proved rather difficult when it was pressed to implement those conclusions.
It is worth saying to the hon. Member for Reigate and the Under-Secretary of State that they seem not to understand the meaning of the committee of inquiry's ruling on 16 February that stemmed from the ACAS understandings of 19–20 August 1981. The Secretary of State keeps on saying that flexible rostering is a productivity improvement for which ASLEF has already been paid. That is not so. The ACAS productivity understanding of 20 August—it was reinforced by the committee of inquiry's ruling on 16 February—states:
"Specific rewards will be negotiated for those staff whose responsibilities are directly affected under these agreements."
That proves that even the Government Front Bench does not understand the ACAS understanding of last year—
Mr. Cowans: And still does not.
Mr. Huckfield: —and the ruling of the committee of inquiry which reported on 16 February. As I have said, the findings of the committee of inquiry were a complete vindication and justification of the ASLEF position.
Mr. Douglas Hogg: Is the hon. Gentleman really saying that?
Mr. Huckfield: The presence of the hon. Gentleman during railway debates has not exactly been noteworthy. Obviously he misunderstands the position.
Mr. Hogg: Childish nonsense.
Mr. Huckfield: We went to the Railway Staff National Tribunal on 15 and 16 March. It ruled on 4 May that flexible rosters between seven and nine hours should be negotiated and that a criteria and safeguards agreement for negotiations at local district committee level should be reached. The difficulty is that if one adheres strictly to all of the safeguards and restrictions that RSNT 77 recommends there cannot be flexible rostering. In other words, either the RSNT 77 recommendations on safeguards and restrictions are just a good idea, in which case it might be possible to have a system of flexible rostering with meaningless safeguards and restrictions or, if the safeguards and restrictions mentioned by RSNT 77 are to have meaning, are to be enforced and are to be rigorously adhered to, there cannot be flexibility in rostering.
Mr. Neil Thorne rose—
Mr. Huckfield: If the hon. Gentleman will allow me to finish, I shall give way. I have sat patiently through a number of speeches from the Conservative Benches that have given some misleading information.
The ASLEF executive on 13 May rejected RSNT 77, not because it was unacceptable but because it found that if the McCarthy safeguards and restrictions were to be imposed they would make that type of system of flexible rostering unworkable. That is why ASLEF rejected RSNT 77 on 13 May and that decision was endorsed by the annual conference of ASLEF a week later.
In the Minister's eyes, if the NUR conference decides to call off a strike, it is a good decision. It is democratic
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and in touch with the members. But if the ASLEF conference decides to take a rigid stand including the taking of industrial action, that is totally undemocratic and quite out of touch with the members. If the ASLEF executive has taken a decision over the past two weeks, it is only because it is a decision that is binding upon it by ASLEF's annual conference.
Mr. Neil Thorne: Is the hon. Gentleman saying that the flexible rostering that is worked on the Continent means that the entire railway networks of France, Germany and else where are unsafe, or is it that we have an entirely different system?
Mr. Huckfield: The difficulty is that so many Members on the Conservative Benches have not read the McCarthy tribunal's recommendations. If the hon. Member for Ilford, South (Mr. Thorne) wishes, he can borrow my copy. He can read there about the safeguards and stringent conditions that are recommended in the report. If those safeguards and restrictions are enforced, there cannot be a system of flexible rostering. That is why the ASLEF executive and the ASLEF conference decided that type of flexible rostering is unworkable.
To save the House's time, I wish now to turn to the matter at issue between the two Front Benches. Hon. Members have referred to the Railway Staff National Council discussions of 22 and 25 June. What is interesting is that on 22 June in the RSNC discussions the National Union of Railwaymen, although it had threatened strike action, was offered the facility of experiments on some of the topics that we have discussed today.
It was said to the NUR that there was an acknowledgement that that was a decision that might have to be put to its conference. On the same day, on the issue of flexible rostering, a similar facility for the possible conduct of experiments was offered to ASLEF. The British Railways Board might have thought that the offer would be rejected by ASLEF but what ASLEF said at the RSNC on 22 June was "Put it in writing". The two letters that have been quoted by my hon. Friend the Member for Aberdeen, North (Mr. Hughes) from Mr. Wilcox on 23 and 25 June do precisely that. The letters put that offer in writing.
I shall go further than my hon. Friend and quote from the draft minutes of the RSNC of 25 June. I emphasise to the House that they are draft minutes in the sense that they carry the board's endorsement but have not yet been endorsed by the unions. But that reinforces my point and not the Minister's. The board's acknowledged draft version of the minutes says that
"if the ASLEF could agree quickly to the proposal made regarding dual experiment being carried out, that imposition"—
the imposition of flexible rosters—
"would not need to be proceeded with."
The meeting took place in a fairly congenial and relaxed atmosphere. The draft minutes continue:
"It was hoped that, following receipt of the board's proposal in writing, the ASLEF would look favourably upon the suggested arrangements and he looked forward to hearing from them in the very near future."
Those minutes of the discussion that took place on 25 June say that at that stage the offer was still open and ASLEF could come forward and give its agreement to some type of experiment.
My hon. Friend the Member for Aberdeen, North has given details of exactly the way ASLEF responded to the proposal. If that was what was on offer—those are the

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minutes of the meeting, and my hon. Friend has given the details of the reply—one starts to wonder what the dispute is about. ASLEF went along to the TUC general secretary and to ACAS and offered to the British Railways Board precisely the same type of experiments that the board sought and that it held open in the minutes of RNSC on 25 June. Unfortunately, when ASLEF offered the board what it had been seeking in the RSNC of 25 June, the board not only did not want to hear about the alternative proposals but increased its demands. Over the weekend there were all sorts of latterly-denied press leaks—they were press leaks—which said that the board was now embarked upon the possibility of breaking the union and sacking railwaymen.
That is the type of proposal that was on offer and ASLEF responded to it. The Minister must address himself to that. The hon. Gentleman made reference to the strike call but the reference to the strike call and the strike call itself took place because, at the same time as the board was holding open the possibility of experiments, it was writing around the country telling depots that flexible rosters were to be imposed. There was a strike call, not because ASLEF did not want to negotiate, but because the board, at the same time it was putting an offer on the table, was writing to the depots saying that there would be an imposition of flexible rostering.
Finally, I should like to compare the treatment by the British Railways Board of ASLEF with the treatment by the British Railways Board of the NUR. The RSNC meetings of June 22 and June 25, which were fully-fledged discussions between the board and the railway unions, took place under threat of strike by the NUR. I do not say that against the NUR, but the discussions took place under threat of strike. Under threat of strike, Clifford Rose, the director of personnel relations of the board, flew down to Plymouth to talk at the NUR's annual conference. If the British Railways Board is prepared to negotiate with the NUR under the threat of strike, why is it not prepared to negotiate with ASLEF under threat of strike?
If the meetings of the RSNC of 22 and 25 June were amicable—I have quoted from the minutes and they were—and if since the 22 and 25 June the board's attitude has dramatically changed, as indeed it has, what has happened between those RSNC meetings and the board's present completely intransigent stance? What has taken place? The board's attitude has hardened now that it has found its chance to isolate ASLEF. It has come to some kind of understanding with the NUR and it now feels that it can pick off the other union.
Another development is that since the RSNC meetings in June the Government's guiding influence is again evident. During the weekend there were suggestions in the press that the Prime Minister's hand could be seen in some movements during the Falklands campaign. Her hand can also be discerned in some of the movements in the rail negotiations, as she and the Government hankered after yet another Falklands campaign. They believed that they could rouse such a campaign when they took on the Health Service unions, but the Health Service unions proved to have far too much public support. The Government believed that they could take Port Stanley again when they confronted the NUR, but the NUR conference overturned the decision to strike and the Government were thwarted. Having failed to take on those unions, the Government
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then decided to take on ASLEF. For a long time ASLEF has been the victim of one of the bitterest press campaigns ever mounted in Britain.
The board has deliberately refused to take advantage of the Major concessions that are now being made by ASLEF. It is obvious that the Government are encouraging the board in that intransigent stand. It is a dispute not so much about flexible rostering but about smashing ASLEF. The Under-Secretary of State should realise that, in taking on the union and in hankering after another Falklands-like campaign, his constituents will be the casualties. I agree with my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson) that if the Government can talk continually to the chairman of the British Railways Board, as they have been doing, they should also talk to the other parties involved. The Under-Secretary of State and his right hon. Friend have never ceased to tell us about their successive meetings with the chairman of the British Railways Board. They should now get both sides together and try to solve the problem before it is too late.
6.12 pm
Mr. Roger Sims: The hon. Member for Nuneaton (Mr. Huckfield) has given us an interesting account of his version of recent events from his detailed knowledge, which of course we respect. However, I noticed that, although he made frequent reference to ASLEF and the British Railways Board, he made no reference to another party—the travelling public.
I compliment my hon. Friend the Member for Reigate (Mr. Gardiner) not only on choosing this topic for his Private Member's motion but on the wording of the motion and for its reference to the travelling public. Those references have been reflected in the speeches of Conservative Members, especially that of my hon. Friend the Under-Secretary of State, but we have had little reference to the travelling public from the Opposition Members. British Rail relies on passengers. If there were none, British Rail would virtually cease to operate. Many passengers are commuters from various parts of the London area. Within my constituency, I could almost claim that commuting is our staple industry. Within and around my constituency, there are no fewer than 10 stations from which thousands of my constituents travel daily into London. I use the line except during the unsocial hours that we occasionally work in the House when British Rail, ASLEF and the NUR have gone to bed and we are still working. The NUR and ASLEF should realise that commuters are no longer the captive market that they were a few years ago. My constituents and those of my hon. Friends have been reaching London despite the fact that there is no rail service. They have had to leave home a little earlier and it will take them a little longer to get home this evening, but they are getting to and from work without the railway service.
Every time there is a strike, railwaymen must realise that more and more people decide that it is just as easy, and more reliable, to travel by car, either by themselves or with someone else. Every time there is a strike, more coach companies are used and see the advantage of setting up groups. However, the life pattern of many people is based on the rail service, especially around London. Strikes such as we suffered last week and are suffering now cause considerable inconvenience, to put it no higher. They upset business, domestic and holiday arrangements

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and last week we heard of the sad business of some students missing examinations for which they had studied for years because they could not get to school.
Strikes should be a weapon used rarely—the ultimate weapon used only in the most extreme circumstances when no other course is open. Why is there a strike on this issue? What is the purpose of the strike? Is it to attract sympathy for the cause? If it is, I assure the House that it is failing completely. It has the opposite effect. Is it to attract publicity for the case? One cannot deny that it is receiving publicity, but is the withdrawal of the entire service the only way to obtain publicity for a case?
I raised that matter with Mr. Buckton during the strike earlier this year and asked him why he did not publicise his case by more conventional means. He replied:
"You have asked why my Society did not give greater publicity to its viewpoint, though I am sure you will appreciate that a Trade Union does not have available the considerable resources provided by the Press and Publicity Department of the British Railways Board".
Whether that is true or not, anyone who listens to the radio, watches television or reads the newspapers cannot say that the names of Buckton and Weighell are unfamiliar.
The unions have had ample opportunity to put across their case. Last week, rather uncharacteristically, we heard that Mr. Buckton said that he had no comment to make. If access to the media is inadequate, which I dispute, there must be other opportunities to put across their case.
Many hon. Members at election time, anxious to meet as many people as possible, stand outside factory gates making speeches and dishing out leaflets. The House will not be surprised to learn that at election time I stand outside railway stations morning and evening talking to my constituents, handing out leaflets and putting across my case. That may be one reason why I have increased my majority each time. ASLEF's customers, the taxpayers, those who pay the fares and those who pay the £2·3 million a day to which my hon. Friend referred, pass through railway stations in my constituency and all round London twice every working day. ASLEF and the NUR should take advantage of the opportunity to put across their case, if it is as strong as they believe.
Strikes on the railways are doing a great disservice to the trade union movement and untold damage to the nation's economy. They endanger the British railway system and cause widespread inconvenience and, in some cases, personal distress to thousands of commuters.
On behalf of the travelling public—nearly all of whom are just as much working people as the members of the NUR or ASLEF—I say to those railwaymen "Argue your case in every way open to you but, meanwhile, for your own sake, for our sake and for the sake of the nation, go back to work."
6.20 pm
Mr. R. C. Mitchell: I am glad to follow the hon. Member for Chislehurst (Mr. Sims) because I believe that he has made one of the more constructive speeches today. I do not believe that the debate will be fruitful because too many insults have been bandied about from one side of the House to the other. The hon. Member for Reigate (Mr. Gardiner) made out that all British Rail's troubles are the fault of the trade unions, and the hon. Member for Holborn and St. Pancras, South (Mr.
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Dobson) made out that it is all the fault of the British Railways Board and the Government. We do not achieve anything by that. The hon. Member for Aberdeen, North (Mr. Hughes) made a reasonable and constructive speech except that when I asked him a crucial question he failed to answer. The right hon. Member for Barrow-in—Furness (Mr. Booth) may be able to answer the crucial question—do the official Opposition support the strike? I am happy to be interrupted if the Opposition Front Bench wishes to answer. I did not think it would. I had the answer, of course, from the hon. Member for Bolsover (Mr. Skinner). He believes that all strikes are justified. He fully supported the ASLEF strike.
Mr. Booth: The hon. Gentleman invited me to intervene. It may help if I advise him that I made it clear on Friday that we thought that the proposal by ASLEF on 30 June was one that we could back, and which would provide a reasonable and fair basis for progress to withdrawal of the direct implementation of flexible rostering and proceeding with the two experiments.
Mr. Mitchell: That still does not answer the question whether the right hon. Gentleman believes the strike to be justified. It worried me to see a programme on television at the end of last week, the point of which was "Do we need a railway system at all?" It is self-evident that we need a railway system for a variety of reasons—convenience, environmental, fuel-saving, strategic and so on. I can thank of dozens of reasons. The fact that that question is being asked on television is important. A number of people on the programme argued that a railway system was not needed because, as the hon. Member for Chislehurst said, people are finding alternative ways to get to work. Coach companies and bus companies are expanding and doing good business, but I still strongly believe that we need a railway system. That is not being helped by the present strike.
A railway system cannot be run as a purely commercial proposition. That is not done in virtually any country. It could be done if Beeching was followed drastically and all unprofitable lines were cut out. There would then be hardly any railway system. In my part of the country only the inter-city line from Waterloo to Bournemouth would remain. There would be nothing else in the region. A railway system has to be subsidised to keep communities alive.
The hon. Member for Ludlow (Mr. Cockeram) said that the National Bus Company had done very well. It has, and I praise its initiative. Some of its profits come from cutting out unprofitable routes. The result is that there are no buses in many villages in rural areas. That could be achieved on the railways, but it would be a disaster.
Many railway employees feel demoralised because, rightly or wrongly, they believe that the Government are anti-nationalised industries and anti-railways. They are worried about the Government's action of siphoning off the profitable part of the railway system to private enterprise. They feel that they will be left with the unprofitable part.
Mr. Eyre: To what is the hon. Gentleman referring? If it is hotels, they sustained a loss last year and the year before.
Mr. Mitchell: They are the less loss-making part, the plums. I accept that the shipping side sustained a loss last

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year. The railway employees are worried about the whole system being dismantled and the lack of investment. I saw a programme on television last weekend that showed a station master with a waiting room that had water pouring through the roof and he was sweeping it up from the floor. The significant remark he made was "How can I attract passengers back to the railways when it is like this?".
I do not expect that there will be cheers from the Opposition Benches when I say that I accept that there will only be major investment in the railways if there is improved productivity. I believe that there should be major investment. Rail electrification is one of the best things the Government could do to get the economy moving. There will be a spin-off in many other industries apart from those directly involved. There will be major investment only when the Government and the British Railways Board are satisfied that there will be a genuine response from those working in the industry on productivity and the acceptance of modern working methods. I am not saying whether that is right or wrong. I am not saying who is to blame, but it is ludicrous that new stock that should be operating on the Bedford-St.Pancras line is sitting in the sidings. Whoever is at fault, it is daft that that stock should be sitting there like that. Nobody will invest in modernisation if they fear that his investment will be wasted.
Mr. Robert Hughes: Will the hon. Gentleman acknowledge that the experiments that are to be carried out on the Bedford-St. Pancras line are a big step forward and should be welcomed? They point the way to initiatives in other areas:
Mr. Mitchell: I hope that the hon. Gentleman is correct and that that will happen. I should like to see that line operating with the new equipment as quickly as possible.
Some unfair comments are often made about Sir Peter Parker. I believe that he has consistently fought not only this Government but the previous Labour Government for increased investment. He has been a great friend to the trade union movement. He is now cast, of course, as the devil in this dispute.
Flexible rostering is one of the issues that is symptomatic, if nothing more—I believe that it is more—of what I meant when I said that there is a need for the railwaymen to accept more modern working practices. There was an article in The Sunday Telegraph yesterday describing a long interview with an NUR guard who had accepted flexible rostering. The article said that flexible rostering was appreciated by the guard's wife and family and that many other benefits had accrued to him. On balance he was pleased that he had changed to flexible rostering. The ASLEF executive is backward-looking.
As we have said for many years, we need one trade union and not three in the railway industry, although it is for the members to decide. But industrial relations would be much better if there were only one. There has been a lot of inter-union rivalry.
Let me answer the question that the Labour Front Bench consistently refuses to answer. I believe that the strike at this time is utterly unjustified. It should be ended as soon as possible. Last week's NUR strike showed that that union's executive was completely out of touch with the rank and file members. The delegates to the conference came directly from close discussions in their areas with the
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railwaymen, and they had a different story. As Liberal and SDP Members have said on numerous occasions, all trade union members should be balloted before a national strike is called. I am a long-time believer in that.
Mr. Cowans: Should there not then also be a ballot to go back to work, and might that not lengthen strikes?
Mr. Mitchell: That is the old argument. In a few cases it might lengthen a strike, but I believe that a ballot would substantially reduce the number of strikes. All the evidence shows that.
If the strike continues it will seriously harm the passenger and freight side of the railway industry. Trade will be lost and will not be regained by the railway. Only the railway industry and those working in it will suffer from a prolonged strike.
We need a thriving railway industry. The Government must subsidise it to a great extent, as is done in every other European railway system. The unions have a duty to co-operate to ensure modern work practices. Let us have less of the "we" and "they" and a little more recognition that only by working together can both sides maintain a viable and successful railway industry.
6.33 pm
Dr. Brian Mawhinney: The hon. Member for Southampton, Itchen (Mr. Mitchell) did the House a service in pointing out that, in his moderate and closely argued speech, the hon. Member for Aberdeen, North (Mr. Hughes) said nothing about ASLEF. I hope that people outside the House will note the fact that he expressed no regret that the strike had been called by ASLEF.
I congratulate my hon. Friend the Member for Reigate (Mr. Gardiner) on affording us the opportunity to debate the issue and on the moderation of his speech. The hon. Member for Aberdeen, North accused him of being intemperate, but what he said was a good deal more temperate than what Mr. Weighell has said about ASLEF in the past few days.
I wish to concentrate on that part of the motion which:
"condemns those union leaders who refuse to accept modern working methods".
My hon. Friend rightly drew a distinction between union leaders and the rank and file membership. My hon. Friend the Under-Secretary of State mentioned the experience in Peterborough. Last Wednesday members of ASLEF in Peterborough expressed to me their unhappiness and confusion at what they had been told by ASLEF officials at a meeting on Tuesday night. I arranged on the Wednesday afternoon to meet the chief executive of the British Railways Board. I took with me the leader of the Peterborough city council, Councillor Swift, whose telegram the Minister mentioned.
About a dozen men belonging to the ASLEF leadership in Peterborough invited me to meet them on Friday morning. Our meeting in the town hall lasted for over an hour. Conservative Members are accused by the Opposition of knowing nothing about the railway and caring less. I am pleased that those men in Peterborough felt that it was worth while talking to a Conservative Member of Parliament. They impressed on me their longstanding commitment to the eight-hour working day, but they accepted the inevitability of flexible rostering. They complained that they had been misled by their officials at the Tuesday night meeting. They had been led to believe

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that detailed alternative proposals had been made to the board. Councillor Swift confirmed that none had been made.
Mr. Huckfield: Not true.
Dr. Mawhinney: They accepted that over the past year all they knew of the industrial machinery pointed to accepting flexible rostering. Contrary to what the hon. Member for Nuneaton (Mr. Huckfield) says, they accepted, too, that there was a sense in which they had been paid for the productivity increases the previous year and had not delivered.
Mr. Huckfield: It is misleading for the hon. Gentleman and his hon. Friends to keep saying that. The ACAS understanding on productivity on 20 August was specific; if there were to be agreements reached on productivity the payments would be quite separate from the 3 per cent.
Dr. Mawhinney: I knew that it was a mistake to give way to the hon. Gentleman.
I was clear in what I said. The men told me that there was a sense in which they had received the payment and had not given the productivity. The hon. Gentleman is not in a position to argue, as he was not in Peterborough town hall.
We found a broad area of agreement. For example, it would have been acceptable to those men for the leadership to call off the strike and for British Rail to announce that it would not suspend any driver who did not put into practice flexible rostering in the 31 depots into which it was to be introduced today. That is an interesting difference from what Opposition Members have been saying. They have claimed that ASLEF wanted the British Railways Board to withdraw flexible rosters. My members did not ask for that. They said "Leave the flexible rosters in. Some of the drivers will drive them. Some of them will not. Just do not suspend those who refuse to work them for this seven-day period. It is not an indefinite period."
We have been told that the leadership called for a strike because the British Railways Board intended unilaterally to implement flexible rosters. That is not what the members in Peterborough told me. Their understanding was that if someone were suspended, obviously other ASLEF members would come out in sympathy, and therefore a breakdown was inevitable. That is distinctly different from what Labour Members have been telling the House today.
The members went on to say to me—
Mr. Huckfield rose—
Dr. Mawhinney: I will not give way. The hon. Member for Nuneaton has made a speech, and he has intervened.
The members went on to tell me that, within that seven-day period, they would expect ASLEF to reconvene the conference, reconsider the eight-hour day with a view of changing the conference decision on that subject, and produce detailed proposals.
I contrast most favourably the moderation and common sense of those ASLEF members and leaders of ASLEF in the Peterborough depot, whom I met on Friday, with the national leadership of ASLEF. That leadership has procrastinated, twisted and turned during the past 12 months to avoid coming face to face with the issue. As a consequence of the meeting that I had, and with the
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blessing of those whom I met, I sent messages on Friday afternoon to Ray Buckton and to the British Railways Board, saying that what we had agreed was a way forward, and telling them that not one of the ASLEF members at the Peterborough depot wanted the strike. Just as the NUR men told me, at a meeting that I had with them the previous week that lasted for two hours, that none of them wanted to go on strike—in fact, about 50 per cent. of them turned up for work last Monday morning—so the ASLEF people told me the same story. They understood, furthermore, that a strike would damage the industry. Peterborough is close to brickworks and cement works. For example, Ketton Cement near Peterborough has a two-week contract to move its cement by road, with a view perhaps to extending that for a further six months. That would mean a loss of £750,000 worth of freight in the Peterborough area alone, if the dispute goes ahead. That is how industry will suffer.
The ASLEF members told me that they understood that there would be a loss of jobs for railwaymen, both NUR and ASLEF members. They accepted that there would be damage to jobs generally in Peterborough, because Peterborough, as a new town, depends on attracting new people to it. Moreover, about 500 of my constituents commute from Peterborough to London every day, and the members accepted that there would be great inconvenience for those commuters.
I am committed to a good, strong and modern railway system. Moreover, I have taken part in railway debates in this House on previous occasions. I have pressed the Minister, as I am sure he would acknowledge, on the issue of electrification. My constituents will be unhappy to know that, although I have been pressing for finance for electrification of the East Coast line from Kings Cross to Peterborough and further north, the cost of the first ASLEF strikes this year would have paid for the electrification of the line from Kings Cross to Leeds—that would have taken in my constituency on the way. I have now had to tell the British Railways Board and my local railway people that I can no longer support investment for electrification until the railway gets itself sorted out. I see no point in throwing good money after bad if we cannot produce the modern system with modern methods that our country needs.
Let there be no question about my commitment to a good railway. I have a strong commitment to that good railway, but it must be a modern railway and one that is fit for this country in the twenty-first century. My ASLEF members—and my NUR members, too—have a loyalty to their union. I understand that. They said to me "If the strike is called, even although we are against it, and we do not want it, we shall strike". I understand that. Even Councillor Swift, who has been vociferous in his condemnation, is on strike today. I understand that loyalty to the union. I have been a union member for 12 years. I do not make fun of it.
Mr. Leadbitter rose—
Dr. Mawhinney: No, I shall not give way.
I am not trying in any way to destroy the union. However, those ASLEF members in Peterborough have a loyalty not only to their union, but to the industry and to their families.
Mr. Leadbitter: On a point of order, Mr. Deputy Speaker. May I raise a point of clarification?
Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman knows that a point of clarification is not a matter for me. The hon. Member for Petersborough (Dr. Mawhinney) makes his own speech, and must be responsible for it.
Dr. Mawhinney: My members have those other loyalties. The message, as I understand it, from those men in Peterborough is that they have put the union loyalty first at the moment, but that the union leadership should not believe that that loyalty will remain paramount—to use an "in" expression—for a long time. In my view, loyalty to their families and to the industry will start to supersede loyalty to the union before too long.
I was glad to hear the Minister confirm that the Government are determined to back the British Railways Board in introducing modern methods. I am glad, too, that he confirmed that the Government will continue to invest money in response to increases in productivity by railwaymen. What he said should help to reassure both industry and commuters who depend on British Rail, and will help the workers to decide where their ultimate loyalty lies.
6.46 pm
Mr. Harry Cowans: I was glad to hear the hon. Member for Peterborough (Dr. Mawhinney) because he has taken part in transport debates. I cannot say the same for the other Conservative Members who have spoken. He spoke at length about his dealings with railwaymen. I freely admit that I am an NUR-sponsored Member of Parliament. I do not think that anyone else who has spoken in the debate has ever worked in it. I spent 25 years working in the industry.
The hon. Member for Peterborough professed to know a lot about trade unions. He said that he met NUR and ASLEF members, but surely he, as a responsible member who represents them, could have said to them, if they felt that strongly, "Go through your organisation, your official branch, and make the point there." He could have taken another tack. He could have asked them to address the branch when all the members were present. That would not have been unreasonable.
Dr. Mawhinney: I thank the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) for his constructive comments. He may be interested to know that I encouraged ASLEF last week and the NUR the previous week to make their views known through the proper union channels, which they repeatedly did. The hon. Gentleman may also be interested to know that if the NUR strike had lasted for any length of time, I was to have been invited to address a mass meeting. I believe that the same thing may happen if this ASLEF strike lasts for any time.
Mr. Cowans: I am grateful to the hon. Gentleman for that enlightenment. However, what he says makes his support of the motion all the more remarkable. It is the most negative motion that I have ever seen. While the motion congratulates
"British Rail travellers for their determination to overcome the effects of industrial action"
there is not the slightest suggestion how the House or the hon. Member for Reigate (Mr. Gardiner) will help to overcome the causes of that industrial action so that such determination will not be needed which, I should have thought, was the type of motion that the hon. Member for Peterborough should be supporting.
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All that I have heard in the debate so far is a frantic attempt by the Government to say that it is everybody else's fault but theirs. Hon. Members may shake their heads, but that is the truth.
Unfortunately, and it is hon. Members' loss not mine, I have only a short time in which to speak because some hon. Members who have not worked in the industry talked for too long about matters of which they know nothing. The Government cannot absolve themselves from any responsibility.
Let me tell Conservative Members something that they do not know. Contrary to what they might believe, no trade unionist likes to strike, because it means that he loses money and that is what he works for. It is at the end of the day, when morale is low and he has been pushed into it, that the final action is taken.
The Minister has accused us of being strangers to the truth, of misleading the union's membership, of giving wrong facts, and of creating a false picture for railwaymen. Let us examine that for just two seconds. I should like to examine it for an hour, but I have not got that long.
If, as the Minister would have us believe, money is being poured in from a bottomless purse, can he say how it is—this is what drives morale down—that track maintenance throughout British Rail is threatened nearly as much as it was by Beeching—3,000 track miles—because there is no money? Can he tell me why, with such a bottomless purse, professional civil engineers in British Rail would not justify the safety of track and recommended its closure? It is good of the hon. Member for Reigate to worry about the passengers. A death bed confession is better than nothing. Where were the Government when all the speed restrictions were applied because the bottomless purse, from which money was pouring, provided insufficient cash to keep the track safe and to allow passenger traffic to run?
Will the Minister explain why such things were happening when he was "shovelling money in"—to use his expression? Why are railwaymen robbing Peter to pay Paul every day and night by taking units off one train to make another unit serviceable for the next day? That would be unnecessary if there was all the money that he was talking about. Perhaps when he quotes figures in future, reeling off amounts such as £900 million, he will break that down. We shall then see what the real investment is and what the Government's answer has been.
I was impressed by some of the arguments of the hon. Member for Southampton, Itchen (Mr. Mitchell). When the Minister said "What about the assets?" he fudged the answer a little. Not only profitable assets, but potentially profitable ones have been hived off. Perhaps the Minister will turn his attention to the next one, the British Rail Property Board, which is making money.
Frankly, nothing has come from Conservative Members that has anything to do with the passengers. If they really believed in the passengers and the customers of British Rail and wanted to do something, we would not be having this debate. Instead, they would be calling the parties together, putting the views of the British Railways Board on the one hand and ASLEF on the other and sorting the matter out.
The Minister has made a statement in the House and I intend to challenge him on it later. The NUR has suspended its action. The Minister has made great play of

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the acceptance of tribunal decisions. I hope that that holds good when the tribunal comes out in favour of the NUR. I shall expect to see him at the Dispatch Box saying "Granted."
6.56 pm
Mr. Eldon Griffiths: In the few minutes that remain there is no way that I can make the speech that I had intended to make. I want to speak in sorrow rather than in anger. I was a Minister in the Department of Transport for two or three years and I fell very much in love with the railways. No one can be close to railway people without having the greatest affection and respect for them. That applies to managers and workers alike.
I feel a great sense of sorrow that this great railway has been brought to a halt, causing appalling hardship to people. To give one example, I am chairman of the Special Olympics for the Mentally Handicapped. Two planeloads of mentally handicapped children flew in from the United States and Barbados yesterday. We had intended to take them up to Merseyside for the special olympic games for the mentally handicapped by train. What better way can there be? Instead, because of ASLEF's action, those children with their jet lag had to be shunted here, there and everywhere on buses. What kind of brotherly love is that from the unions?
I also feel sorrow because of the attitude of the Opposition Front Bench. I have great regard for the right hon. Member for Barrow-in-Furness (Mr. Booth), the Opposition spokesman on transport, who knows a lot about the railways. Does he not see the contrast between the chairman of the Labour Party in Peterborough, a lifelong railwayman, and a senior representative of ASLEF, who has begged that the strike be called off, and the Labour Front Bench? Why has it not had the same courage to demand that the strike be called off before it damages the railway?
I want to make some simple suggestions. First, one trade union in the railway industry would be better than two or three. Secondly, there has been investment, there needs to be investment, but it must be to improve the capital infrastructure of the railways and not frittered away in payment for overmanning and restrictive practices. I and the House know that that is the case and I believe that the vast majority of union members know that that is the case too. The problem is simply to convince their benighted leadership.
As in so many other industries, the railway industry should have a greater measure of industrial democracy. Both ASLEF and the NUR are democratic unions. Their constitutions say so, and their practices bear that out. However, if ever there was a case when industrial democracy should be given a chance to operate, it is now.
There is no reason why the honest and decent men who drive the locomotives on our railways should be forced to lose their pay, to cause hardship to the passengers and industrialists and to damage the railway system that they love without being given an opportunity to express their views on the matter. There is no excuse for ASLEF having denied its members the opportunity for a secret ballot before the strike. I look to the future. What the railway industry needs is confidence—
It being Seven o'clock, proceedings on the motion lapsed, pursuant to Standing Order No. 6 (Precedence of Government Business).

Orders of the Day
  SUPPLY
  [22ND ALLOTTED DAY] [FIRST PART]—Considered
  SUPPLY

    Unemployment
    7 pm
    Mr. David Penhaligon: I beg to move,
    That, in the opinion of this House, the continuously rising trend of mass unemployment in circumstances of world slump and a stagnant United Kingdom economy requires a government-funded, locally administered programme of capital, maintenance and conservation works, expansion of personal services for the elderly, the sick and the educationally deprived, two-year youth traineeships, and incentives for job-sharing.
    I recommend to the House the Select Committee report by another place. The Committee was under the chairmanship of my noble Friend the Baroness Seear. Much of what we have to say tonight is similar to the findings of that Select Committee because that was a remarkably useful document. If I could make the report compulsory reading for nearly all hon. Members, I would achieve something useful.
    There are 3 million unemployed. Everyone in the country knows that. We talk a great deal about the latest figure and whether it has gone up or down a few thousand. The figure of 3 million unemployed is tragic. Aspects of that figure are more tragic than the figure itself. For example, I draw the House's attention to the fact that 1 million people have been unemployed for over a year. More remarkable is the fact that 250,000 people under the age of 25 have been unemployed for over a year.
    Some of the social effects of unemployment are well documented and are known to hon. Members. They have been studied at length at various inquiries. Those of us who do not live in some of the more publicised areas where there are social effects of high unemployment know, merely by walking round our constituencies and talking to people, how much despair there is. I am sure that all hon. Members hear the forlorn question "Will I ever work again?" Time after time we all hear that question.
    Liberals believe that the long-term prosperity and employment prospects of the nation are dependent on a strong industrial base. That is overwhelmingly so. In the long run we see no alternative to renewed determination to achieve expanding productivity and encourage innovation and investment in our industrial base. Liberals believe that that, combined with a new industrial settlement based on profit sharing and greater employee involvement in the running of the enterprise, should be a long-term strategy for Britain.
    We recognise that the Government have made some progress on inflation and productivity, although we believe that the price paid has been too high. We believe that the nation would be insane to pursue policies that simply threw away those hard-won gains. Any short-term strategy that reduces competitiveness will, in the long run, do far more harm than good.
    A simple general reflation, particularly if the nation has not had the chance to endorse an incomes policy through a general election, could cause the entire United Kingdom economy quickly to degenerate into a disaster when we

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    would witness the bane of all Governments—simultaneous increasing inflation and rising unemployment. Therefore, we reject a simple general reflation of the British economy. However, we do not believe that that is any excuse for doing nothing. We accuse the Government of not doing enough for those who have been hardest hit.
    Some further analysis of the figures brings home that point. In January 1980 355,000 people in Britain had been unemployed for over a year. I have already said that that figure is now over 1 million. In January 1980 just 55,000 under-25s had been unemployed for a year, although that is far too many. The figure now exceeds 250,000. Now, in total, 1·1 million people aged under 25 are unemployed.
    Liberals believe that there is a strategy that can mitigate the worst effects of the recession and high unemployment without simply taking the economy back to where we started three or four years ago. The motion outlines the gist of what we intend.
    We want a Government-funded, locally-administered programme of capital, maintenance and conservation works, and an expansion of personal services for the elderly, the sick and the educationally deprived. We want two-year youth traineeships and incentives towards job sharing.
    Some people may ask why that programme should be locally administered. We advocate that on a number of grounds. We believe that such a system is much less bureaucratic than Whitehall. The people in charge will react faster than Whitehall. Schemes put together locally will be more appropriate to the locality to which they are applied than schemes dreamt up by Whitehall. The programme should be run by a combination of the Manpower Services Commission, county or district authorities, the local trade unions, the local businesses and probably some voluntary organisations.
    The emphasis of the organisation must be to help those who are particularly affected by the recession. It must be on improving infrastructure and training. The schemes should be directed at those who have been unemployed for over a year and the unemployed who are under 25. Local schemes are not difficult to envisage. Sewerage in Britain is becoming an appalling joke. There have been massive collapses in sewers built about 80 or 100 years ago in some of our Northern cities. There should be great investment in British Rail when the present dispute is settled, we hope sensibly, so that full advantage can be gained from it.
    There should be massive local schemes on insulation. The Government's alternative is to build nuclear power stations, which cost £1 billion each. We should like to see local schemes of improving local road structures and our transport. Those who live in rural areas, as I do, are not hard pushed to think of villages and towns where dramatic road improvements have been urgently needed for a long time.
    My hon. Friends will be going into greater detail on such schemes. It is not difficult to think of the infrastructure that can be improved. It is not difficult to think of schemes that in the long run will not just help the unemployed of today, but improve the infrastructure of the United Kingdom so that, when the economic revival comes, it is based on something real. We would also massively increase the number of home helps. That alone
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    could save the National Health Service hundreds of millions of pounds in care of the elderly—an issue that will become one of the great problems of the next decade.
    Training must be developed on two fronts. It is a remarkable feature of the current incredible level of unemployment that few highly skilled people are unemployed. If hon. Members do not believe me, they should visit their local labour exchange, talk to the manager and ask how many skilled people are currently available in his area. I agree that there are quite a few in some areas, but as a percentage of the total they are few. An improvement in the training of the British work force will mean that improved skills will be passed on to the British economy.
    There should be training for the 16 to 18 age group. During the next few years, emphasis should be placed on working towards a new frame of mind so that 16 to 18-year-olds are regarded as trainees, as in a half-way house between full-time education and full-time work. They should be regarded as full-time trainees, spending some time in local colleges of further education and some time in a work place. That would break down the ludicrous divide that has developed in Britain during the past decade of people being regarded as being either educated or working. There must be a transitional stage.
    Such a scheme must be far better than the youth opportunities programme. I recall the programme being introduced. I confess that at the time I thought that it was a sensible measure and that it could help to deal with some of the problems that I have encountered. I welcomed it, but it has degenerated and is no longer acceptable.
    One of the joys of representing a constituency such as mine, where accents are perhaps stronger than in others, and also being a native of the area, is that one receives letters that are written as the writer speaks. One of my dear farming friends complained to me about the local Manpower Services Commission. There were a couple of paragraphs of tirade about "they B's" down at the employment exchange. He then tore into the real purpose of his letter. He asked me why he did not have his free boy. "Harry up the road got a free boy. Bill down the road got a free boy. Where is my free boy?" Being a modern Cornishman he said that if they had run out of free boys he would have a free maid. My constituent clearly believed that it was his right to have either a free boy or a free maid. That is what YOP has degenerated into and why it is no longer an acceptable method of training our young people.
    A better scheme will be much more expensive than that which was recently announced by the Secretary of State for Employment. Training is an important part of giving our young people a real opportunity in life. The main thrust of the Liberal argument is that there is an alternative that does not stoke up inflation while helping those who are most affected by the recession.
    Restructuring in much of our industry is necessary. We know from our experience that much of it is painful, especially to those who are directly involved. But the Government must be seen to do far more for their victims. They must do more for their victims if they hope to continue with some of the improvements in industry that have been achieved. If they do not, the backlash that many people know is already building up will develop into a thrust that will push the Government's improvements to one side. Too many people have suffered a great deal. The Government would be foolish to ignore them.

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    I have outlined specific and practical measures to reduce unemployment that will not at the same time wreck a strategy, parts of which we approve of. A change in policy such as I have outlined is needed, to save our cities, our social life and the young people whom we know well. I hope that the House will accept the motion.
    Mr. Deputy Speaker (Mr. Ernest Armstrong): Mr. Speaker has selected the amendment in the name of the Prime Minister.
    7.15 pm
    The Minister of State, Treasury (Mr. John Wakeham): I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof:
    this House, greatly concerned about the problems of unemployment, supports the Government's policies to improve the performance of the British economy, which offer the best prospect of a permanent improvement in employment opportunities, as well as the Government's substantial programme of special employment and training measures designed to help those hardest hit by economic adjustment.
    The Liberal Party is right to use its Supply day to focus attention on the economy, which is a central issue, and on the United Kingdom's poor performance. We have no quarrel with that. There were passages in the speech of the hon. Member for Truro (Mr. Penhaligon) with which I agreed. I am not sure, however, that I agree with all of his anecdotal evidence. We were less than happy with the terms of the motion. It does not properly address itself to the gravity of the deep-seated problems that face the United Kingdom's economy, over and above the massive problems that face us as a result of the world recession.
    Our amendment recognises in part that it is not possible to discuss unemployment sensibly without looking more widely at the performance of the British economy and the way in which the Government have tried to tackle its deep-seated problems. We have recognised that the problems must be tackled with consistency of purpose if the economy is to provide and sustain a growth in employment.
    When the Government came into office we had witnessed the British economy become one of the weakest and most inflation-prone of those of all the major industrial countries. Its relative decline had been long run. That was demonstrated in the trends of rising unemployment and inflation. By 1980, inflation had risen above 25 per cent. and unemployment was nearly 1½ million. Our share of world trade had been halved, living standards in several European countries were half as high again as our own. Many of our great industries had long since ceased to be able to compete effectively in world markets. For example, we were building only three in every 100 new merchant ships; 25 years earlier we had been building three in every 10. In the car industry, by 1980, fewer than half of the new cars bought in Britain were made in Britain. In 1960, the United Kingdom was a net exporter of 500,000 cars. By 1980, we were a net importer of ½ million.
    We were losing our traditional markets, and the deep-seated problems of the British economy had been getting worse. Unrealistic wage settlements were rapidly helping to price British goods out of the very markets that could sustain our wealth and employment. Unit labour costs doubled between 1975 and 1980. In Canada they rose by 50 per cent, in the United States by one-third, in Germany they rose by one-sixth and in Japan there was no increase.
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    The increase in Britain as compared with our major competitors was marked, and a sure prescription for rising unemployment.
    In the years up to 1980 also personal incomes had been rising fast at the expense of company incomes. Between 1977 and 1980, real personal disposable income rose by 17 per cent. while companies' incomes fell by one-third. That squeeze on profits meant a squeeze on investment. A squeeze on investment means a squeeze on tomorrow's jobs.
    When we came into office, past failures had been catching up with us rapidly. The effect of that long run process in human terms can be seen in many areas. The failure to be able to compete effectively meant that we lost our markets, and the loss of those markets meant that we lost jobs. No one can deny the connection between the two.
    While this was happening, there was no shortage of demand in this country. The propensity to import proves that. But if there was no shortage of demand, there was a shortage of supply of British-made products of the right type, the right quality and the right price. During the 1970s, there was a 300 per cent. increase in wage costs while output rose by only 15 per cent. Only 5p in every extra £1 of demand went into higher output. The other 95p went into higher prices or higher imports.
    Of course, our problems were not solely of our making. They were compounded by the oil price shocks—the first nearly a decade ago and the second some three years ago. Each was equivalent to a loss of some 2 per cent. of GNP in OECD counties. As a result of those shocks, growth in OECD countries was halved and growth in world trade was also halved. A barrel of oil is now 26 times as expensive as it was in 1970. We are still living through the effects of the impetus that those price increases gave to the general rate of inflation and to the problems of adjustment that they caused.
    To a large degree, however, we the industrial countries brought the problems upon ourselves. There is widespread agreement that the economic policies pursued by the American Government in the late 1960s and early 1970s must take some share of the blame. This coincided with a boom in many industrial countries including our own, but the growth that we saw then could not be sustained. The oil price rises to which I have referred were but an extreme example of the surge in commodity prices generally, which in turn was just one symptom of the stress and strain under which the international economy was operating.
    The only solution to all these difficulties was to increase flexibility and to improve competitiveness with new products, improved quality in old products and lower costs, all of which Britain found it difficult to provide because of our deep-rooted domestic problems.
    Therefore, my right hon. and learned Friend the Chancellor of the Exchequer in his first Budget said that his strategy would be based upon four main principles. First, there was a need to strengthen incentives by allowing people to keep more of what they earned so that hard work, talent and ability were properly rewarded. Secondly, there was a need to enlarge freedom of choice for the individual by reducing the role of the State. Thirdly, there was the need to reduce the burden of financing the public sector and thus leave room for commerce and industry to prosper. Fourthly, there was the need to ensure so far as possible that those taking part in collective bargaining understood

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    the consequences of their action. That is the way to promote a proper sense of responsibility. People had to understand and accept that the only basis for real increases in wages and salaries was an increase in national production. Higher pay without higher productivity could only lead to higher inflation and unemployment.
    My right hon. and learned Friend also stressed that those four principles in themselves were not enough. We realised that it was crucial for the health of British industry to bring down inflation and interest rates. We recognised that inflation destroyed competitiveness, undermined confidence, created uncertainty and reduced consumption. We knew, too, that higher interest rates reduced the incentive to invest, cut company incomes and, like inflation, reduced confidence. Our economic policies therefore had to be aimed at creating the stable climate that would allow industry to change and to grow. Our priority has been the defeat of inflation because only with inflation under control and continuing moderation in the growth of wages and other costs is there a chance for competitive and profitable industries, with competitive and productive work forces turning out products that people want to buy. Only with these will there be new and permanent jobs.
    Bringing inflation down and keeping it down is the greatest single contribution that the Government can make to ease unemployment, because the link between unemployment and inflation is the key to understanding the plight that this country has suffered. The rise in unemployment is not the bill that we are paying for reducing inflation now, but the bill that we are paying for having allowed inflation to continue for so long in the past.
    In all this, we have led the way towards an international acceptance that responsible and balanced fiscal monetary policies are the way to become the masters rather than the servants of inflation. Other countries throughout the world are increasingly accepting the wisdom of that formula and their inflation rates, too, are beginning to fall.
    The aim of our economic policies has been to create the right climate for long-needed changes in the economy to take place, but these have been framed in the recognition that it is not the Government but the people who create the wealth and the jobs that flow from it.
    In addition to persevering with fiscal and monetary policies which create the climate for change, we have undertaken specific measures to encourage and foster enterprise and the growth in the jobs that go with it. First, we have sought to get rid of the excessive controls imposed by Government. These contributed to problems on the supply side of the economy. Therefore, one of our first and most important steps was, where possible, to sweep away, and where complete abolition was impossible, to ease the burden of those controls. Exchange controls, dividend controls and controls on pay and prices have been abolished, as have office development permits. Industrial development certificates have been suspended and planning controls have been eased, as have many of the more oppressive provisions of employment law.
    We have also set about reducing and reforming taxation. Income tax rates were reduced in the Government's first Budget to restore incentives and to provide scope for enterprise and initiative. We have reduced the weight of capital taxes. Through the encouragement of schemes for profit sharing by employees, we have promoted the wider ownership of
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    capital that is so crucial to our economic aims. We have removed some of the disincentives to de-mergers and have seen an encouraging trend in management buy-outs. All of these factors will increase the flexibility and adaptability of the British economy.
    Mr. Derek Foster: The Minister has given an extremely impressive catalogue of the initiatives taken by the Government to encourage enterprise to flourish. Can he explain how, despite all that, the Government have managed in three short years to destroy more jobs in the Northern region than were created in 15 years? Small firms are going out of business every day, and more enterprises have gone out of business in the North-East since the Conservatives came to power than were created previously. How has that come about?
    Mr. Wakeham: I do not know whether the hon. Gentleman heard the earlier part of my speech. The whole thrust of my argument has been that we are dealing with a deep-seated problem going back many years. Given the world recession and the changes that are necessary, the increase in unemployment which, most regrettably, has arisen in recent years has been the direct result of failure to deal with those problems over a long period, and not the result of the policies of the present Government. Our policies are designed to create jobs in the future and there are beginning to be signs that that is now happening.
    My right hon. and learned Friend the Chancellor's most recent Budget was described as a Budget for industry, which means a Budget for jobs. In it, £640 million was taken off the national insurance surcharge and industry's costs were reduced by the energy, construction and innovation packages. There was also £1½ billion to be spent on special employment and training measures in 1982 and 1983, excluding the community work scheme announced in the Budget.
    Mr. Robert Maclennan: I cannot quite follow the logic of the Minister's speech. He told the hon. Member for Bishop Auckland (Mr. Foster) that the Government accepted no responsibility for the doubling of unemployment since they came to office. Yet in almost the next sentence he says that the Government claim some responsibility for having produced a Budget for jobs. How many jobs did the Budget create?
    Mr. Wakeham: We are trying to achieve an improvement in the country's industrial structure. I am surprised that the hon. Gentleman does not regard that as the right policy to pursue. It is naive to suppose that one can look at so recent a Budget and decide whether it has been a success or a failure according to the number of jobs created since April. Having known the hon. Gentleman for many years, I know that he is capable of arguing on a better basis than that.
    My right hon. Friend the Minister of State for Employment will discuss further the employment measures that we are taking. Our expenditure plans have been framed to help those most badly affected by the recession. The plans published in the public expenditure White Paper last March represented a flexible response to changed circumstances, but that flexibility was tempered by a necessary prudence.
    There have been many calls for more money to be spent to alleviate unemployment. Today's motion is only one of

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    many such calls. We have had to resist pressure from our critics to reflate the economy. Superficially tantalising programmes have been advanced for higher spending and borrowing and lower taxes.
    However, it is worth bearing in mind the recent experience in France. Just over a year ago the new French Government implemented a policy of reflation in order to secure high growth and to reduce unemployment. The result, contrary to the trend in all other major economies, is that in France inflation is where it has stood for nine months—14 per cent. Unemployment has been rising faster than in Britain. Now the French Government have courageously taken action to put the economy right. With the latest devaluation comes a package of economic measures to put a lid on inflation and curb public spending. The word "austerity" replaces "expansion".
    If only our French friends had been in a position to learn at the outset from the failures of the Labour Government. They, too, relied on massive public spending and borrowing, on nationalisation, subsidies and controls to create rapid economic growth and full employment. But the alleged trade-off between inflation and unemployment failed to materialise. Unemployment and inflation rose together. Over the period from 1973–74 to 1976–77 unemployment more than doubled and price inflation reached almost 27 per cent. The pound sank to an all-time low and only crisis measures imposed by the International Monetary Fund brought back sanity.
    Mr. Penhaligon: The Minister could not have heard what we said. The argument for general reflation was dismissed. We recognised that it is in the long-term interests of Britain to have a strong industrial base. We made it clear that we want to do nothing to stop that progress. We would not act in precisely the same way as the Government, but we recognise that some progress has been made. The thrust of our argument is that there are specific and practical measures to reduce unemployment among those who have been the most hard hit. Can the Minister give us the Government's views on that argument?
    Mr. Wakeham: I said earlier that there was much in the hon. Gentleman's speech with which I agree. My hon. Friend the Minister of State, Department of Employment, will deal with the points raised.
    It would be a disservice to both the employed and the unemployed of the country to answer the call to alleviate unemployment with major new expenditure. To do so would be to fall into the old trap of trying to provide a short-term solution to a long-term problem. Yes, one can always buy jobs in the short-term, but in the longer term the price is more inflation. To try to buy those jobs would be to throw the economy back into the vicious cycle of inflation and unemployment. I agree, it is possible to buy more jobs, but whose jobs should we sell in doing so?
    We have also introduced specific measures to help reduce the restrictions that have long and damagingly hampered Britain's economic performance in the labour market. The Government have taken firm action to reduce these and help people price themselves back into jobs. We have set about restoring the balance of industrial power. We have sought to give the unions back to their members and to the workforces that they claim to represent. Excessive trade union power has been a major factor in the
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    growth of unemployment because excessive wage increases have priced unionised and non-unionised workers alike out of their jobs.
    Much of our industrial policy has been geared to the positive promotion of industrial change, and hence the generation of jobs. Of course, a great deal of money is spent on supporting the casualties of the past. Indeed, this year over 50 per cent. of the Department of Industry's budget still goes in this way. This is the price of past intervention and warning to those who ask for further Government intervention and means subsidisation But the emphasis even now is much more on support for innovation. We recognise that the Government have a role in accelerating the use of new technology. That is why we are supporting microprocessors, fibre optics, robot machine tools, computer-assisted design and manufacture, and advanced computer technology. That is why the small engineering firms investment scheme is helping this hard-hit sector to re-equip with new equipment for the upturn, and why we have put money into new technology. We are considering help with the fifth generation of computers. We are boosting the information technology revolution. The Budget included tax and expenditure measures amounting to £130 million over three years specifically to support and encourage innovation. By promoting industrial change we are promoting the new industries that will provide jobs for the future.
    Finally, I mention the encouragement we have given to small businesses. Among the measures we have introduced are the business start-up scheme, the loan guarantee scheme and the venture capital scheme. The last Budget, like its two predecessors, was designed to provide a special tonic for small businesses and we shall continue to publicise the measures that are available to them. The encouragement we have given is important because the small business sector is the real home of initiative and enterprise, quite apart from having a significant contribution to make to the economy in terms of output and employment.
    Mr. Tim Renton: As regards the small business loans scheme, can my hon. Friend, wearing his Treasury hat, assure us that, even if there are a fair number of failures among the small firms initially encouraged by the scheme, the Treasury will nevertheless view the continuance of the scheme with a kindly and generous eye? It is inevitable that in helping entrepreneurs to get under way some will go bust in the first year or two. If that happens it would be a pity if the Treasury were too pessimistic about the future of the scheme.
    Mr. Wakeham: I can give that assurance to my hon. Friend. The loan guarantee scheme has a factor built into it because we recognised that very point. There are bound to be a number of losses because that is in the nature of venture capital. We recognise that, and would not expect the Treasury to do anything else. We shall need to look at the experience gained and at the losses compared with the benefits. If any adjustments are necessary, we shall make them. The Government will encourage the scheme because we believe it is a success and is meeting a very important need.
    So we have done a great deal both specifically and generally to help to create a climate for a secure growth in employment. Our economic policies offer the best prospect of a permanent improvement in employment

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    opportunities. Inflation is now down to 9½ per cent. and its trend is firmly downwards. Getting it down and keeping it down is a pre-condition for a growth in output and employment which can be sustained.
    Most outside commentators agree with our assessment that output will rise and inflation will continue to fall in the course of 1982. Of course, unemployment is still at a tragically high level and the rate of return on industries' investment is still much too low. In spite of the gains in productivity, and the increases in competitiveness and output that have taken place over the past year, the economy is still at an early stage in its recovery from recession and from a period of painful but necessary change.
    Our economic policies have been designed to create the climate that will allow that recovery to gain strength. To do that we must maintain the strategy that we intitiated in May 1979 and have been pursuing ever since. The successes we have seen on inflation and interest rates are not the result of the 1982 Budget—the full benefits of that are still to come through. They are the result of previous Budgets and our determination to stick to our economic policies.
    However, there are limits to what Government can and should do. We have set out clearly the financial framework within which economic decisions can be made. But economic growth and the defeat of inflation are the responsibility of us all. It is up to work force and management now to ensure that the gains in productivity, competitiveness and profitability are not lost through excessive pay settlements. In the last analysis, a higher level of employment will depend not on what Government do but upon continued improvement in industrial competitiveness and profitability and sustained moderation in pay bargaining.
    7.40 pm
    Mr. Giles Radice: I should like to congratulate the hon. Member for Truro (Mr. Penhaligon) on the manner in which he moved the motion. Hon. Members have also heard an interesting but selective view of recent history and events by the Minister. I must say that the hon. Gentleman was remarkably complacent about unemployment. He was more complacent than almost any Minister I have heard in the House for a long time.
    The Government have been in power for three years. It is therefore legitimate for the House to make a judgment on their record in employment and unemployment. The facts speak for themselves. In May 1979, the total number of unemployed was 1,299,000. In June 1982, it was 3,061,000, an increase of almost two and a half times. However one views the figures, the increase is dramatic. I take first the long-term unemployed. In April 1979, those out of work for more than a year numbered 346,000. In April 1982, the figure was 994,000. The Manpower Services Commission says that the figure today is almost certainly 1 million. That is an increase of well over two and a half times.
    In April 1979, 190,000 of those under 20 were out of work. In April 1982, the figure was 500,000, again an increase of over two and a half times. Another means of studying youth unemployment is according to proportion of the age group. In January 1979,9 per cent. of the under-20s were unemployed. That was far too high. However,
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    in January 1982, over 22 per cent. of the under-20s were unemployed, despite all the youth opportunities programmes and so on. Youth unemployment is higher than among the rest of the population. It is rising faster and lasting longer.
    For many years, unemployment has been far greater in some regions than others, as I know, representing a Northern region constituency. It is, however, clear from the figures that during this recession the regions with already high unemployment have suffered the most. In the Northern region, unemployment in May 1979 was 7·9 per cent. In May 1982, it was 16 per cent. In Wales, in May 1979, it was 7·5 per cent. It is now 15·8 per cent. In the North-West, the figure in May 1979 was 6·7 per cent. It is now 15·1 per cent. In Scotland, the figure in May 1979 was 7·3 per cent. It is now 14·5 per cent. The new region to join the super-league is the West Midlands. Whereas unemployment in that region in May 1979 was 5·1 per cent. and below the national average, it is now 15 per cent.
    If one analyses the figures of total unemployed, the long-term unemployed and youth and regional unemployment figures, one sees clearly that this Government have presided over a dramatic increase in unemployment—an increase that has huge economic, social and personal costs. The Minister said nothing at all about that.
    The House of Lords Select Committee report on unemployment estimates that the fiscal cost of unemployment represents £5,000 per unemployed per year, or £15 billion. The report also concludes that unemployment is among the causes of ill-health, crime and civil disorder. I know from my surgeries—I am sure that other hon. Members will agree—that it is also a threat to personal happiness and family life. Again, nothing of that was heard from the Minister.
    The Government have three arguments to justify their approach. The first, which we do not hear so much about at the moment, is that things will get better. The Government have been saying this for three years. The Chancellor of the Exchequer on 23 December 1980 rejected out of hand a prediction that 3 million people would be out of work in Britain by mid-1982. The Chancellor was also telling the Commons Treasury Committee in March 1981 that he had considerable confidence in asserting that the recession would bottom out some time during the first half of the year. Yet, judging from the latest reports, recovery is once again put off into the future.
    The CBI is gloomy about business prospects. The London Business School has downgraded its growth forecasts. The Bank of England and, we are told, the Treasury have lost their optimism about what is going to happen this year. The Manpower Services Commission, in an interesting analysis in the Financial Times today of 15 forecasts, sees no chance of any reduction in unemployment this year. It is also very uncertain about what is going to happen next year.
    The second argument heard from the Government is that it is somehow not their fault. This was heard again today from the Minister. According to the hon. Gentleman, it was all the fault of the Labour Government and we are paying for what happened during the 1970s. Another version is to blame the trade unions or the world slump. I note that the Chancellor of the Exchequer, instead

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    of addressing himself to unemployment over the week-end, was thinking aloud about a third batch of industrial relations legislation.
    Mr. John Golding: He thinks that the election is in the bag.
    Mr. Radice: That is correct. It is right that the world slump is a factor. But neither Ministers nor Conservative Members admit that unemployment in the United Kingdom has risen faster and higher than that of all other European countries. We hear what happens to oil prices. We never hear that we are self-sufficient in oil and that the increase in oil prices should have allowed us to grow faster—not slower—than our competitors. Output has actually fallen by 7 per cent. since May 1979. This is the proud record over which the Government preside.
    The Secretary of State for Employment (Mr. Norman Tebbit): I wonder if the hon. Gentleman will construct a theory to explain why the Ford motor company in Britain, although fully equipped and staffed to build all the Ford motor cars that are sold in Britain, only sells about half that number because it only produces half the number. Does the hon. Gentleman blame the Government for that, or does he think that there is some little problem of industrial relations, inflation and other things that go back into the past?
    Mr. Radice: There has, of course, been a long-standing problem in the car industry as in other parts of our industry. Hon. Members on both sides of the House agree that we need to improve our competitiveness.
    Mr. Foster: Will my hon. Friend explain to the Secretary of State that the United Kingdom Ford motor company was the only part of the European Ford motor company making profits? Will the Secretary of State explain why that has happened?
    Mr. Radice: We can all select particular parts of the argument to suit our position. The Secretary of State wanted to interrupt me because he thought that I had made a good point about the falling output of the United Kingdom and needed a diversion, which is a well-known tactic of his.
    The third argument sometimes used by the Government is that there is no alternative to their policies, and we had much of that from the Minister. They say that there is no alternative to the policy of depressing the economy by monetary and fiscal squeeze and cuts in public spending, and that that is the only policy that any Government can ever pursue.
    The Minister said that other countries are learning from our experience. I do not know what they are learning. However, he is ignoring what is happening in other countries such as Austria and Sweden, where there is much lower unemployment and inflation. He mentioned France, and it was interesting to hear him read lectures to the French Government. However, unemployment is begin-ning to come down in France, as is the level of inflation, neither of which facts he mentioned.
    The Secretary of State may laugh, but those are the figures. The Government's attitude also ignores the proposals from many quarters—from the Opposition, from the Liberals and the Social Democrats, from the House of Lords Select Committee, from the CBI and the TUC. They also ignore common sense. Is it really likely that one could
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    create real jobs—that is what we hear about from the Government—by cutting demand, as the Government seem to believe? That is not possible.
    The Liberal Party has made some suggestions for alternative policies, of which, as far as they go, I am in favour. However, they do riot go very far because, with 3 million unemployed and 1 million out of work for over a year, we shall need a far more comprehensive and sustained effort by Government than was suggested, despite his eloquence, by the hon. Member for Truro. We shall need, over a number of years, economic expansion, sustained growth of output and expansion of public investment and public services to create jobs in house building, sewerage schemes, urban renewal, railway electrification, modernisation of telecommunications. These are all proposals that the Government have set their face against, but which would be valuable for the economy and in the creation of jobs. We also need more vigorous regional policy.
    We shall also need systematic job creation measures to help the long-term unemployed. Most of us are extremely disappointed with the Government's record on that. They have not got down to the problem. We shall need massive expansion of training to help the young unemployed.
    We shall also require a combined effort by Government, industry and the trade unions if the economy is to run at a higher level of demand, as we believe—I do not know if the Liberal Party believes it and I am not certain what the Social Democrats believe—that we have to run the economy at a higher level of demand.
    We must have investment by industry and if we are to keep inflation down we shall need an agreement on incomes—I believe that strongly. We are in favour of a national economic assessment, with the trade unions, and the Labour Party is far more likely to get such an assessment than any other party.
    Mr. Ian Wrigglesworth: At what price?
    Mr. Radice: I understand that the Secretary of State prefers an incomes policy of 3 million unemployed, but I do not think that this is a sensible way to run an economy. We can have growth in output as well as keeping inflation down. That is possible, and something for which we strive.
    Above all, what is required is political will. We have a responsibility to face up to the problems of unemployment. The Government did not do that. We have been told that the Government think that they can get away with 3 million unemployed. If that is the case, they are even more cynical than I supposed. They will do lasting damage not only to their fortunes, but to the economic, social and political fabric of the country.
    What is required is not just a new set of policies but a new Government attitude to unemployment. If the Conservative Party cannot change its views, it should make way for a party that can.
    7.56 pm
    Mr. Nicholas Lyell: The hon. Member for Chester-le-Street (Mr. Radice) resumed his seat after a burst of enthusiasm, but I wonder whether he might not be happier resuming it, not on the official Opposition Front Bench, but on the other opposition Bench. Perhaps it would be a good thing for the country if one day he did so.

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    I intend to make one or two radical suggestions and, since most radical reform comes from the Right, I feel that I am on strong ground. I shall feel on stronger ground, and my right hon. and learned Friends will also feel that, if I start by saying what I sincerely believe—that the sentiments in my right hon. Friends' amendment are much more soundly based than the broad mishmash—containing some good ideas, which I acknowledge—in the motion.
    There is no doubt that the Government's emphasis on the fundamental need to improve the United Kingdom economy and its ability to compete are not only to be applauded but are essential to the maintenance and improvement, for the vast majority of our people, of employment prospects.
    We must not forget when discussing unemployment that between 85 per cent. and 90 per cent. of the eligible working population is employed. If their jobs are to remain secure and to be of a nature that will keep the country in, or restore it to the forefront of, the industrial world of modern technology and service industries, we have to create and maintain a climate in which that 85 per cent. or 90 per cent. of jobs can be maintained.
    I can illustrate this from my constituency. In Hemel Hempstead we have a large number of businesses, some of which have gone through a difficult period as a result of many defects in employment practices and weaknesses in our economy. They underlie clearly, as all hon. Members must recognise, the recent rise in unemployment figures from the approximately one and a half million that we inherited to three million today.
    It is noticeable that just one of my local businesses—one of the larger ones—has laid off during these three years enough people to account for the whole rise in unemployment in my constituency. It is not the only business to lay off people, and this shows the underlying strength of so many of our firms. While jobs have been lost, even in my fortunate constituency, many jobs have been and are being created. It is the fundamental good sense of Government policy that provides the seedbed or the soil in which those strong jobs can grow and flourish. That is why I strongly support the fundamental ethos of the Government's amendment.
    Before putting forward my more radical ideas, I wish to applaud the part of the amendment that draws the attention to the new training initiative. I greatly welcome the applause given to that new training initiative by the right hon. Member for Crosby (Mrs. Williams) and her acknowledgment of the fact that this Government have put the scheme into effect, although the Labour Government were unable to do so before the general election when she was a member of the Labour Cabinet. The new training initiative and the new youth training scheme will provide 517,000 training opportunities for 16 to 17-year-olds and at least 300,000 new placements for those who would otherwise be unemployed. That is to be greatly welcomed. It is a radical reform from the Right and we should welcome it, just as the whole country is welcoming it. The fact that it receives more widespread support than from the Right alone is a sign of its strength.
    Mr. Foster: I cannot believe my ears. The most Right-wing Secretary of State for Employment that we have ever had happened to sign the dotted line but the initiative is the result of a consensus worked out since 1977 by the
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    education and training agencies and the voluntary organisations. How does the hon. and learned Gentleman dare to say such a stupid thing?
    Mr. Lyell: In his indignation, the hon. Gentleman has not listened to me.
    Mr. Foster: The hon. and learned Gentleman said that the initiative came from the Right.
    Mr. Lyell: I said that the scheme had been put into effect by the Right. The party of the solid and sensible Right has implemented what others have only talked about. [Interruption.] Some hon. Members may find that humorous, but it is a sad fact that when the Labour Government had the power they were unable to do anything, in practice, about the situation.
    However, I should like to build upon the rock of our sound financial and economic policies, which will sustain the jobs that we now have. I shall argue the case for national community service with a civil defence and home defence option. I recognise that that is to some extent a radical case, but I am glad that all the parties have given it some thought. That is beneficial. It may comfort the hon. Member for Truro (Mr. Penhaligon) to know that some of its elements can be culled from the motion. However, I say no more than that.
    We must ask whether the Government's policies—right as they undoubtedly are—are sufficient to enable us to tackle successfully the problem faced by Britain and by the Western world. No one expects a Government to dither over possible changes in the future. No one can govern from the Front Bench by saying that the Government might do this or that. However, such ideas can be aired from the Back Benches on both sides of the House.
    I pick up the figure of 1·1 million unemployed under the age of 25, because that fits neatly into my argument. Today, there are about 3 million unemployed, excluding school leavers. In July 1981 there were 2,850,000 unemployed, including school leavers. That figure, is somewhat lower than the figure for 1982. Nevertheless, at that time 1·16 million young people aged 24 or under were without a job and spent an average of 12 weeks without employment. That shows that even when the number of unemployed falls as a result of our sound economic policies—[Hon. Members: "When?"] As hon. Members know, to some extent, that is a silly question. I believe that those sound foundations exist and that the number of unemployed will fall within the foreseeable future. The more important question is whether that will, of itself, solve the structural problems facing Britain and all other nations. If the 300,000 new jobs created by the new youth training scheme are subtracted from the figure of 1·1 million it leaves a balance of 800,000. That is approximately equivalent to the number of young people who reach the age of 18 each year. In this decade, the number of those reaching 18 every year is between 870,000 and about 830,000. We already know that about the same number of young people will be out of work for the foreseeable future. I have chosen the decade as a suitable period, because it is hard to see beyond that, but sensible to make policies within that framework.
    Sensible people ask themselves whether there is work to be done. The answer is that there is work to be done in the social services, in caring for the elderly, in the Health Service, in education, in conserving and improving our environment and in home, local and civil defence. That

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    work needs to be done, and is highly suitable for young people. I echo the words of Professor Ralf Dahrendorf when I say that it is relevant work and that properly organised it could be fun. That is important if the work is to capture the imagination of the young. In addition, young people are ready and willing to serve. To some extent, such ideas have been canvassed by the body known as Youth Call. Recently, the report of the House of Lords Select Committee on unemployment considered these ideas. Youth Call built upon the work of Mr. Colombatto of the London School of Economics. It is constructive work and I have based much of my case upon it. The work was rather belittled by the report and that was emphasised by its reference to a "Mr. Colombattino". That is an interesting way of putting down an argument and it may be taken up by other hon. Members, with amusing effect. However, I assume that it was a printer's slip and not deliberate.
    Thus, I have shown that there is much work to be done. Mr. Colombatto pointed out that there were between 600,000 and 1·4 million jobs on the civil side, such as the social services. It can be argued that he has exaggerated or underestimated the number of jobs in each area, but I have considered the matter carefully and find no serious fault with the theory as a whole. To illustrate the value of his theory it should be borne in mind that at present it is difficult to finance ancillary staff to help with young children in the classroom. The education of young children is already aided by the assistance of sixth formers, but could be furthered by the introduction into the classroom of young people with some sense of vocation. It is obvious that young people could also help with the care of the elderly and so on and there is no need to expand that point.
    Mr. Harry Greenway: My hon. and learned Friend has touched on an important area. Would he tie in with what he has said the need to have more than good will and a need to have real knowledge of what a person has to do with young children?
    Mr. Lyell: I accept that. I have fairly long experience of the world of infant schools and playgroups. My wife is a trained infant school teacher with a good deal of experience of that area. One is always influenced by one's wife, as the Secretary of State knows well.
    Mr. Tebbit: Why pick on me?
    Mr. Lyell: Because my right hon. Friend is such a good example of all matters beneficent.
    There should be an opportunity for training for these posts, which would last between six months and a year. It would depend on the cost of the scheme how many jobs one sought to create and the length of time that one took. That there should be an element of suitable training is self-evident and it is not so difficult to train people when they are on a one-to-one relationship with existing staff that the scheme need fall down on those grounds.
    I turn now to the other self-evident need—the need for home and civil defence training.
    Mr. Ted Leadbitter: The hon. and learned Gentleman has tripped fancifully over the social and other services where there is a great need for manpower. So that I can feel happier about his fanciful notions, will he tell the House which Government have attacked those services more and have imposed expenditure cuts on those services that have caused
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    unemployment among teachers, among the ancillary services and among the hospital services? I am not here to listen to Hans Andersen's fairy tales. I wish to know which Government have done that. Tell us now.
    Mr. Lyell: The hon. Gentleman should do some homework before he accuses those of us who have done it of being fanciful. The hon. Gentleman should also knock a little economic sense into his head. He is so ready to criticise the ideas of others.
    Mr. Leadbitter: Confess.
    Mr. Lyell: The hon. Gentleman fails to recognise that if one does not keep public expenditure under control the jobs of millions of people will be endangered, as the failure to keep it under control by his Government some years ago damaged the jobs of many people, who have now been thrown out of work.
    Mr. Greenway: Will my hon. and learned Friend give way?
    Mr. Lyell: I shall not give way at the moment, although I am sure that my hon. Friend's intervention would be helpful.
    I would remind the hon. Member for Hartlepool (Mr. Leadbitter) that under the present Government 47,000 more people are at work in useful tasks in the Health Service such as nurses, midwives, and doctors than under the previous Government. That shows something about priorities that the hon. Gentleman seems to have forgotten. However, I have allowed myself to digress.
    I turn now to the important need for better home and civil defence training. I do not wish this to be confused in any way with our professional Army, which I would not involve in the training, but it has to be recognised that we know little or nothing—I think that the Falklands conflict has highlighted rather than hidden the fact—of what we might have to face if ever we were presented with armed conflict from the Soviet bloc. We wholly fail to think about or wholly underestimate the force of the conventional attack, let alone the nuclear attack, with which we might be faced. Our will and our ability to defend ourselves would be immeasurably advanced if we gave home defence and civil defence training to all our young people, as virtually every other country in Europe now does. Indeed, only Eire and Britain fail to take that precaution. Countries such as Sweden, Finland, Austria and Switzerland all do it as a matter of course. To those pacifists on the Opposition Benches who might be thinking of objecting, I say that this is a wholly defensive posture that should have their full support as well as the support of those of us who have a profound belief in the defence of our nation in any event.
    That kind of training could be carried out by a cadre formed from those who leave the Armed Forces. It is not generally recognised that 45,000 professionals leave our Armed Forces every year and it would not be difficult swiftly to build up a suitable cadre to carry out that training. We have in our 423 Territorial Army centres and in a substantial number of public buildings and other areas that are available the basic infrastructure on which such a system of training, based locally—here again I find something to hand to the hon. Member for Truro—could be built in all parts of the United Kingdom.
    Before I sit down, it is incumbent on me to deal briefly with cost. In order that this can be considered more

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    seriously and deeply I shall send a copy of the paper that I presented not long ago to the Konrad Adenauer institute in Germany, where I was glad to find similar thoughts being expressed by members of the Christian Democrats—the CDU. That paper sets out the costings in greater detail.
    In summary, on the basis of an honorarium, or payment of the same amount as would be provided under the new training initiative—about £25 a week—offsetting the costs by no more than the unemployment costs, which I am taking as £22·50 per week for each individual—that is literally the benefit and I am not offsetting any of the somewhat airy-fairy benefits that are often put forward as offsets by those who make this type of argument—it would be possible to provide 600,000 jobs a year on the basis of nine months' service for an overall cost of between £1,200 million and £1,500 million. That is not an insignificant figure against the background of important matters such as the public sector borrowing requirement. but it is not such a large figure that it is incapable of being contemplated. At this point I am entitled to say that there are other offsetting benefits that could be taken into account of a less quantifiable kind than the mere unemployment pay that goes out in cash from the Treasury. I quote one because the graph struck me so forcefully and because it probably has not been highlighted before. Even the crime figures follow with extraordinary accuracy the unemployment figures. This has happened through Governments from the late forties and early fifties. Crime is an expensive matter and I mention it as one of the less tangible offsets.
    I said that I would put forward some radical thoughts and I have come in for a certain amount of criticism from those into whose heads such thoughts have not hitherto entered, but I hope, nevertheless, that they will find a more fertile seed bed as time gives an opportunity for the hard carapace of the seed to crack and the shoot to grow. I hope that my seed does not fall upon stony ground in the Treasury as well as among Opposition Members.
    8.18 pm
    Mr. David Alton: I was interested to hear the hon. and learned Member for Hemel Hempstead (Mr. Lyell) talking about crime figures and the cost of unemployment, I hope that the Prime Minister, who has denied that there is any relationship between rising crime and unemployment, will take the hon. and learned Gentleman's argument on board. I was also pleased that the hon. and learned Gentleman referred to the Select Committee of the House of Lords, which was more than the Minister did. The report contains many fine proposals. It seemed that the Minister was oblivious to the economic and social costs of large-scale unemployment, which crucifies so many areas.
    The hon. Member for Chester-le-Street (Mr. Radice) talked about the need for an incomes policy. I agree wholeheartedly with him. I hope that he will relay that message to the Labour candidate in my constituency and to many of his right hon. and hon. Friends who do not believe in incomes policies. I agree that an incomes policy is entirely desirable.
    Mr. Radice: I do not believe in a statutory incomes policy, which I believe is the Liberal Party's policy.
    Mr. Alton: Hope springs eternal, but it is gratifying that the hon. Gentleman has come some way down the road of incomes policies. I hope that he will find it in his heart to join us in advocating a statutory incomes policy. As so many of his right hon. and hon. Friends and Labour Party candidates would dissociate themselves from any sort of incomes policy, the hon. Gentleman is somewhere on the right road.
    It came as no surprise to my right hon. and hon. Friends and myself to find that the Liberal Party had been given a Supply day this evening, especially when we learned that England would be playing in the World Cup. We last had a Supply day debate when the Liberal and Social Democratic Parties were taking part in another contest at Crosby on Merseyside. It seems that there is something more than coincidence in the timing of these debates.
    Mr. Golding: Is that why the Liberal Party decided to put up a Cornishman rather than a true Englishman to open the debate?
    Mr. Alton: English or not, I am always happy to follow in the footsteps of my hon. Friend the Member for Truro (Mr. Penhaligon). I am glad that so many of my right hon. and hon. Friends have been able to stay away from the World Cup this evening and to be in their places for the debate, and I am glad to see that some members of the official Opposition are present.
    I am sure that all hon. Members are aware of the old and true adage that the devil will find mischief for idle hands to do. Nowhere has the folly of leaving tens of thousands of fellow citizens on the dole queue been more vividly illustrated than in Liverpool, part of which I represent. To pretend that there is no relationship between the dole queue and mounting crime, or the dole queue and inner city disturbances, is at best naive and at worst a deliberate attempt to cover up the consequences of pursuing ruthless and mercenary economic policies.
    The hon. Member for Chester-le-Street asked for details of Liberal proposals. He should know that they are all outlined in our document entitled "A Chance to Work", which is available from the Liberal publications department for those who are interested. Before turning to the details of that document I shall direct the attention of the House to unemployment in Liverpool. There are many warnings in Liverpool for other areas which may not yet—perhaps this is true of Hemel Hempstead—have experienced the worst excesses of unemployment. Unemployment in Liverpool since 1971 has increased by about 200 per cent. In that year 5·1 per cent. of the local people were unemployed, compared with 3 per cent. nationally. Today 18·6 per cent. are without work in Liverpool compared with 12·8 per cent. throughout the rest of the country.
    The latest figures for Merseyside show an increase of 5,000 jobless with nearly 134,000 out of work in the region. This means that one in five Merseysiders are out of work. My hon. Friend the Member for Truro spoke about the effect that unemployment has on young people. Two out of every five on Merseyside who are under 25 are without work. Underneath those statistics are some alarming trends. More than 4,000 of the 5,000 new jobless on Merseyside are school leavers. There are 54 people registered as unemployed for every unfilled vacancy listed at the city unemployment office. Over 40 per cent of the

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    registered unemployed in Liverpool have been out of work for longer than a year, compared with 25 per cent. nationally.
    This generation has undoubtedly been especially hard hit, with about 53 per cent. of those unemployed between the ages of 19 and 34. In parts of the city the story is even worse, with up to 50 per cent. of the population jobless. The manager of one employment office, in Leece Street, told me this morning that 12,665 people are currently registered as unemployed and that only 491 jobs are available. Sixty per cent. of those registered unemployed in that office have been unemployed for 12 months and 54 per cent. are between the ages of 19 and 34.
    Not only do those figures highlight the insidious growth of unemployment; they show that a whole generation has been blighted by a curse that they are powerless to resist. In that city there will soon be more citizens without work than in paid employment. What have the people and the Government done in the face of industrial decomposition that has caused the loss of 89,000 jobs in Liverpool during the past decade?
    A year ago this week, after I had warned the House only weeks earlier in a debate on youth unemployment that a time bomb was ticking away in the heart of our cities, thousands of young people took to the streets and rioted. The Prime Minister appeared on television dressed in white and speaking at the Royal Agricultural Show. She subsequently appointed the Secretary of State for the Environment as funeral director for Merseyside to bury our remaining businesses one by one.
    Then, like Marie Antionette, the Prime Minister dispensed her patrimony. Let them have trees, festivals, and a garden centre but forget about jobs. In tackling the chronic problems of our inner cities, the Prime Minister and her Cabinet colleagues have demonstrated all the subtlety and sensitivity of a Sherman tank. The youngsters of Liverpool describe her as the Sid Vicious of British politics. Her cosmetic exercises will not disguise the harsh realities.
    The Government coined the phrase "real jobs" that the hon. Member for Chester-le-Street mentioned. They would do well to consider the merits of a £20 million garden centre on the edge of Toxteth in relation to real jobs. It is all very well for the hon. and learned Member for Hemel Hempstead to advocate that we should have more home helps, ancillaries and other professionals in local government—I support that policy—but since the Government took office Liverpool city council has lost £63 million in rate support grant. Many real jobs in the public services, such as those of street sweepers and social workers have been lost or not refilled. That is wholly attributable to the £63 million reduction in Liverpool's rate support grant. The story is the same in the private sector. The city planning officer for Liverpool estimates that in four years, another 30,000 people could be unemployed, adding to the mountain of unemployed.
    Since the Prime Minister took office, one real job has been lost in Liverpool every hour and a half. Without a determined effort to combat that calamity, the House can expect more disturbances and unrest once the distractions of the World Cup, the Pope's visit and the Falklands conflict have passed. In 1945, Sir William Beveridge made a speech to the Liberal Party Assembly that is contained in another book that I can commend to the House, also published by the Liberal Party publication
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    department, entitled "Why I am a Liberal". I understand from my hon. Friend the Member for Truro that some copies are still for sale.
    In that book, Sir William proclaimed that full employment was required in a free society. He could have been speaking about our job creation programmes and cosmetic remedies when he said:
    "Employment depends upon spending. It must become the responsibility of the State to ensure that spending in total is adequate for full employment, because no other body in the community has sufficient powers adequate for the purpose and adequate spending will not come automatically. But spending, in addition to being adequate, must be spending to advantage, not digging holes and filling them up again and not spending on luxuries and trivialities while any substiantial proportion of the people go short of essentials."
    He went on to draw a distinction between outlay and spending, preferring the word "outlay" because it suggested design and the careful laying out of money for a purpose rather than getting rid of money, whatever the object.
    In the same spirit of design and outlay—the spirit of Keynes and Beveridge, both members of the Liberal Party—Liberals today commend the proposals in the report of the House of Lords Select Committee chaired by another eminent Liberal economist, Baroness Seear, and our document "A Chance to Work". Liberals believe that where there is work, people should be employed to do it. If there is insufficient work to keep everyone employed full time, rather than paying people to make things that are not needed, unemployment should be reduced by work sharing.
    The two methods of attacking unemployment are not mutually exclusive and both should be used. Unemployment, at an annual cost—something about which we heard nothing from the Minister when he talked about the effect on the public sector borrowing requirement—
    Mr. Don Dixon: I am interested in the Liberal Party's attitude towards work sharing. Does the hon. Gentleman mean that living standards and wages will be reduced?
    Mr. Alton: No. Liberals believe in wealth sharing. Our proposals for industrial democracy and for ensuring that wealth is shared in the community must go hand in hand with work sharing. Not only should people have the chance to do a job; they should have the chance to earn a decent income that will enable them to live decent lives. At present we have a crude form of work sharing—it is called unemployment. Surely we can organise matters better than at present, when 12 per cent. of the population are continually unemployed and the rest have work.
    The Minister made no reference to the cost of unemployment. It now costs about £5,000 a year to keep people on the dole queue. That is a total cost to the Exchequer of about £15 billion a year. That is not an efficient way to lubricate the economy but a tremendous waste of lives when there is work to be done.
    Mr. Lyell: The hon. Gentleman said that 12 per cent. are continually on the dole. That is not correct. Among that 12 per cent. a high proportion of people are moving from one job to another. It is important to recognise the length of time that they are on the dole. It is important not to suggest that one can create public sector jobs at great expense without doing damage.
    Mr. Alton: There are about 12 per cent. out of work. The hon. and learned Gentleman is right to say that some of them will find another job. Equally, some people in job creation programmes and work training schemes will come out of those schemes into unemployment. The sad truth is that an enormous number of people are becoming unemployed for longer and longer periods. I could take the hon. and learned Gentleman to parts of my constituency and introduce him to people who have been unemployed for most of the past decade. That is what he must see. They are not temporarily out of work but have been unemployed for a long time.
    As to the hon. and learned Gentleman's second point about the cost involved in creating jobs, I believe that we cannot afford not to. I refer him to paragraph 14.2 at page 142 of the Select Committee report, which states:
    "In our opinion, no government has yet really faced the costs and consequences of continuing widespread unemployment and balanced these against the costs of remedies."
    If we do nothing to tackle unemployment, the costs involved in riots and disturbances and in leaving people out of work—the futility and bitterness in their lives—will continue to well up. That is a price that we cannot afford to pay.
    I turn now to the specific proposals advocated by the Liberal Party. About 400,000 building workers are unemployed, yet only two weeks ago at Question Time the Secretary of State for the Environment, in reply to a question from my hon. Friend the Member for Cardigan (Mr. Howells), admitted that 500,000 homes in England and Wales—2·7 per cent. of all households—are still without an inside toilet, running hot water or a bathroom. What a crime that is, in this day and age. That is work that must be done. Some homes must be improved and others refurbished. My hon. Friend the Member for Rochdale (Mr. Smith) has said that we should introduce more improvement grants for rewiring. That is a sensible suggestion for many of our older areas where a full improvement grant cannot be obtained for simple jobs such as that. It is essential for many homes that are becoming dangerous because of the state of the wiring.
    Mr. Stephen Ross: Will my hon. Friend agree that it is misleading for programmes such as "The Money Programme" to say that houses built before 1919 can get a 90 per cent. grant for reroofing? That does not apply in many authority areas. Only a limited number of authorities can give such grants. It is still discretionary.
    Mr. Alton: Yes, indeed. We should like to see an extension to the housing action area programmes to ensure that many houses will qualify for grants in the future which do not at present. We would put the emphasis on grants for renovation and improvement rather than the building of more houses. In Liverpool there are some 6,000 empty council houses. We do not need more; we need to improve the quality of those already there. That needs sensitivity in planning. It is madness that we have reduced our energy conservation programme. Insulation programmes have dropped by about 60 per cent. over the last 12 months, although one third of the heat that goes into people's homes goes out through the roof. That is nonsense. We should employ people to do those jobs while saving energy at the same time.
    In cities such as Manchester the sewerage system is falling to bits. Since 1975 there have been over 50 major collapses in the central area. There are 35 miles of pipe
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    that need replacing. It places at risk the health and safety of citizens. What sense does that make while building and construction workers are paid to be idle? The system would cost about £60 million to replace, yet the water authorities are allocating £2 million a year. On that basis it will take 30 years to complete the renewal and by then the next ring of the city's system will have started to crumble and need renewing. The project would use entirely British products, and of the £60 million about 60 per cent. to 70 per cent. would be labour cost. That would provide about 4,000 jobs for at least one year.
    There are many similar sensible projects which could provide useful employment. Sir Terence Beckett of the CBI pointed out:
    "The infrastructure in Britain is beginning to suffer very badly. We don't have enough rolling stock on the railways; the roads are falling into disrepair."
    When my hon. Friend the Member for Colne Valley (Mr. Wainwright) asked Liberal associations throughout Great Britain for their suggestions for regional regenerations, many sensible ideas were put forward. Councillor Jim Hepple, a Kent Liberal councillor, suggested that it would be sensible to complete the missing link in the M20 from Maidstone to Ashford. He suggested that coastal defence works in north Kent and the Isle of Sheppey were something that the area needed and that would provide jobs.
    The Essex county council Liberal group suggested land reclamation and land drainage schemes. The northern regional Liberal party has suggested that rivers could be cleaned up. It suggests that 500 jobs could be created by cleaning up the Rivers Tyne and Tees which it describes as the filthiest rivers in the United Kingdom. Councillor Eric Robinson of the Shropshire Liberals spells out the economic and tourist benefits for central Wales and west Shropshire that would result from improving the stock, the signalling and the lines on the Cambrian and Central Wales line. Cambridge city Liberals have asked us to urge the Government to complete the electrification of the railway line from Bishop's Stortford to Cambridge and Royston to Cambridge. The list goes on and on.
    Mr. Golding: What goodies do the Liberals have for north Staffordshire?
    Mr. Alton: There will be many suggestions for new jobs. The examples I have given are purely illustrative and demonstrate that all over the United Kingdom the Liberals are planning for when we form an alliance Government. We will then have the opportunity to implement some of the proposals.
    Some hon. Members will quarrel with the cost. It is worth calculating, however, the cost in cities such as Liverpool of not tackling unemployment. Our programme recognises that the scourge of unemployment threatens the order of a free society. It recognises that the State is here to serve the citizen. Liberals are often accused by Conservatives of taking a first step towards Socialism. The Labour Party sees our approach as a last-ditch defence of capitalism.
    Our programme for conquering unemployment is neither. It is not a choice between unemployment and inflation or between the State and the individual. Taking production, distribution and exchange into the hands of the State has little to do with full employment. Employment depends on spending and not on the increased regimentation of the individual by the State. Equally, the

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    Government must learn that liberty through economic servitude, as well as from arbitrary power, depends on the provision of employment for all our citizens.
    I urge the House to support the motion and to reject the Government's amendment.
    Several Hon. Members rose—
    Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. It may help those who are waiting to be called to know that the wind-up speeches are due to begin at 9.30 pm.
    8.40 pm
    Mr. Tom Benyon: I am glad to contribute to the debate. The motion and the debate have been a great deal more imaginative and constructive than many others on the most important issue that faces the Government and the nation. Many such debates have merely recycled ancient arguments, and repetetive cant characterises them.
    I am sure that all hon. Members believe that unemployment is an unmitigated tragedy. It is a social evil without parallel and an utter waste of national and personal resources. It leads to increased vandalism and other crimes, to increased psychiatric problems in the home, to an increase in social tension and to a breakdown of the family unit. So far no one has mentioned the seriousness of an increasing proportion of coloured people being unemployed compared with the white population.
    About 3 million people are unemployed. Frequently in such debates the Opposition accuse the Government of being cruel and having engineered these circumstances as a caprice. No one with their democratic marbles arranged in the correct order could believe that a democratic Government could wish for or engineer the tragedy that now obtains. We are not in the business of spinning dreams to our electorate. It is usually far more intelligent than it is given credit for. It must realise that we would reduce unemployment if we could, consistent with maintaining our most important electoral pledge to reduce inflation. Inflation is the main engine of the unemploy-ment that we are fighting. We made our attitude clear before the election.
    Mr. A. J. Beith: Is not the basis of the Conservative difficulty that they refuse to accept an interventionary incomes policy, so must rely on unemployment to control inflation?
    Mr. Benyon: If I continue, I might touch on that point.
    We face the problems of balancing the circle of inflation and unemployment. It is easy to identify the problem but much harder to produce constructive and workable solutions. The Western world faces an industrial revolution. We are too close to it to see it clearly. The recession, the introduction of the microchip, improved communications, which have vastly outstripped our wildest imaginings five years ago, the reduction in over-manned industries, industries dying apace and the change in the prehistoric practices of which the Labour Party has been the custodian and guardian for so long have swiftly changed the scene. That is why I say that we are facing an industrial revolution.
    I do not wish to make an overtly party political speech because this is a matter that transcends party divisions. However, to date, the trade union movement has not accepted its full share of responsibility for the present unemployment. It does not seem to see clearly that
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    workers cannot continue to enjoy an increased standard of living without increased productivity and unless they embrace the necessary changes. If we do not embrace those changes, our competitors will do so and will beat us to the markets. This has already happened. The trade union movement bears a considerable responsibility—not by any means the whole responsibility, because in these matters there is no absolute black and white argument—tor the unemployment that we are experiencing.
    Mr. Foster: The hon. Gentleman seems to be accusing the trade union movement of not understanding that improvements in productivity are necessary. That is quite unfounded. For 25 to 30 years, the trade union movement has understood full well that productivity gains are necessary. Its argument and the argument of the Labour Party is that we have not had the productivity gains that are necessary because of the serious lack of investment by the hon. Gentleman's friends.
    Mr. Benyon: I thank the hon. Member for Bishop Auckland (Mr. Foster) for that intervention. It would be useful if, after this debate, he telephoned the general secretary of ASLEF and told him that. The whole burden of our argument and, as I understand it, the argument of the management of British Rail against that obdurate union is its failure to embrace modern practices and its insistence on maintaining practices that may have been highly relevant in 1918 but are singularly irrelevant in 1982. The hon. Gentleman and I are in complete agreement. I only hope that he manages to explain to the leader of his party the point that he makes so compellingly to me, so that he can pass on that important message.
    Many changes will need to take place in the attitude of workers. No longer will it be possible for people to join firms and know that they can work there up to the age of 60 or 65, with a three weeks' annual holiday. The pattern is changing. I implore my party—indeed all parties—to watch how the pattern changes, so that we can adapt our policies to fit this changing view, this kaleidoscope of the current scene, which has been shaken so violently by matters that are totally outside our Government's control. Governments often tend to go from crisis to crisis, hoping to survive one month or three months longer. We need to take a longer look. We should consider the possibility of work sharing. We should find what does not work, and discard it.
    It has been said in many quarters that one of the panaceas or palliatives may be early retirement. I had the privilege to go to France with the Select Committee on Social Services to see President Mitterrand's dream in reality, and see whether early retirement encourages employers to employ 16 to 20-year-olds. Unfortunately, that does not seem to be happening in France. I hope, therefore, that before bringing forward proposals, Governments and Oppositions will study what is being done abroad to see whether what they propose works there. If what they intend does not work there, it cannot possibly work here.
    I agree with my hon. and learned Friend the Member for Hemel Hempstead (Mr. Lyell) who talked about the need and opportunities for employment in service industries to look after the old, the needy and the educationally deprived. It is a considerable sadness to me that Oxfordshire county council does not have the funds

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    to provide educational facilities for sub-normal 16-yearolds. Cuts now will result in increased costs upon the social services later when families are unable to cope with their problems.
    I hope tilt the Government will see a way to increase the rate support grant. Sadly, we cannot hypothecate it to a particular purpose. When funds to local authorities are increased one is always worried that they will be spent on increasing their bureaucracies. Perish the thought that that would happen in Oxfordshire. However, it does happen and it would be nice if there were a way to hypothecate it.
    Much of the debate on unemployment that takes place on our television screens does irreparable damage to our democratic structure. A party can ask the electorate to vote for it in order that it can reduce unemployment from 3 million to 1·5 million. That damages the whole fabric of democracy. It spins further promises to the electorate which anyone who thinks about them will know cannot be kept. We cannot buck the international trend. With the rising tide of unemployment across the Western hemisphere, through Australia, New Zealand, Canada and America, we cannot expect simple solutions to Britain's problems.
    The Government's considerable success to date in reducing the level of inflation is laudable. The Government's cuts in taxation and attempts—which have not gone far enough—to simplify taxation are equally laudable. One must support the Government's start-up scheme and other incentives for small businesses, the youth opportunities scheme and other training programmes.
    However, there is little point in starting up new businesses if the climate is entirely hostile to them. High interest rates have been damaging to new businesses. It is no good encouraging entrepreneurs and potential entrepreneurs to start businesses or extend existing businesses by the purchase of new plant and machinery—which, incidentally, usually leads to further unemployment, not less—if exchange rates fluctuate from $2·40 to $1·80 within a year. It is impossible to run a manufacturing business against such a backcloth. Many things can be done to smooth out such fluctuating rates. I shall not burden the House with the details now, but action can and should be taken. It is bitterly unfair to encourage people to start businesses and expect them to succeed against such a backcloth.
    What can the banks do? Banks play a vital role. They do an excellent job and it is all too easy for hon. Members to criticise them. They are an easy target to snipe at. Last year the Government saw fit to impose a retrospective ad hoc tax on banks. That was wrong in principle. Having set a precedent, others less friendly in the House will seek any convenient gravyboat in which to stick their snout for whatever purpose they have in mind. Nevertheless, I can understand the Government's point of view. Banks were not popular and they still are not. I received no letters from my 115,000 constituents in Oxfordshire complaining about the Government's action. Therefore, politically speaking, the Government's case was impeccable. Colleagues in the House who have received rude and curt letters from their bank managers thought that it served them right.
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    The banks could take pre-emptive action to ensure that that does not happen again. The banks should not just hand out fivers to all and sundry but should do more to help small businesses start and to explain to us what they are doing to alleviate the problems of unemployment. I am sure that the banks are doing a great deal, but what they are doing is not trickling through. Why did the Government have to start the Government guarantee scheme with a two-point premium over the already substantial interest rates? Why could not the banks have done that themselves? It would probably have been good business. The banks said afterwards that they would have liked to do that, but why did they not do it?
    Why do not the banks tell us what they have done to prevent unemployment? How many firms have they helped to start? How many firms have they stopped from going bust? They should take pre-emptive action to tell us in the House and the public what they are doing which would do a tremendous amount to improve their image.
    It is no good the banks saying to me that their over-riding priority is to their shareholders. I know that. The banks do a first-class job for their shareholders—good luck to them. We are told that last year an ad hoc one-off tax cost the banks £½ billion. That meant that for the whole of one quarter of last year they might just as well have lain in their beds, for all the profits they made to distribute to their shareholders. A little more entrepreneurial flair and a little more attempt to communicate what a valuable service they provide for the community would pay them handsomely and make the Government's job of putting another tax on them much harder.
    It is no good joint stock bank general managers lobbying us when it is too late. The time for them to start is now, by showing society and the House not only that they have a well developed social conscience but, more importantly, that they have helped society in a time of a national crisis of unemployment which is good PR.
    Recently I started a campaign for Enterprise Abingdon and Enterprise Didcot. I should like to introduce a commercial into my speech, following the example set by the hon. Member for Liverpool, Edge Hill (Mr. Alton) whose speech was about Liverpool's problems. I recognise that the problems there are serious.
    The Enterprise Abingdon, Enterprise Didcot and Enterprise Faringdon campaigns are attempts by the community and the chamber of commerce in those areas to band together with the National Westminster Bank and Barclays Bank in helping small firms start up. They are doing that in conjunction with local firms of accountants and solicitors to try to help people who have a good idea, are scared of banks, do not understand how partnerships work and do not know whether to incorporate. The community is gathered together to help those people with good ideas start their own little business. I commend the banks for accepting that initiative. I hope that that positive contribution is extended. I recommend it to colleagues in all parts of the House, who should take the lead in their areas.
    8.57 pm
    Mr. Ian Wrigglesworth: I congratulate the Liberal Party on the motion. I warmly commend it to the House.
    The hon. Member for Abingdon (Mr. Benyon) has made some interesting remarks on the role that the banks might play. I support the general thrust of his argument.

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    He talked about the people who criticise the Government for the present level of unemployment. He should not misunderstand those people's remarks. They are criticising the Government not for deliberately creating unemployment, although some people do that, but for being misguided in following policies and priorities that give rise to the unemployment levels today. I am pleased that in the last few speeches some of the sense of despair and anxiety among the unemployed in the communities in which they live has been brought into the debate. The hon. Member for Liverpool, Edge Hill (Mr. Alton) mentioned that. There have been riots and difficulties in Liverpool, so he was well qualified, unfortunately, to do that.
    The Minister made a depressing speech. It was a recitation of the party political broadcast material that one has heard so often from Ministers since the Government came to office. At this point in the Government's term of office, when the level of unemployment is not only unacceptably high but looks as though it will remain at that level for a long time, the Minister's speech was almost an Alice-in-Wonderland performance. It was deeply depressing to those people who are suffering the ravages that unemployment brings to their lives.
    I shall remind the House what unemployment means to so many people. There are areas of Teesside where the level of unemployment is 30 or 40 per cent. There are wards in Middlesbrough where one third of the working population do not have a job. That means strains in the family, tension between the man and his wife, children asking for toys at Christmas and on birthdays which their parents cannot afford. It means misery and not being able to pay the gas or electricity bill. Deep anxiety arises from the fear of not being able to do so, of not being able to pay the rent or of possible eviction. I am sure that many hon. Members come across those problems in their surgeries. Thousands of human problems arise out of the misery of unemployment. I sensed in the Minister's speech, and others, that that sense of despair and misery is not coming through in the way that it should.
    The Minister's speech would have been a little more acceptable if there were any signs of a real recovery in the economy. The whole thesis of his speech was that we had to make great sacrifices to achieve a new understanding, a new atmosphere and a new environment in the nation and industry. One might be able to accept that argument intellectually if it were showing any signs of producing the desired results. But what is the point of achieving low inflation if that does not bring with it more growth, reduced unemployment or greater wealth in the economy?
    We have witnessed unemployment levels unprecedented in post-war years. We have witnessed a greater depression than in any other OECD country, in both depth and length. There has been a 20 per cent. drop in manufacturing production and a drop of 7 per cent. in GDP since the Government came to office. What a price to pay for the dogma that the Government pursue. If there were any sign that that will give rise to substantial recovery—we need it even if we are to start nibbling at the 3 million unemployed—the Government might be proud of their record in the past three years. As matters stand, however, they should be ashamed. They should be searching for new policies and a new approach that will stop the misery and the poor record on everything other than the one or two indicators by which the Government set great store.
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    I hope that the Government will stop looking at merely the public sector borrowing requirement, the money supply and the level of inflation and examine the longer-term objectives that they are trying to achieve. There is a consensus on the matter throughout the country, other than within the Conservative Party. The CBI, the Labour Party, the Liberal Party, the Social Democrats, everyone, understands that there can be no progress on the fundamental issues of unemployment, production and wealth creation unless there is some reflation of the economy.
    In a sense, sadly, it has taken President Galtieri to do what the combined resources of the CBI and all the other bodies which I have just mentioned have not been able to do. By destroying some of our ships and other equipment of war, he has brought about, as we learned earlier this week, some of the reflation and increased production that will come into the economy. That is a sad way of getting more jobs on Tyneside and in other parts of the country where those armaments are made.
    If the Government are to do anything about the real problems affecting the people of this country, they must reflate the economy. They cannot do that by pouring money into the economy, as suggested by some, without restraint. That would give rise to increased inflation, and then the brakes would have to go on. It would almost certainly give rise to increased imports, a balance of payments problem and all the problems that we have had in the past. We believe that the only way to overcome that is steady reflation. Our party outlined that in an economic policy statement published only two or three, weeks ago. We need steady reflation of the economy that does not result in bottlenecks and increased inflation, and it should be accompanied by an incomes policy.
    We intend to go into the next election with that commitment. No party since 1959 has had such a commitment in its manifesto, but it is one which every Government since then have had to introduce before a general election. Surely the lesson which all those Governments should have learned is that if the economy is to achieve increased wealth and greater employment, there must be reflation accompanied by an incomes policy.
    I have dealt with the long-term strategy. The motion deals predominantly with the short-term measures which must be taken. Steady reflation cannot happen all at once. We cannot take 3 million people off the unemployment register overnight. I hope that the Government will consider some of the proposals in the motion. I do not agree with the proposal, popular among some Conservative Back Benchers, for what appears from the figures given to be an enormous home and civil defence programme, or compulsory community service for young people. If £1½ billion of public money is to be spent, I can think of many better things on which it should be spent—not least, education and training schemes or reflation through construction programmes. That would help young people and many others.
    The proposals contained in the motion include
    "expansion of personal services for the elderly, the sick and the educationally deprived … and incentives for job-sharing".
    It also includes conservation works. Those proposals will benefit not only the unemployed but the whole community. As the hon. Member for Edge Hill said, a programme of reconstruction, modernisation and insulation of houses would benefit the economy through energy conservation and the growth of employment in the

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    construction industry. Most of all, however, it would provide improved housing conditions for the many thousands of people, especially those in council houses, who come to our surgeries week in and week out, desperately wanting the dampness and other problems in their houses eradicated. Today, people are living in council houses that are a scandal. It is certainly so in my constituency. Those people desperately need Government funds to ensure that they live in conditions appropriate to this part of the twentieth century.
    There are many spin-offs from short-term projects such as those suggested in the motion. I hope that the Government will take them seriously and consider introducing them as early as possible.
    If we are to increase the number of jobs, as we must if we are to reduce the awful figure of 3 million, we must also have an industrial and industrial relations policy to improve our competitiveness and increase productivity.
    It is all very well for the Minister to tell the House of the wonderful things that the Government are doing in microchips, robots and all the other things on which they are lavishing money—although not as much as they would have us believe—but he should read some of the speeches made by his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) when he was Secretary of State for Industry. I remember that the right hon. Member circulated to his civil servants a message that it was not the Government's job to intervene in or assist industry and that it was entirely for the markets and the private sector to obtain the growth, jobs, modernisation and other wonderful results of the Government's philosophy being put into effect. We had two years of that under the former Secretary of State for Industry.
    It is remarkable to note, from the speeches made since the present Secretary of State for Industry took office, the major shift in policy direction. It is as great as the shift that took place when the right hon. Member for Bristol, South-East (Mr. Benn) was removed from the Department of Industry.
    Thus, industry has to face a change of direction not only when there is a change of Government, but also, and almost as radically, within the Government. The uncertainty that is created within Government policies as well as between different Governments is the enemy of investment and job creation. The Government should seek a partnership with industry in which there is open discussion and decisions on priorities. There must be selective assistance from the Government within sectors and between sectors to ensure that such assistance is properly directed and not wasted on the blunderbuss approach we have sometimes had.
    A partnership, rather than Government telling industry what to do or closing the door and leaving industry to get on with no assistance at all, might achieve the results that that policy has created in Japan, West Germany, and other countries in the Western world. They have achieved a growth that, as was pointed out by the hon. Member for Chester-le-Street (Mr. Radice), has led to double the standard of living that we have in this country. The natural demand arising from that policy is to get away from this doctrinaire ding-dong battle in which industry is kicked around like a football between the two old major parties.
    That is one of the major changes that must be brought about at the next election. The Liberal Party and the SDP
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    will go forward on a policy of reconciling the country into a partnership and not splitting it on a doctrinaire approach. That is what is needed from an industrial policy. Such a policy will give confidence to industry. There will be certainty and investment, and that in turn will give rise to increased productivity and the wealth that will help to reduce unemployment.
    The country is crying out for that approach. That is the approach the country needs. In making a swerve—not a U-turn—the Department of Industry has started going in the right direction. I hope that it will seriously consider the proposals contained in the motion so that we can reduce unemployment before the next general election. Those of us who come from regions of high unemployment are appalled to see the ignorance in some sectors about the way in which industry has been ravaged.
    The change in Government policy is striking. After reducing the assistance available to many regions, the Government have now revised that approach and are going back to giving assistance to some areas from which it had been withdrawn. I welcome the extension of special development areas, especially in my constituency and that of my right hon. Friend the Member for Stockton (Mr. Rodgers). It is, however, a pity that the changes took place under the previous Secretary of State.
    I hope the Minister will say in his reply what is to happen about the Nissan car plant project. Over recent days, there has been enormous speculation about whether the plant will be built at all in the United Kingdom. That is depressing news for people on Humberside, Teeside and Tyneside and in Wales and other parts of the country who have worked long and hard to make the case for the plant coming to their areas. I strongly hope, wearing my constituency hat, that the plant will come to my area. An enormous amount of money, time and effort has been spent on preparing the case for this plant. The Minister has a duty to all those parts of the country, especially those in Wales and the North, to state whether the plant is coming. The situation is not at all clear.
    I hope that the Minister will also say something about the extension of training schemes. As my right hon. Friend the Member for Crosby (Mrs. Williams) says, we believe that education and training schemes need to be extended and that there should be considerable changes in the whole apprenticeship system. The Minister will, I hope, make clear what the Government are doing.
    The debate has been a useful reminder of the need for short-term measures to bring down unemployment. It will, I hope, stimulate some activity within the Government and show that those on the Liberal and SDP Benches have proposals for the longer term as well as the shorter term that will succeed in getting unemployment down from its unacceptable level of 3 million.
    9.17 pm
    Mr. Harry Greenway: I shall not take the same road as that followed by the hon. Member for Thornaby (Mr. Wrigglesworth). The hon. Gentleman recommended a return to reflation, which means inflation, tied in, if necessary, with a statutory incomes policy. We shall watch the response of the nation. The Pavlovian response and cries from his right hon. and hon. Friends commit them starkly to the hon. Gentleman's ideas.
    I shall be brief. It is right to try to give other hon. Members the chance to speak. No one has taken account in this debate of a fundamental revolution in which

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    teaching machines have taken over many of the functions of teachers, self-service garages have taken the place of garages with pump attendants, containerisation has replaced docks, and supermarkets and a cash till have replaced jobs formerly done by many people in small and large shops. As a nation and as individuals, we have gone along with this revolution. No one would go out of his way to use a petrol station where a job was provided for a pump attendant when a self-service garage is available. It is the same when one considers supermarkets as opposed to ordinary shops. Our approach to the motion needs to take account of the fundamental revolution that has taken place in society and social practice.
    There are more jobs in manufacturing industry in the London borough of Ealing than in any other London borough. I am in close touch with a large number of firms in the way that my hon. and learned Friend the Member for Hemel Hempstead (Mr. Lyell) is in his constituency. One of the things that hits me between the eyes harder than anything else is the tremendous effect of high rates on industry. That factor has not been mentioned in the debate, but, for example, the Hoover factory, which has just lost 1,200 jobs, had to face a supplementary rate demand from the GLC of £200,000. That was the straw that broke the camel's back.
    I have been to shops which had supplementary rate demands from the GLC last October of £1,000 or £1,800. That sort of money has cost jobs in shops and factories. We have to examine rates and the effect that they have. In the GLC the doubled rate in under 12 months of the Labour GLC has had a serious and detrimental effect on jobs. I should have liked to hear hon. Members from opposition parties referring to that.
    The difference in the level of rates between Conservative and Labour-controlled authorities is marked. For example, when we compare the rates of Brent borough with those of Ealing, the latter is only half that of the former. Jobs are coining from Brent to Ealing for that reason. They have to for the companies to survive.
    Two or three people setting up businesses in my constituency have raised a problem with me. They have pointed out that on the Isle of Dogs there is a new regional development zone, where those setting up businesses do not pay rates for 10 years. Other business men would like that sort of concession for their rates. The Government should consider that seriously because what is sauce for the goose should be sauce for the gander. People who do identical jobs in these zones have concessions that should also go to those setting up businesses outside the zones. There is no sense in transferring jobs from Ealing to the Isle of Dogs if they are the same jobs. One needs to create new and additional jobs.
    It has recently been found that every time rates go up by £5,000 a job is lost, and my experience bears that out. In London, the GLC has doubled rates and is taking £25 million of that increase to fund a job creation scheme. It has been estimated, and never been denied, that each job that the GLC produces under the scheme—which is run by a director being paid £40,000 a year, double his predecessor—will cost £10,000.
    There was an even wilder statistic in the late 1960s when the Labour Government were trying job creation programmes and new jobs were said to cost £78,000. The GLC may have improved on that, but at £10,000 a new
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    job, crudely speaking, if an old job is lost each time the rates go up by £5,000, two jobs are going for the price of one.
    There is a great need for a bomb to be put under the antidumping unit of the EEC. It affects businesses in many constituencies, and certainly in mine. Hoover and other companies that I know have made representations to the unit about goods coming into the country at political prices from Eastern Europe. For example, Hoover has been making representations for two and a half years without anything being done. Thousands of jobs have been lost. That department moves incredibly slowly, and to our disadvantage. Something must be done about it.
    London also has to contend with the GLC's Luddite attitude. The Hoover factory is such a good example that I shall mention it again. I have worked hard with the directors to get them to produce a scheme for new jobs. They obtained planning permission from the London borough of Ealing, which is Conservative-controlled. Some of the jobs are more technicaly oriented than those that have been lost. However, the Labour Party on the GLC opposed that planning permission for the simple reason that the new jobs are not exactly the same as those that have been lost. That is nonsense. The GLC should recognise that the new jobs must be different, because otherwise the old jobs would not have been lost. The answer is to retrain people so that they can fill the new jobs. I should like Labour Members to put strong pressure on the GLC and other Labour-controlled bodies so that there is a new approach to such matters.
    There is much more to say, but some hon. Members have spoken at length and I shall be brief so that others can speak. In theory, I warmly welcome job sharing. However, employers will have to pay twice the stamp and the insurance and they will be neither prepared nor able to do so. I hope that the Minister will consider that point when he replies to the debate. The hon. Member for Truro (Mr. Penhaligon) suggests that extra care should be given to the educationally deprived, but does not he realise that there is already a shortage of experts in that area and that it would be difficult to find qualified people? The hon. Gentleman is being glib and he does not convince anyone. The scheme should be thought out in much greater depth.
    9.26 pm
    Mr. John Golding: I very much welcome the new youth training scheme, although many people are pessimistic about whether employers will be able to provide the places. However, I wish to draw the attention of the House to the plight of the unemployed.
    The new training scheme is being introduced at the expense of the unemployed. It is being concentrated on 16 to 17-year-old school leavers. The existing provision for 17, 18 and 19-year-olds is being phased out. The opportunities that now exist for the young unemployed are being removed to pay for the new training scheme. That is most undesirable. What provision will the Government make—I hope that the Minister's parliamentary private secretary will allow him to listen—for those 17-year-olds who are unemployed but who are not school leavers? What provision is being made for the 18 to 19-year-olds? What is the position of this year's entrants to the youth opportunities programme who are on a six-months scheme? Will they be given further opportunities next year, or will they become victims of the transitional arrangements?

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    I believe that very little provision will be made. We are told that 18-year-olds have the community enterprise programme. However, as the Select Committee and many others have pointed out, it is wholly inadequate and cannot provide for our 1 million long-term unemployed. Indeed, 18-year-olds find it almost impossible to compete with adults for sponsorship under the community enterprise programme. As a result of the lack of provision for the 17 to 20-year-old unemployed, long-term unemployment among the young is growing. That will have disastrous consequences. What are they to live on? What are the unemployed 20, 21 and 22-year-olds to marry on? The effect of the supplementary benefit rules is that if a young couple marry and the girl is in work the long-term unemployed young man will receive no benefit. This is leading to "Love on the Dole". We must examine the financial plight of young people who have had no time to acquire savings, no time to accumulate financial reserves, who are being put into the direst of poverty through no fault of their own because they cannot get work.
    I ask the Government to take another look at the special measures and not to replace them when introducing the youth scheme. I hope that they will re-examine the young workers' scheme and introduce subsidies and other measures that will mean that all youngsters, irrespective of whether they are school leavers, will have the chance to have work, income and the opportunity to regain their self-respect.
    9.31 pm
    Mr. Richard Wainwright: All hon. Members, and especially Back Benchers, are rightly jealous of the use of our scarce parliamentary time. It was therefore a great misfortune for both sides of the House that the Treasury Minister, in spite of having heard the motion proposed eloquently by my hon. Friend the Member for Truro (Mr. Penhaligon), found that he had been given the wrong speech. To make matters worse, he addressed it to the wrong people in the wrong part of the Chamber. For most of the time he appeared to be addressing the Labour segment of the Opposition, which does not have the time of the House this evening. On other occasions he appeared to be addressing President Mitterrand.
    There can be no excuse. The motion appears on the Order Paper. We are not discussing some words that were thought up overnight on the back of an envelope like the taxes of the previous Labour Government. The motion is a combination of a document entitled "A Chance to Work", which the Liberal Party published last February, and which went into substantial detail, a splendid document from the SDP's economic policy group called "Towards Full Employment", and the report of the Select Committee of another place, which appeared only last month, on unemployment. I must register profound dismay at the way in which the Minister went on about the Government's macro-economic policies, as though we had not sat through four Budget speeches under this Government already.
    Another sad commentary on the debate is that without exception Conservative Members who have contributed to it have been either from Greater London or the Home Counties, whereas the speeches of those on the Opposition parties' side of the Chamber who wish an attempt to be
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    made to come to grips with this intractable and appalling problem have been made by those who represent various extremities of the provinces where unemployment is a long-standing problem.
    A smear which came into the Minister's speech which I repudiate at once was his suggestion that our proposals are short term. That is wrong. Every proposal that we have mentioned should and could last for many years. We have no time for quick palliatives to deceive the people during the period before the next general election. Ours are long-term schemes that are built to last. Furthermore, they are all low-cost schemes with modest import content and they are specific. I hope that the Minister of State, who will have a heavy burden when he replies to the debate, will recognise that we have been addressing specific areas of the problem and that we want no more vague lectures on the macro-economic problems of unemployment.
    I took great exception when the Minister of State asked the rhetorical question "Whose jobs shall we sell to create the jobs that the Liberals propose?" How many jobs have the Government sold to pay for the ascertained cost of unemployment, which is now about £13 billion a year? The Government should think of the hundreds of thousands of useful wealth-creating jobs which could be endowed if the Government were not saddling themselves with the prodigal cost of vast unemployment, which the Select Committee in another place computes at at least £13 billion a year.
    The Government are victims of four fallacies. The first is that economic recovery will be spontaneous and that when all the economic factors have come into the right conjuncture, the economy will take off like a balloon. That fallacy has already been demonstrated by the Treasury Select Committee four times in this Parliament, and no serious thinker any longer gives credence to it.
    Secondly, the Government believe that the inevitable social disorder that long-term unemployment is generating can be dealt with by well-paid police forces and Armed Forces. Like my hon. Friend the Member for Liverpool, Edge Hill (Mr. Alton) and others, I tell the Minister that that is wrong.
    The third handicap under which the Government labour is their obstinate refusal honestly to cost the various remedies that members from all parties put forward. We owe the Select Committee in another place a great debt because it strongly advocates that the Government should seriously cost the various proposals for long-term employment and that if they did so they would see that the expense is nothing like what has been alleged by Ministers.
    I quote from page 159 of the Select Committee report:
    "It is essential that the Treasury should cost remedies in the full consciousness of what it and the country lose when those in work become unemployed. Only when this is done, does the true cost of remedies become apparent. Many are cheaper than they superficially seem."
    The Government continue to pretend that, whereas all the proposals for dealing with unemployment are expensive, unemployment is not already putting an appalling financial burden on the country. I hope the Minister of State will come clean on that subject. The hon. and learned Member for Hemel Hempstead (Mr. Lyell) gave some interesting details on the Youth Call proposal. He will not expect a Liberal to be enamoured of the various devices that would be necessary to make such a scheme almost compulsory. I remind him that the Select Committee said that this sort

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    of remedy was wasteful and unrealistic because it dealt with the young unemployed as if they were a homogeneous group who would be happy to be herded into a scheme, the objectives of which might to repellent to many of them.
    My hon. Friend the Member for Thornaby (Mr. Wrigglesworth) spoke from his deep, grim experience of persistent and chronic high unemployment in the North-East. The commitment that he gave on behalf of the alliance to an incomes policy to underpin the expansion of the economy is fully endorsed by the Liberal Party.
    One of the most appalling prospects of the legacy that the Government will leave to their successors is not only that they have obstinately refused to discuss plans for creating useful jobs, but that they are not even planning for recovery. There is now ample evidence that the Government are short of up-to-date plans for programmes such as roads, waterways, coastal erosion and coping with massive flood defence problems. It is the duty of any Government—even if they feel that they cannot put such plans into operation immediately—to keep plans up to date, so that when the right moment comes they can be put into operation. I hope the Minister of State will tell us the position on planning in Government Departments on these major public works. I fear that it will be an unhappy tale.
    One aspect of our job creation plans has not figured in the debate until now. We believe—the Select Committee supports us—that there is room not only for many overdue public works but an urgent need for relatively unskilled manpower in many aspects of our health and welfare services. The Select Committee reminds us that the National Health Service is desperately short of people to care for the mentally sick, the elderly, the disabled and others who need special provision. It points to the need for nursing auxiliaries, ward clerks, porters, cleaners and maintenance people. It also makes the telling point that health care becomes less satisfactory the further one moves from London and the South-East. The incidence of high unemployment coincides with the greatest need in the Health Service.
    The same is true, certainly in my experience in West Yorkshire and Greater Manchester, of the welfare services for which local government is responsible. They are desperately short of relatively unskilled people who could be of immense value in helping the elderly and the disabled. That is why we referred to them specifically in our motion.
    The main handicap with job sharing—employers who have helpfully tried to promote this scheme will agree—is the difficulty with occupational pensions. People who would be willing to share their jobs and their ordinary current remuneration feel that they must draw the line when they realise that they are damaging their pension prospects. That makes the matter a job for the Government. It is the Government's duty to cut through the pension knot and to bring forward a scheme with a pool of pension money so that those who share jobs and who show some humanity to their fellow workers are not frustrated simply by the occupational pension difficulty. I hope that the Minister of State will refer to that in his reply.
    "Those hardest hit by economic adjustment",
    to quote from the Government's amendment, are well over 1,500,000. The Government have a duty to produce schemes for them. If they do not like our schemes they must think of something better. But silence and obstinacy are no answer to this massive human problem. Our motion
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    does not try to crab the various training and youth employment schemes that the Government have produced, so there is no need for the Minister of State to be defensive when he replies. We wish to hear whether the Govermnent are prepared to respond to a specific call for many more projects to restore our physical assets, to look after the elderly and deprived, and at the same time, by happy combination, to give useful, satisfying and productive employment to people who will otherwise become victims of complete despair.
    9.42 pm
    The Minister of State, Department of Employment (Mr. Michael Alison): I congratulate the Liberal Party on the moderate and constructive character of the motion before the House. It contrasts favourably with what one can only call the blunderbuss approach of the Opposition motion that we debated a week or two ago. Their approach contained no positive suggestions or ideas as to what we should do, unlike the Liberal Party motion. It was entirely negative and, other than a call for general economic reflation, it had nothing solid to say.
    It is worth reading out a key phrase in the Select Committee report since the hon. Member for Truro (Mr. Penhaligon), who opened the debate, made it plain that he would base many of his comments on the report. The hon. Member for Colne Valley (Mr. Wainwright) also referred to it. Paragraph 14.13 of the Select Committee report under the heading "Remedies" states:
    "At the risk of stating the obvious we stress our conviction that no remedies for unemployment will be effective for long if they lead to a renewed phase of sharply rising inflation. We do not believe we can simply spend our way out of trouble. General reflation at the present is a primrose way leading to destruction."
    The primrose way leading to destruction—the programme for general reflation—was proposed by the Opposition when we last debated this matter. Perversely, of course, at least three or four Labour members of the Select Committee repudiated the primrose way to general reflation. I assume that the Liberal Party repudiates it because its spokesman was the Chairman of the Select Committee.
    I am a little worried about the position of the SDP. If the report I received from my hon. Friend the Minister of State, Treasury was correct, the hon. Member for Thornaby (Mr. Wrigglesworth) advocated a steady reflation and yet the SDP member on the Select Committee in another place repudiated that doctrine. There is much to be said for unity in diversity or diversity in unity.
    "Let a hundred flowers bloom,"
    As long as every idea is put forward we can always debate it. The balance of opinion appears to be against the concept of general reflation.
    The hon. Member for Colne Valley asked me not to launch into a general macroeconomic review. However, the macroeconomic background must be the one against which we consider special measures. There is always an overflow of the cost of special measures into the broader macroeconomic framework, which has to be taken into account. I believe that my hon. Friend the Minister of State, Treasury was entirely right to introduce the debate with the proper macroceconomic background. The hon. Member for Colne Valley witl be pleased to hear that shall not repeat it, except to remind him and the House of one key set of statistics that are absolutely critical in everything with which we are grappling. It is a set of statistics that I used recently and my hon. Friend repeated

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    this week. It was the appalling league table results in unit labour costs in manufacturing industry in the period 1975–1980. It needs to be remembered and written on our minds and hearts. In the quinquennium 1975–1980 United Kingdom unit labour costs in manufacturing industry doubled. In Canada they went up by 50 per cent., in the United States of America they increased by one-third, in West Germany by one-sixth and in Japan they did not increase at all. That is the macro explanation of why we have three million people unemployed.
    Mr. Tom Ellis: Would not the Minister agree that the single biggest determinant in keeping low unit labour costs is that planned capacity should be fully utilised and that one can only achieve that by some kind of reflation?
    Mr. Alison: Yes, it would be a good message to get across to the National Union of Railwaymen in respect of the trains standing in the sidings on the St. Pancras line. They cannot be used and that capital is under-utilised. It was the effect of the unions on unit labour costs in that period that laid the foundation of the present high level of unemployment. There is no other macroeconomic factor with which we need bother.
    I come to the suggested specific special measures to reduce unemployment, to which the motion refers and about which many right hon. and hon. Gentlemen have spoken. Many of the suggestions put forward were mirrored in the Select Committee's report. I make no complaint about that. It is a stimulating and constructive document. I welcome the emphasis on special measures as a proper corollary to the strategy of reducing inflation and improving competitiveness, which is the critical background.
    The Government have committed massive resources to special measures. In the year before we came to office £333 million was spent on the measures. This year it will be more than £1½ billion and the next year nearer £2 billion. The astonishing thing is the relative increase in what we are spending on a whole range of special measures even compared with the relatively large rise in unemployment. Had the Labour Government spent pro rata on special measures to help the unemployed as we are, we might have inherited fewer unemployed.
    Mr. Radice: Perhaps the Minister has not noticed that unemployment is two and a half times more now than it was then.
    Mr. Alison: It has roughly doubled and the amount spent on special measures has increased tenfold.
    Moreover, we have shown our commitment to the principle of special measures by introducing new initiatives—new special employment measures such as the community enterprise programme launched in April 1981, the young workers' scheme launched this year and the enterprise allowance launched in February on a test basis. Further ideas and initiatives are in the process of development, particularly the new youth training scheme, the voluntary service scheme and the scheme for the long-term unemployed announced by my right hon. and learned Friend the Chancellor of the Exchequer in the Budget.
    The rapid extension of the range of assistance has been accompanied by the maintenance or extension of existing
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    measures, such as the job release scheme. But we are not irrevocably committed to a specific and unvarying programme of measures. We review all the measures each year and compare them with other possible measures. We shall note most carefully the ideas canvassed tonight.
    Although we are not irrevocably hooked on a specific and unchangeable programme, we try to apply certain criteria. For example, we consider the programme's main objective—whether it will help the right people in the way that they most need it. We consider the side effects—whether the scheme is consistent with our strategy of keeping down inflation and helping businesses to prosper. One significant side effect that we must take account of is the one mentioned by my hon. Friend the Member for Ealing, North (Mr. Greenway) of possible increased rate charges caused by local authority-based schemes. That could be disastrous for local employment and local businesses.
    We work out the cost of the scheme not only in gross terms. We take into account the offset in savings on allowances and so on for the benefits that have to be paid in the job release scheme, for example. We have to consider carefully the net effect.
    Mr. Richard Wainwright: Broadly speaking, does the Minister accept the conclusion of the Select Committee in another place that the annual average cost of an unemployed person is about £5,200?
    Mr. Alison: I do not accept that figure. Half of it is based on the notional offset of losses in tax that may accrue to the Government. It is a highly speculative and uncertain field. For example, unemployment caused by large wage rises can have a higher revenue yield for the Government. It is better in revenue terms to have high unemployment caused by huge wage increases. The way that the tax system works one can get an increment of tax yield. We cannot accept the offsetting tax factor at its face value. It is more complicated than that. We would take a lower figure. But I do not wish to be drawn into that argument in detail tonight.
    We also consider the effect on unemployment as one of the principal features of a scheme. Our schemes stand up well by those criteria, especially compared with others. For example, the new youth training scheme has clear objectives—to improve the prospect of employment for young people by providing a year's foundation training for entrance to work. The youth task group report, which the Government have accepted, states that the new scheme is about providing a permanent bridge between school and work. That is why it is to include people in jobs, with the emphasis on the quality of training. Clearly, proper training is the central objective, and it is a rational and sensible objective.
    The scheme will be costly—perhaps over £1 billion a year, when it is in full operation. This expenditure has to be financed from somewhere, but we firmly believe that the provision of proper basic training will pay dividends for us. It has done so for our international competitors, and we think that it will do the same for us in the end. So that expenditure is worth making.
    The scheme will reduce unemployment—another of the criteria that we consider. At any one time, perhaps ¼ million young people, who otherwise would be unemployed, will be engaged on this far more constructive alternative. Thus, by the criteria that I outlined, this new training scheme is clearly worth backing.

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    I briefly turn to the criticism made by the hon. Member for Newcastle-under-Lyme (Mr. Golding) about the relatively sharp emphasis on the 16 and 17-year-olds at the expense of the 18-year-olds. The emphasis is on the 16 and 17-year-olds. For the 18-year-olds we should look to other schemes, for example, the CEP, the new Budget scheme, perhaps job release, which should help the 18-year-olds, and of course the temporary short-time working compensation scheme. However, it is quite true that the primary emphasis in the youth training scheme is on the under-18s.
    Another example is the scheme for the long-term unemployed. Many hon. Gentlemen who have spoken in the debate emphasised the demoralising effect of long-term unemployment. We entirely agree that it is deeply demoralising and extremely undesirable. For the past year or so, our emphasis has rightly been on providing opportunities for the young. However, it is also right to look again at our provision for the long-term unemployed. The longest-running scheme in this connection is the community enterprise programme. That is now well-established and is working effectively. Its objective is to provide useful work experience for the long-term unemployed and to undertake work of community benefit—exactly the kind of work that the Liberal motion, with its emphasis on local construction schemes, conservation, environmental improvement and so on, would advocate. The scheme is not cheap. It will cost over £150 million gross in this financial year, and it has been expanded this year. The scheme helps 30,000 people at any one time, which is an increase of 5,000 compared with last year.
    However, the scale of the problem suggests that more is needed. Simply to expand the community enterprise programme further, as some hon. Gentlemen have suggested, including the hon. Member for Chester-le-Street (Mr. Radice), with a further increased tranche over and above the increase this year, would be very costly. We could reach the point at which the effect of financing the measure would have serious side-effects on other of our governing criteria, in the sense that real jobs could be put at risk because of the extra taxation or the higher interest rates.
    That is why we turned to the Chancellor's Budget scheme, which, with net additional expenditure of £150 million, is likely to provide at least 100,000 places for people of a variety of ages, in exactly the area which the Liberal motion suggests, but at somewhat lower cost.
    Many hon. Members commented on the waste involved in supporting unemployment while important work needs to be done. The Chancellor's new initiative addresses that problem by inviting unemployed people to work on the basis that each week they will receive an amount equivalent to their benefit payments plus a little extra for expenses.
    I have tried in a very short time to refer to a number of the points that were raised. I want to emphasise that the House of Lords Select Committee report is an interesting and constructive document. It produces a range of proposals. It must involve a good deal of money. Our initial costing is at least £5 billion extra, if we were to accept all its proposals. However, we do not rule out any of the ideas in the programme. We shall study them carefully. We have not made our formal response yet to the Select Committee report, but in due course we shall do so. We shall weigh up and attempt to evaluate the
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    suggestions made in the motion and in the speeches that supported it. We are bound to remind the House and the Liberal Party that, although public expenditure this year has gone up, it went up by £5 billion on the total prescribed in the last public expenditure White Paper. Another £5 billion on top of that for the whole range of the Select Committee's proposals would be difficult to accommodate. I am not sure that we can go anywhere near down the whole line but the matter has caught our eye and we shall do our best to respond constructively. For that reason I suggest that the Liberal Party should accept our amendment to their motion.
    Question put, That the original words stand part of the Question:—
    The House divided: Ayes 35, Noes 154.

    Division No. 255]

    [10 pm

    AYES

    Alton, David

    Ogden, Eric

    Brocklebank-Fowler, C.

    Owen, Rt Hon Dr David

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

    Penhaligon, David

    Cartwright, John

    Rodgers, Rt Hon William

    Crawshaw, Richard

    Roper, John

    Cunningham, G. (Islington S)

    Ross, Stephen (Isle of Wight)

    Ellis, Tom (Wrexham)

    Sandelson, Neville

    Faulds, Andrew

    Steel, Rt Hon David

    Ginsburg, David

    Stewart, Rt Hon D. (W Isles)

    Grant, John (Islington C)

    Thomas, Jeffrey (Abertillery)

    Horam, John

    Thomas, Mike (Newcastle E)

    Howells, Geraint

    Wainwright, R.(Colne V)

    Jenkins, Rt Hon Roy (Hillhead)

    Wellbeloved, James

    Williams, Rt Hon Mrs (Crosby)

    Mabon, Rt Hon Dr J. Dickson

    Maclennan, Robert

    Wilson, Gordon (Dundee E)

    McNally, Thomas

    Wrigglesworth, Ian

    Magee, Bryan

    Mitchell, R. C. (Soton Itchen)

    Tellers for the Ayes:

    NOES

    Aitken, Jonathan

    Costain, Sir Albert

    Alexander, Richard

    Cranborne, Viscount

    Alison, Rt Hon Michael

    Dorrell, Stephen

    Ancram, Michael

    Dover, Denshore

    Arnold, Tom

    Dunn, Robert (Dartford)

    Aspinwall, Jack

    Dykes, Hugh

    Atkins, Rt Hon H.(S'thorne)

    Eden, Rt Hon Sir John

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

    Elliott, Sir William

    Baker, Nicholas (N Dorset)

    Fairgrieve, Sir Russell

    Beaumont-Dark, Anthony

    Faith, Mrs Sheila

    Bennett, Sir Frederic (T'bay)

    Fisher, Sir Nigel

    Benyon, Thomas (A'don)

    Fletcher-Cooke, Sir Charles

    Berry, Hon Anthony

    Fookes, Miss Janet

    Bevan, David Gilroy

    Fowler, Rt Hon Norman

    Biggs-Davison, Sir John

    Gardner, Edward (S Fylde)

    Blackburn, John

    Garel-Jones, Tristan

    Bonsor, Sir Nicholas

    Goodhart, Sir Philip

    Boscawen, Hon Robert

    Goodlad, Alastair

    Bottomley, Peter (W'wich W)

    Gow, Ian

    Boyson, Dr Rhodes

    Greenway, Harry

    Braine, Sir Bernard

    Griffiths, Peter Portsm'th N)

    Bright, Graham

    Gummer, John Selwyn

    Brinton, Tim

    Hamilton, Michael (Salisbury)

    Brooke, Hon Peter

    Hampson, Dr Keith

    Brown, Michael (Brigg & Sc'n)

    Havers, Rt Hon Sir Michael

    Browne, John (Winchester)

    Hawkins, Sir Paul

    Bruce-Gardyne, John

    Hawksley, Warren

    Buck, Antony

    Hayhoe, Barney

    Butcher, John

    Heath, Rt Hon Edward

    Cadbury, Jocelyn

    Heddle, John

    Carlisle, Kenneth (Lincoln)

    Henderson, Barry

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

    Hill, James

    Chalker, Mrs. Lynda

    Howell, Ralph (N Norfolk)

    Chapman, Sydney

    Hunt, David (Wirral)

    Clark, Sir W. (Croydon S)

    Jessel, Toby

    Clarke, Kenneth (Rushcliffe)

    Jopling, Rt Hon Michael

    Cockeram, Eric

    Kaberry, Sir Donald

    Cope, John

    Kimball, Sir Marcus

    107

    Lang, Ian

    Osborn, John

    Latham, Michael

    Page, John (Harrow, West)

    Lawrence, Ivan

    Page, Richard (SW Herts)

    Lester, Jim (Beeston)

    Percival, Sir Ian

    Lloyd, Ian (Havant & W'loo)

    Price, Sir David (Eastleigh)

    Lloyd, Peter (Fareham)

    Proctor, K. Harvey

    Loveridge, John

    Renton, Tim

    Lyell, Nicholas

    Rhodes James, Robert

    McCrindle, Robert

    Ridsdale, Sir Julian

    Macfarlane, Neil

    Rippon, Rt Hon Geoffrey

    MacGregor, John

    Rost, Peter

    McNair-Wilson, M. (N'bury)

    Rumbold, Mrs A. C. R.

    Major, John

    Sainsbury, Hon Timothy

    Marlow, Antony

    Shaw, Giles (Pudsey)

    Mather, Carol

    Shaw, Sir Michael (Scarb')

    Maude, Rt Hon Sir Angus

    Shepherd, Colin (Hereford)

    Mawby, Ray

    Smith, Tim (Beaconsfield)

    Maxwell-Hyslop, Robin

    Speed, Keith

    Mayhew, Patrick

    Speller, Tony

    Mellor, David

    Spicer, Michael (S Worcs)

    Mills, Iain (Meriden)

    Stainton, Keith

    Mills, Sir Peter (West Devon)

    Stanbrook, Ivor

    Moate, Roger

    Stevens, Martin

    Monro, Sir Hector

    Stradling Thomas, J.

    Montgomery, Fergus

    Taylor, Teddy (S'end E)

    Morris, M. (N'hampton S)

    Tebbit, Rt Hon Norman

    Mudd, David

    Temple-Morris, Peter

    Murphy, Christopher

    Thatcher, Rt Hon Mrs M.

    Needham, Richard

    Thomas, Rt Hon Peter

    Nelson, Anthony

    Thorne, Neil (Ilford South)

    Neubert, Michael

    Townend, John (Bridlington)

    Newton, Tony

    Trippier, David

    Onslow, Cranley

    van Straubenzee, Sir W.

    108

    Viggers, Peter

    Wickenden, Keith

    Waddington, David

    Wilkinson, John

    Wakeham, John

    Winterton, Nicholas

    Waller, Gary

    Wolfson, Mark

    Ward, John

    Watson, John

    Tellers for the Noes:

    Wells, Bowen

    Mr. Donald Thompson and

    Wheeler, John

    Mr. Archie Hamilton.

    Question accordingly negatived.
    Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.
    Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
    Resolved,
    That this House, greatly concerned about the problems of unemployment, supports the Government's policies to improve the performance of the British economy, which offer the best prospect of a permanent improvement in employment opportunities, as well as the Government's substantial programme of special employment and training measures designed to help those hardest hit by economic adjustment.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Duchy of Cornwall Management Bill may be proceeded with, though opposed, until any hour.—[Mr. Lang.]

  Duchy of Cornwall Management Bill
  Order for Second Reading read.
  10.11 pm
  The Minister of State, Treasury (Mr. Barney Hayhoe): I beg to move, That the Bill be now read a Second time.
  This is a modest but not unimportant measure. Its main aim is to bring the existing statutory constitution of the Duchy into the twentieth century.
  Parliament has been concerned with the affairs of the Duchy for more than 600 years, as the Duchy was created by a charter having the authority of Parliament in 1337. The charter was granted by King Edward III to his son Prince Edward, the Black Prince. The purpose of the Duchy, as encapsulated in the charter, was to maintain the dignity of the heir to the throne. Further, it gave the heir an opportunity to learn the duties of kingship by exercising them in the rather more limited form of ownership of estates. The lands granted by the charter were declared to be inalienable. Although a Duke of Cornwall had full powers of management so long as he remained duke, when he ceased to be duke, either by accession to the throne or by death, they ceased.
  Minor alterations in the properties subject to the charter were made by Parliament during the Middle Ages. From the seventeenth century onwards, successive dukes were given limited powers to grant leases by Parliament. Apart from that, the Duchy remained broadly unchanged until after the accession of Queen Victoria.
  Following neglect—students of the period may recognise that harsher terms could be employed—during the eighteenth century, a major reform of the duchy affairs was clearly required. The first minor step towards this was the passing in 1838 of an Act that required accounts from the Duchy of Cornwall, as well as from the Duchy of Lancaster, to be produced to Parliament.
  Following the birth of Prince Albert Edward, who subsequently became King Edward VII, the opportunity was taken to carry out a reorganisation of the duchy. In 1844 Parliament passed an Act that was intended to give some administrative power to a council of the Duchy of Cornwall under the chairmanship of the Lord Warden of the Stannaries—at that time the Prince Consort, Prince Albert. The objects of this were to resolve a number of outstanding disputes with other land owners, to sell isolated parts of the duchy estates and to purchase fresh land to consolidate existing holdings. In addition, certain management powers relating to leases were granted.
  When Prince Albert Edward attained his majority, a further Act became necessary. That 1863 Act, slightly amended by the 1868 and 1893 Acts, still provides the basic administrative powers under which the duchy is governed. I am told that at that time the powers were seen as enlightened and wide for the mid-nineteenth century, but I have no doubt that they are far from suitable for modern conditions.
  In other, somewhat similar, circumstances, Parliament has thought it appropriate to confer modern powers of management on several classes of limited owners. For example, private landowners whose property is held in trust were given wider powers in the Settled Land Act 1925, and universities and colleges were given similar powers in legislation between 1925 and 1964.
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  The original management powers of the duchy are now without any doubt considerably more restricted than those agreed by Parliament as appropriate and reasonable for other limited owners. The still current nineteenth-century legislation concerning the duchy imposes no major restrictions on the duchy's general power to buy and sell freehold land, provided that a proper price is obtained or paid and that the moneys are used in the prescribed manner.
  The powers of the duchy to grant leases, however, are subject to a number of restrictions which appear to serve no useful purpose in modern conditions. Additionally, except in very limited circumstances, the duchy at present has no power to take a lease. This applies not only to leases of land of which the freehold is owned by others but also when the freehold is owned by the duchy. In such circumstances, although the duchy has power to accept the surrender of leases, it has no power to buy out a tenant. Understandably this continues to cause difficulties for both the duchy and its tenants in situations in which payment of a capital sum to the tenant would be in the interests of both parties.
  Clause 2 of the Bill is intended to overcome those difficulties. It gives power to take leases, including power to buy out duchy leases with capital money, and empowers the duchy to buy land jointly with other persons.
  I shall briefly describe the other main provisions of the Bill. Clause 1 deals with investments and adapts the application of the Trustee Investments Act 1961, which already applies to the duchy, so that when cash in hand deriving from sales in land is invested it need not be divided into two funds. As by far the greater proportion of duchy assets is and will continue to be held in land, there is no need to require half the investments to be held in gilt-edged securities or similar assets, provided that they are held in what are described as "wider-range" investments.
  Clause 3 provides limited power for the duchy to mortgage land as security for loans. This is intended to provide only for loans for the specific purposes mentioned in the Bill—broadly speaking, the purchase or improvement of land. It is intended to avoid the unnecessary sale of other properties simply in order to raise money for a desirable purpose. It is intended that any exercise of this power would need the consent of the Treasury. The requirement for Treasury consent carries forward similar provisions in the 1863 Act concerning the sale of land and property.
  The same Treasury control applies to clause 4, which deals with improvements and gives the Treasury power to relax the existing requirement that improvements such as houses, roads and fencing must eventually be paid for out of duchy revenue. As the improvements add to the capital value of the duchy estates, the existing provisions are unduly restrictive.
  Clause 5 deals with leasing powers and provides that a duchy lease may be granted for any length of time. It also removes technical restrictions on leases which do not give immediate possession to the lessee.
  Clause 6 deals with banking and allows duchy capital—money which at present can only be held in the Bank of England—to be kept in any bank registered and recognised under the Banking Act 1979.
  Clause 7 provides a new general power for the authorisation of transactions for the good management of the duchy, subject to specific Treasury approval. Similar

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  provisions are contained in other Acts conferring wider powers of management to cater, in particular, for eventualities that cannot be foreseen. This is intended partly to cover such matters as the grant of mortgages for duchy staff and tenants, the provision out of capital for the purchase of equipment, plant and machinery conducive to the good management of the duchy estates, and the financing of private businesses conducted by Duchy of Cornwall tenants or licensees. It could also cover transactions that cannot at present be foreseen but which may seem appropriate as conditions change.
  Clause 8 deals with accounts and audits. It extends the existing time limit for the presentation of duchy accounts to Parliament to comply with its present accounting period and allows for the appointment of additional auditors so that periods of sickness, holidays, and so on, of the existing auditor can be covered.
  Let me make it absolutely clear that the Bill is not intended to alter in any way the constitutional position of the duchy, nor its basic structure. Nor does it affect the majority of the activities that can be carried on during the life tenancy of any duke under the existing statutes.
  Perhaps I should also say something about the general public interest which in many ways coincides with that of the Duke of Cornwall himself in promoting the viability and profitability of the estate. The reason for this identity of interest is that when there is no Duke of Cornwall, the revenues of the duchy revert to the Sovereign and under the provisions of the Civil List Acts are then used to reduce the statutory sums payable for the Queen's Civil List. Similarly, when the duke is a minor, eight-ninths of the net revenues are placed at the Sovereign's disposal for a like abatement of Civil List payments. At present, one-quarter of the net revenues are voluntarily surrendered to the Consolidated Fund.
  As I mentioned earlier, the present measure is designed effectively to bring up-to-date the conditions in which the Duchy of Cornwall conducts its business while at the same time both fully protecting the legitimate long-term public interest in the proper management of the estate and having regard to the need to safeguard the interests of future Dukes of Cornwall. This means balancing the grants of additional commercial freedoms with the maintenance of proper restraints.
  The Bill in its present form goes a long way to meeting these requirements, but I shall, of course, be willing to look most carefully at any further matters that hon. Members may raise now or, if the Bill receives a Second Reading, in Committee. I commend the Bill to the House.
  10.24 pm
  Mr. Alan Williams: The Bill deals with the efficacy of the management machinery and the present methods used in providing income for the Prince of Wales. There are serious questions on whether this is the appropriate method of making payment or of deciding the level of that payment. I recognise that in opposing the Bill we would do nothing to influence those questions, but some of my hon. Friends will no doubt want to touch on these wider aspects that go way beyond the management issues.
  No one wants to deny the Prince of Wales reasonable and proper finances, but the point underlying the Bill is that experience over a period of years shows the vagaries
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  and unpredictabilities that arise from the archaic accounting techniques that have been used, which date back well into the last century. If money borrowed for capital improvements is repaid and in the meantime that improved capital asset is sold, the improvements still have to be met out of income, but the money received for the sale of the capital asset all goes into capital funds.
  I agree that there is a need to ensure that the resources of the duchy are husbanded. As in any other business, I hope that hon. Members in Committee can establish whether these resources are husbanded in the interests of those living on the duchy lands as well as those administering the duchy lands. I believe that the measure must be judged by whether it ensures that the real value of the estates is not eroded as income. The Minister has assured me in private that this purpose will be achieved, but he will appreciate that the Opposition wish to explore the matter more fully in Committee.
  The Bill must also be judged by whether the form of accounts provides adequate managerial control and the relevant information. I would seriously suggest that it does nothing of the sort and offers no improvement whatever in terms of control information. It may make possible more up-to-date methods of financing certain operations. In terms of providing the necessary control information for management, it achieves nothing.
  The measure also has to be judged by whether it curtails or advances parliamentary scrutiny of the administration of the estates. Here again, I suspect that the form of accounts proposed in the Bill fails to do that. We shall want to explore in Committee not only whether the existing checks and balances are fully maintained in the Bill but whether new and adequate checks and balances have been introduced to cover the changes proposed in clauses 3, 4 and 7.
  As a matter of interest I had the Library prepare some figures from 1970 to 1981 showing the relative movement in income on this estate going to the Prince of Wales compared to the retail index and to average earnings. Over that period, the net income received by the Prince has increased five and a half times. The retail price index increased fourfold and average earnings fivefold. I must admit that I was somewhat surprised to find the closeness of the relationship in the movement of the figures. A great deal depends on the choice of starting point. I chose 1970 because that was the time when the funds actually became due to the Prince on his attaining the appropriate age. Over this period there have been incredible variations in the return. By 1975, when the cost of living had doubled, the income had fallen by 60 per cent. That is why I say that the present method is unpredictable. It is an unsatisfactory method of deciding payment. We shall want to discuss these incredibly wide variations in Committee.
  It is invidious that the income source should be so unpredictable, although I recognise that this matter is outside the scope of the Bill. Fundamentally, the failure of the Bill is in its approach to accounting. It has to be remembered that accounting is important not just in terms of managerial efficiency but also in terms of the capabality of the House to scrutinise exactly what is happening in terms of the capital value and the withdrawal resource from the estate.
  The existing system is archaic, and so is the system proposed in the legislation. The new method will ease the problems of husbandry but will do nothing to facilitate financial control by the House of Commons, or by those

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  in charge of the administration of the estate. I am forced to draw unfavourable comparisons between the accounting requirements in the Bill and those in, for example, the Crown Agents Act 1979. In that, there is a duty on the Crown Agents
  "to prepare in respect of each accounting year a statement of accounts dealing with, and giving a true and fair view of the state of affairs, profit or loss, and source and application of funds of, the Crown Agents … Every statement of accounts prepared by the Crown Agents under this section shall conform to the best commercial standards".
  Hon. Members recognise that the methods of accountancy have evolved to facilitate the more effective and efficient control of business, and the estate is, after all, a business with enormous assets and acreage and several thousand people, whose well-being depends on the estate.
  Therefore, in Committee we shall be tabling amendments intended to improve financial control and reflect the changed face of the accounting art. It is impossible to achieve efficient control and scrutiny of the affairs of the Duchy when there is no capital value from which comparisons can be made, and no proper profit and loss account is drawn up by the normal criteria.
  We shall be putting forward suggestions to facilitate good management, to ensure that the real value of the duchy is maintained, to ensure that the Prince receives his fair entitlement from the profits rather than by this rather strange concept of a residual surplus, and-to enable proper parliamentary scrutiny, which the Bill does nothing to enhance.
  The appropriate time to deal with these points of difference would be in Committee. The objectives that many of my hon. Friends will espouse this evening will be achieved, if at all, mechanistically rather than by symbolic votes on Second Reading, the defeat of which will not advance the objectives that I suspect they have in mind. Therefore, although I realise that I may not be heeded, I advise my hon. Friends not to oppose the Bill at this stage but to support amendments in Committee.
  10.33 pm
  Mr. William Hamilton: It is worth looking at the way in which the Bill has been handled by the Government. The House may recollect that the Government originally tried to have the Second Reading of the Bill upstairs, off the Floor of the House, in a small Committee, by using Standing Order No. 66. Subparagraph (1) of that provides that a Government can seek the Second Reading of a Bill in a Committee by putting an order in front of the House that can be opposed only by 20 Members standing in their place.
  That is a legitimate exercise, except that the Government used that ploy on Friday 28 May, the day when the House was rising for the Whitsun Recess, and there were not 20 hon. Members to be found anywhere in the House. [Interruption.] The Government carefully calculated that it would be virtually impossible for any Opposition Member to get 20 hon. Members to the House on the day that the House rose for the Whitsun Recess. In addition, in the first instance, the Government sought to have the Bill treated as a Private Bill and to take it away from the scrutiny of the House as a whole.
  The story is even stranger than that. A Committee was set up to debate the Second Reading of the Bill, instead of discussing it on the Floor of the House. For very strange reasons that the Government have yet to elucidate, that Committee was abandoned. The Government decided,
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  after all, to take the Second Reading on the Floor of the House. However, they decided to do so at the fag-end of a day in which we have had two debates. The Government presumed that hon. Members would have left for their lodgings by now. However, we now have a rare opportunity to debate, and throw some light on, one of the darker recesses of the institution of monarchy. The genesis of the Bill is a mystery. Why is it being introduced now, at the fag-end of a Session. On whose initiative has it been introduced? Is it being brought forward because the duchy's owners and management are suffering from the financial restraints imposed by the Duchy of Cornwall Management Acts 1863 and 1893? The answer is probably that now that the heir to the throne is married, with a family to support—a family that will almost certainly increase—the need to augment the family income from the duchy has assumed an increasing urgency.
  When there is no Duke of Cornwall and when a reigning monarch has no son, the Duchy is in the hands of trustees and there may not be the same pressure to increase the duchy's revenues. But now, presumably, the situation is urgent, if not desperate. The young couple and their child William—Willie—have got to live, and the duchy is their only known source of income.
  Mr. John Maxton: My hon. Friend is breaking my heart.
  Mr. Hamilton: The last parliamentary inquiry into these matters was undertaken by the Civil List Select Committee in the Session 1971–72. I was a member of that Committee—[HON. MEMBERS: "Hear, hear."]—although my membership was opposed by he who now is Lord Boyd-Carpenter. He thought it improper for a person such as me to be on a Committee like that. [HON. MEMBERS: "Hear, hear."] However, his view was over-ruled by the House, and I duly took my place on that Committee—[HON. MEMBERS: "Hear, hear".]—which was chaired by the then Chancellor of the Exchequer, Mr. Barber. What has happened to him?
  The Select Committee's report was published on 22 November 1971. All the evidence—or, nearly all—was published for the first time and, as it happened, the last time. The House was precluded by subsequent legislation from ever discussing in detail the revenue, income and expenditure of the institution of monarchy. We cannot do that. Therefore, this occasion affords us a unique opportunity of examining a wee part of it.
  We took oral and written evidence from the officials of the duchy, including the Earl Waldegrave, KG, TD, then Lord Warden of the Stannaries, Lord Ashburton, KG, KCVO, the Receiver-General of the Duchy of Cornwall, Mr. AJL Lloyd, QC, Attorney-General to the Prince of Wales and Sir Patrick Kingsley, KCVO, Secretary and Keeper of the Records of the Duchy of Cornwall.
  Mr. Ivan Lawrence: All good lads.
  Mr. Hamilton: They submitted to us a memo outlining the history of the duchy plus an annex showing the accounts of the receipts and disbursements of the duchy for the year ended 31 December 1970. We took oral evidence on the basis of that memo on 6 July 1971, almost exactly 11 years ago to the day.
  Naturally, I was the first to put the questions to the officials of the duchy. I was interested in the origins of the duchy. As the Minister said carefully from his brief, the

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  duchy dates from 17 March 1337, when a new rank was added to the English peerage by Edward III, when his eldest son was created Duke of Cornwall by parliamentary charter. The charter was granted to Prince Edward and his heirs. It provided this estate, which originated a long way back and was taken from the lords of Cornwall, who originally obtained their estates from the plunder of William the Conqueror. We are talking about plundered land. The estates were described in the memo as being in Cornwall, Devon, Somerset, Dorset, Gloucester, Wiltshire, the Isles of Scilly and Kenington and forming a total in 1970 of 128,930 acres.
  It is important to understand that all this took place 600 years ago. At the time that the charter was granted, Edward III was aged 24 years, having succeeded to the throne at the age of 14 years. There was no democracy then as we know it today. Kings and landowners were all-powerful and they shared out the spoils as they wished. The kings and their sons had a fair whack.
  The memo states:
  "The Duchy of Cornwall was largely made up of the possessions of the Earls of Cornwall, which go back to 1066." Over the weekend the Prime Minister cajoled the
  railwaymen because they want to return to an agreement of 1919. Let the right hon. Lady read the 1066 agreement. Why does she adhere to the history books when it suits her purposes and upbraid the railwaymen for daring to wish to adhere to an agreement that was made about 63 years ago?
  The estate is presumed to be the private property of the Duke of Cornwall, although the duchy functions under Act of Parliament—the Duchy of Cornwall Management Acts 1863 and 1893—which provide that the accounts of the duchy must be presented annually to the House. They are not available in the Vote Office. I have tried to ensure that they are made available there so that all hon. Members can examine them. I am the only hon. Member who goes to the Library because I know when they should be published. Only one copy is available, but one can make a copy of that. I have one for every year and I have built up a nice little pile from which I shall quote in the latter part of my speech.
  As my right hon. Friend the Member for Swansea, West (Mr. Williams) said, the accounts are designed to prevent hon. Members from obtaining information rather than to disclose it. I quote from a Treasury memo presented to the Select Committee in 1971:
  "The income and the property of the Duchy of Cornwall is exempt from income tax, surtax, capital gains tax and estate duty."
  When questions were asked of the Treasury witness on this matter on 6 July 1971 by the former Leader of the House, the right hon. Member for Chelmsford (Mr. St. John-Stevas)—who was given the boot by the Prime Minister—and by my right hon. Friend the Member for Huyton (Sir H. Wilson), it was explained to us that the tax exemptions were based on the opinions of Law Officers given in 1913 and 1921.
  The right hon. Member for Chelmsford asked:
  "Following up on that point of the Duchy of Cornwall, why is the income from that Duchy not liable to tax?"
  Mr. Strudwick replied:
  "This question was raised with the Law Officers of the Crown, first in 1913, particularly in relation to mineral rights duty, and again in 1921. Their answer, I am afraid, which is all I have, does not really take us much further, because they simply
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  said that the principles which render … an Act of Parliament inapplicable to the Crown, unless the Crown is expressly named, apply also to the Prince of Wales in his capacity as Duke of Cornwall. This result arises from the peculiar title of the Prince of Wales to the Duchy of Cornwall. That is all they said. What the peculiar title is, I am afraid I cannot say."
  That matter was followed up by my then right hon. Friend, now unfortunately deceased, Mr. Charles Pannell, who was interested in such matters. He said:
  "I am interested in this Law Officers' opinion in 1913 on the Duchy of Cornwall. I should like to hear more about that. You have not in that document the circumstances that led to the first enquiry to obtain the Law Officer's opinion."
  The answer was:
  "I do not think I have it in any detail. The question did first arise in relation to mineral rights duty which was one of the four duties on land values imposed in 1910 by Lloyd George, I think, and this duty would have fallen perhaps heavily on the Duchy of Cornwall. Quite how the question came up, I do not think I can say. The opinion of the Law Officers was desired—this is the instruction—with reference to a question which had arisen between the Board of Inland Revenue and the Duchy of Cornwall, whether they were bound to make returns. I suppose—this is only guesswork—that the Board of Inland Revenue asked the Duchy of Cornwall to make returns of their mineral royalties for this purpose and the Duchy officials asked whether they had to do so."
  We have never received to this day a satisfactory answer from any Government, or from any Treasury official as to precisely why not one penny of the revenues and the income of the Prince of Wales is taxable.
  I want to quote one further passage. My right hon. Friend the Member for Huyton said:
  "I should like to ask a question of Mr. Strudwick, who I feel seems to be over-deferential towards the advice given by long-dead Law Officers. I think it was Sir Rufus Isaacs; he may well have been preoccupied with the transactions of another select committee at the time. As I understood Mr. Strudwick, the judgment was very short and a little inscrutable, because it referred to either the peculiar or the special nature of the Duchy of Cornwall, and did not go on to say what was peculiar or special. But the Inland Revenue, more trusting than they would be today, accepted it without question, and it seems to me they have gone on doing so. Has there been any further elucidation of that special or peculiar nature from later Law Officers?"
  The Treasury official, Mr. Strudwick, replied:
  "In 1921 we did put to the Law Officers the specific question of liability to income tax and the Law Officers of that time who, I understand, were named Hewart and Pollock, confirmed completely the 1913 opinion and said it applied to income tax, but again gave no reasons."
  We have never received any reason why those revenues should be tax-free. The present Prince of Wales has had an income from the duchy since he was a child of 3 or 4—from 1952 onwards. In 30 years that has amounted to several million pounds, on which not a penny of tax has been paid.
  The accounts for the year ended December 1981 are difficult to understand and I propose therefore to read from them:
  "Excess of receipts over disbursements for the year payable to His Royal Highness (of which 25 per cent. will be paid to the Treasury) was £771,480."
  Deducting one-quarter from that, last year the Prince of Wales received, tax free, from the estate £578,610. That figure will increase steadily. One of the purposes of the Bill is to so increase the efficiency of the management as to maximise and increase still further the revenues from the estate all of which can go, and probably will go, eventually into the pocket of the Prince of Wales.
  Sir John Biggs-Davison: Will the hon. Gentleman explain why the 24 per cent. payable to the Treasury is not a form of tax?
  Mr. Hamilton: I wish that I could write to the Treasury, or the Inland Revenue, and suggest that, instead of paying tax, I would give it a proportion of my income that I would decide. The Prince of Wales writes or telephones the Treasury and says "I will voluntarily pay you a proportion that I will state of my tax-free income from the duchy". That is a strange way to pay tax.
  The estate is big business. In the year ended 31 December 1981, £1,332,958 was spent on the purchase of securities. In addition, securities held on capital account at the end of the year had a market value of £3,626,823.
  The Minister talked about bringing the situation into the twentieth century. We should bring the whole method by which we pay for the Prince of Wales and other members of the monarchy into the modern age. If he is doing a job for the country, which most people believe that he is, he should be paid the rate for the job, just like other members of the Royal Family. He should not have to rely on a so-called private estate. There is certainly no defence for it being tax-free income when all our constituents, including the unemployed, are groaning under the increased tax burden imposed by the Government. The unemployed will pay tax on their dole, while this young man gets £½ million a year tax-free. That is the society that we are living in and that is what the Government seek to defend. The purpose of the Bill is to increase the efficiency with which the estate is exploited for the exclusive benefit of that family. It is time that that was ended.
  I have an article written two years ago in a high-quality national newspaper, the Financial Times. I name it to show how completely authoritative my remarks are. It dealt specifically with the complicated finances of the Duchy of Cornwall. The duchy management was then, and probably is now, trying to assert its right over all the river beds in the duchy and was charging mooring fees. Beach charges had been increased. The rent for a wide-mouthed beach in North Cornwall was increased from £5 to £500 and at Polzeath from £100 to £2,000. The duchy states that it owns 11,000 acres of river bed and charges between £1·50 and £2 a foot for it. It owns 160 miles of foreshore for which it makes charges. So there is no doubt that it is big business, and that it is exploiting every acre, every river and every shore on which it can get its hands. The Government are introducing this Bill to increase the efficiency of that exploitation. If the money went into the public purse for the common good, I should find it defensible.
  Mr. David Penhaligon: Is the hon. Gentleman aware that, where river beds are involved, if one of my constituents can produce a deed to prove that he owns it, the Duke of Cornwall assumes that he does indeed own it, and can exploit it from thereon.
  Mr. Hamilton: The hon. Member for Truro (Mr. Penhaligon) was mentioned in the article to which I referred, and I hope that he will speak in this debate, because he alleged in the article that he thought that the Duchy management was efficient and treated its tenants fairly, although I have evidence from people who think otherwise.
  However, the argument relates to the purposes for which the revenues are used. The fiction of this being a private estate should be abandoned. The charter of 1337 should be repealed, and the matter should be brought into public hands,
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  I sent a memorandum to the national executive of the Labour Party a year ago, arguing that the Duchy of Cornwall and the. Duchy of Lancaster, together with the grace and favour houses, should be brought under one Ministry called the Ministry of the Crown, that that Ministry should be accountable to this House, and that the revenues raised from them should go to the Chancellor of the Exchequer or the Consolidated Fund—in short, to provide money for the public benefit, not for the benefit of a private individual.
  I want to ask the Minister one or two questions which could perhaps be answered when we reach the Committee stage. I have already asked him several questions, but there is still the important matter of investment. How will the management of the estate be publicly accountable for the investments that it makes? I ask that question because it is a matter of public concern. For example, would it be allowed to invest in South Africa? Would it be allowed to invest in the armaments industry? What control will this House have over the investment policy of the management, once the Bill is passed? Those are important questions to which we need answers.
  The fundamental problem remains that in this day and age, when everyone in this land is expected to pay his due quota of taxes, it is quite obscene that the revenue from this estate should be tax-free. That is why we shall oppose the Bill.
  11.2 pm
  Mr. Bob Cryer: I want to make a few comments based on the claims made by the Minister. He made the extraordinary claim that this is a process of modernisation. In fact, its basis seems to be an eighteenth century antique notion that the heir to the throne should manage estates. In a modern industrial society, surely the heir to the throne should have a wider knowledge than simply management of what are or could be largely farming estates.
  First, I echo what my hon. Friend the Member for Fife, Central (Mr. Hamilton) said. When the heir to the throne and the monarch provide a public service which many people appreciate, they should be paid a salary for the job. The system whereby they are paid an amount of money, called the Civil List, from which the heir is provided with money, should be swept away. It creates a sense of injustice in many people when they see a massive chunk of money called the Civil List allocated to one person who does not pay tax.
  Mr. Nicholas Baker: Does the hon. Gentleman agree that people would feel less worried and envious—if any do—if they realised that most of the money goes in salaries to people who provide a service, along with the Royal individuals?
  Mr. Cryer: I do not cavil at the fact that some of the Civil List goes to pay wages and salaries. However, it would be fairer and more open for the monarch and the heir to be paid a clear and accountable salary. They are public figures, carrying out public duties, and as such should be paid a salary. The upkeep and maintenance of other properties should be paid for by the State in the ordinary way.
  I would go further than that and say that instead of people peering at Buckingham Palace from the outside in awe, a much greater proportion of it than the art gallery

  119
  and the royal mews should be open to the public. That would give people more opportunity to look at what is a national and not a personal architectural treasure.
  My hon. Friend the Member for Fife, Central has already said that the tax burden has increased under this Government. Where a person receives a considerable sum tax-free, there is a strong sense of injustice, particularly since, as my hon. Friend pointed out, under this Government the unemployed will have to pay tax.
  I should have thought that one of the training grounds for the heir to the throne should be that he, like the rest of the nation, should pay tax. That is not dealt with by the Bill, which is more a royal supplementary benefit Bill than the process of modernisation which the Minister claims.
  Under clause 4, for example, loans are to be simply written off. The accountability provided for by the Bill is extremely slender. It gives a good deal of power to the Treasury. I am not in favour of simply allowing the Treasury to approve of expenditure without immediate and clear approval by the House. It would have been in order for the Minister to suggest, for example, that orders should be placed before the House for greater public accountability. Under the negative procedure, orders do not impose great accountability. However, it would be better than giving a Ministry power to act without any direct authority from the House apart from primary legislation. We have a subordinate legislation system and we should use it because it gives elected representatives some accountability.
  The Minister said that the Bill was at least in part a modernising process. The legislative process should be used to bring the Duchy of Cornwall and the Crown in general into conformity with general legislation—such as the Health and Safety at Work etc. Act 1974, agricultural rents provisions, and so forth—which has been passed by the House.
  If the heir to the throne is to undergo training, the estate that helps provide that training should not be exempt from many of the statutory requirements that apply to the nation at large. It is antique that palaces and the employees within them should be exempt from legislation.
  I realise that attempts are made to impose the standards of, for example, the Health and Safety at Work etc. Act 1974, but that their application, through improvement and prohibition notices and so on, are not possible against the Crown. That is one area that could have been remedied in this brief legislation. I should have thought it was extremely important that such a modernisation process should recognise that we are an industrial nation, not one with an eighteenth or nineteenth century landed gentry, which is what the Minister claims.
  Income tax was mentioned by my hon. Friend the Member for Fife, Central. In a brief that it published a couple of years ago the Library stated;
  "The Queen does not pay income tax on either the Civil List or on the revenues of the Duchy of Lancaster paid to the Privy Purse. The Crown Private Estate Act of 1962 made the Sovereign liable only to rates and to Schedule A income tax, since abolished, so the Queen does not pay income tax on farm profits etc. and is in fact entitled to claim refund on amy income tax suffered at source, on company dividends, for example."]
  That makes the majority of the nation who pay income tax and the other forms of taxes feel a sense of injustice.
  The brief then states:
  120
  "Prince Charles does not pay income tax on the revenue from the Duchy of Cornwall. The gesture of returning half this revenue to the Consolidated Fund is a partial recompense for this and follows a precedent set by Edward VIII."
  The other half of that revenue goes to the Civil List, so that all the revenue ends up in the royal pockets.
  On estate duties the brief states:
  "The Sovereign is exempt from paying death duties on all estates, including Sandringham and Balmoral; nor is she liable to capital gains tax … No estate duties are payable on the Duchy of Cornwall."
  With such a background, and with increasing taxes, I should have thought that this tiny measure, which will increase the revenue to the Duchy of Cornwall, should have been looked at in the much wider context to which I have referred. It demonstrates double standards—one for ordinary working men and women and another for the heir to the throne.
  I believe that the heir to the throne should experience some of the difficulties that the vast majority of the people face, including some of the burdens that are thrust upon the nation by the Government. That is the proper experience that any heir to the throne should go through. The Bill does not give him that opportunity. Therefore, it remains a feeble attempt at a royal supplementary benefit Bill.
  11.13 pm
  Mr. Hayhoe: I shall reply briefly to some of the points that have been made.
  I welcome the comments of the right hon. Member for Swansea, West (Mr. Williams) and his constructive approach to the Bill. I assure him that during the Committee stage we shall look at the various points that he has mentioned. I hope that it will be possible to provide some assurance to him on many of the points that he has raised. Most careful consideration will be given to those matters.
  The rest of the short debate has been taken up by two characteristically sour speeches, one from the hon. Member for Fife, Central (Mr. Hamilton), who tried to make an issue of the fact that the Second Reading Committee procedure had been considered for the Bill. As he knows, those matters are discussed through the usual channels. The Bill came back to the Floor of the House so that it could be debated, as the hon. Gentleman suggested in his Early-Day Motion, after discussion through the usual channels. That decision had been made before the hon. Gentleman put down his Early-Day Motion. It was also interesting to note that five people supported him on his Early-Day Motion after the Bill had come back to be taken on the Floor of the House.
  I was sorry that the hon. Gentleman thought that it was necessary, although it was entirely within his parliamentary right so to do, to inflict upon the House his rather pathetic comments and the same discordant refrain that we have heard from him so often in the past, which have added nothing to the sum total of knowledge about his attitude to those matters or to the general knowledge of the House.
  The hon. Gentleman gave us fresh cause to be pleased at the intellectual perceptions of Lord Boyd-Carpenter in his comments about the noble Lord's membership of the Select Committee. He talked about several matters, the origin of the estates, the twelfth century, ASLEF and tax arrangements. They are all important matters but remote from the narrow scope of the Bill.

  121
  I was glad that the hon. Gentleman corrected the figure for the duchy revenue. He made it clear that the revenue, one-quarter of which is voluntarily given by the present Duke to the Treasury, is £771,000 rather than the £1 million-plus that is quoted in the hon. Gentleman's Early-Day Motion. He also asked about the investment policy and the investment constraints that the Bill would put on the administrators of the duchy. I am advised that the constraints are those of the Trustee Investment Act 1961 and the wider range securities, as they are referred to in the Act.
  The comments of the hon. Member for Keighley (Mr. Cryer) were put into proper perspective in the intervention of my hon. Friend the Member for Dorset, North (Mr. Baker). The overwhelming proportion of the revenue goes in staff salaries. It gives jobs to people. It allows the Duke of Cornwall to contribute to national life, which is highly appreciated by the vast majority of our fellow citizens who reject the politics of envy and discord that have been clearly expressed by Opposition Members.
  Mr. Dennis Skinner: The Minister is taking a liberty when he attacks my hon. Friends for raising the matter. The Tory Government always prate about freedom. My hon. Friends are quite right to make those statements. Is it not fair also to acknowledge that we represent constituents, such as widows, who are being taxed on their £6 a week National Coal Board pension—net incomes of less than £37 a week—and that it is right to draw attention to the Government's double standards? The Prime Minister refuses to give any relief of those widows' tax burden. The coal board widows have never before had to pay tax on that pension. We are also drawing attention to the fact that no tax is paid on the revenues. It is honourable for anyone to draw attention to those double standards.
  Mr. Hayhoe: It is interesting to note how thin skinned the hon. Member for Bolsover (Mr. Skinner) is. I am surprised that he is so sensitive. As one whose comments in the House are always attuned in such carefully moderated terms, he would surely be the first to accept that other people have a right to comment on what is said by his hon. Friends. I made it perfectly clear that the hon. Gentleman and his hon. Friends had the parliamentary right to raise these matters. I merely regretted that they did not have the self-control to deny themselves that opportunity.
  Mr. Maxton: Will the Minister answer the basic question? As a Treasury Minister who has just dealt with a Finance Bill which increases taxes for a large number of people, does he believe that it is right that the Duke of Cornwall should not pay tax? Will he answer that simple question?
  Mr. Hayhoe: This Bill is not about taxation, but I am certainly content with the present arrangements. I believe that the attacks made on the royal family tonight would be rejected by the vast majority of our fellow citizens. Of course, there will be some who share the views expressed by Opposition Members, but I think that if they go back to their constituencies and talk, for example, to the coal miners' widows, to whom reference has been made, they will find much wider support for the royal family than has been expressed in the debate.
  I therefore commend the Bill to the House.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 101, Noes 4.

  Division No. 256]

  [11.20 pm

  AYES

  Alexander, Richard

  MacGregor, John

  Ancram, Michael

  Major, John

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

  Marlow, Antony

  Baker, Nicholas (N Dorset)

  Mather, Carol

  Beaumont-Dark, Anthony

  Mawby, Ray

  Beith, A. J.

  Mayhew, Patrick

  Benyon, Thomas (A'don)

  Mellor, David

  Berry, Hon Anthony

  Mills, Iain (Meriden)

  Bevan, David Gilroy

  Moate, Roger

  Biggs-Davison, Sir John

  Montgomery, Fergus

  Blackburn, John

  Mudd, David

  Bonsor, Sir Nicholas

  Murphy, Christopher

  Boscawen, Hon Robert

  Needham, Richard

  Bright, Graham

  Nelson, Anthony

  Brinton, Tim

  Neubert, Michael

  Brocklebank-Fowler, C.

  Newton, Tony

  Brown, Michael(Brigg & Sc'n)

  Osborn, John

  Browne, John (Winchester)

  Owen, Rt Hon Dr David

  Bruce-Gardyne, John

  Page, Richard (SW Herts)

  Butcher, John

  Penhaligon, David

  Cadbury, Jocelyn

  Percival, Sir Ian

  Carlisle, Kenneth (Lincoln)

  Proctor, K. Harvey

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

  Renton, Tim

  Chalker, Mrs. Lynda

  Rhodes James, Robert

  Clarke, Kenneth (Rushcliffe)

  Ridsdale, Sir Julian

  Cockeram, Eric

  Rumbold, Mrs A. C. R.

  Cope, John

  Sainsbury, Hon Timothy

  Costain, Sir Albert

  St. John-Stevas, Rt Hon N.

  Cranborne, Viscount

  Shaw, Giles (Pudsey)

  Dorrell, Stephen

  Shepherd, Colin (Hereford)

  Dover, Denshore

  Smith, Tim (Beaconsfield)

  Dunn, Robert (Datrford)

  Speed, Keith

  Fairgrieve, Sir Russell

  Speller, Tony

  Faith, Mrs Sheila

  Stanbrook, Ivor

  Garel-Jones, Tristan

  Stevens, Martin

  Goodlad, Alastair

  Stradling Thomas, J.

  Griffiths, Peter Portsm'th N)

  Tebbit, Rt Hon Norman

  Gummer, John Selwyn

  Thomas, Mike (Newcastle E)

  Hamilton, Hon A.

  Thompson, Donald

  Hampson, Dr Keith

  Thorne, Neil (Ilford South)

  Hawkins, Sir Paul

  Trippier, David

  Hawksley, Warren

  Waddington, David

  Hayhoe, Barney

  Waller, Gary

  Henderson, Barry

  Wells, Bowen

  Jopling, Rt Hon Michael

  Wheeler, John

  Lang, Ian

  Wickenden, Keith

  Latham, Michael

  Wilkinson, John

  Lawrence, Ivan

  Wolfson, Mark

  Lester, Jim (Beeston)

  Lloyd, Peter (Fareham)

  Tellers for the Ayes:

  Lyell, Nicholas

  Mr. Peter Brooke and

  McCrindle, Robert

  Mr. David Hunt.

  Macfarlane, Neil

  NOES

  Evans, John (Newton)

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

  Tellers for the Noes:

  Parry, Robert

  Mr. Bob Cryer and

  Skinner, Dennis

  Mr. John Maxton.

  Question accordingly agreed to.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  ADMINISTRATION OF JUSTICE [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to make further provision with respect to the administration of justice and matters connected therewith, it is expedient to authorise—

  (1) The payment out of the Consolidated Fund of—

  123

  (a) any sums required for making good defaults required to be made good by virtue of the said Act—

  (i) of the Accountant General of the Supreme Court;

  (ii) of a manager of a common investment fund;

  (iii) of a member of the Northern Ireland Court Service;

  so far as those sums are not paid out of moneys provided by Parliament;

  (b) any sums required for making good any amount by which, after deducting—

  (i) any sum required by the Treasury to be set aside to provide for depreciation; and

  (ii) such sum as the Lord Chancellor may direct to be paid in respect of the cost of administering funds in court,

  the income received by the National Debt Commissioners in any year from investments made in consequence of the transfer of money to them under rules made with respect to funds in court falls short of the aggregate of the sums due to be paid or credited in respect of that year by way of interest on funds in court; and

  (c) any sums due, under rules made with respect to funds in court, from the Commissioners to the Accountant General which they are unable to pay.

  (2) The payment out of money provided by Parliament—

  (a) of any sums required to be paid for carrying into effect the provisions of the Act relating to money, securities and effects in any court and to money and securities for which the Accountant General of the Supreme Court or a manager of a common investment fund is responsible under the Act;

  (b) of any sums required for the payment—

  (i) of the salary and remuneration of an investment manager appointed under the Act for a common investment fund and his officers and of the other expenses of executing the office of an investment manager;

  (ii) of allowances to justices of the peace in Northern Ireland and judges in Northern Ireland.

  (3) The payment into the Consolidated Fund of—

  (a) the amount by which the income of the Commissioners received as mentioned in paragraph 1(b) above, after deducting the sums mentioned in that paragraph, exceeds the aggregate of the sums due to be paid or credited as mentioned in that paragraph;

  (b) any sums deducted from the income of the Commissioners as mentioned in paragraph 1(b)(ii) above; and

  (c) any fees and expenses recovered under the provisions of the Act relating to common investment schemes.—[Mr. Archie Hamilton.]

  Altrincham and Sale (Bypass)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]
  11.30 pm
  Mr. Fergus Montgomery: I am grateful for this opportunity to highlight the need for the Altrincham and Sale western bypass. I deprecate the attitude of the Labour-controlled Greater Manchester county council and its decision, which takes some understanding, to abandon the scheme for the bypass. To say that the decision came as a bombshell in my constituency would not be under-estimating the feelings of people.
  Ever since the late 1950s, there has been the line of a bypass which proves that the need has existed for this type of road over the past 20 years. The route runs entirely through green belt land and would not necessitate the destruction of any houses. It would cost little to safeguard. The bypass was shown as a priority scheme in the recently approved structure plan. For this reason, Trafford council, which is keenly in favour of the bypass, did not argue for it at the recent examination in public.
  Of course, if Trafford council had had any notion that the Labour-controlled Greater Manchester council intended to perform a U-turn on the issue and to change its mind in two years, the Trafford council would have argued forcibly in public the need for the road.
  As the bypass forms part of the approved structure plan, Trafford council finds difficulty in understanding the arguments now put forward by Greater Manchester council. The minutes of the transportation strategy committee of the Greater Manchester council on 13 May 1982 state:
  "It was felt that the scheme went against the broad themes of the structure plan which sought to revive the centre of the conurbation and discourage further outward movement of population and development."
  Yet this is the same structure plan that was approved by the Secretary of State in March 1981 and which lists the Altrincham and Sale western bypass as one of only six schemes that were labelled "first priority group". It seems that on this issue Greater Manchester council speaks with two voices.
  In 1978 the official Department of Transport estimate of hazardous loads moved to and from the Shell complex at Carrington was 6,000 tonnes a week. Trafford council's own estimate now is 8,000 to 9,000 tonnes a week. A tremendous problem is caused in some parts of my constituency. A great deal of aggravation is involved. I have attended protest meetings of local residents who feel strongly about heavy lorries and the hazardous loads carried through their area.
  I think particularly of the Harboro Road and Harboro Way in Sale, where the residents have been up in arms about this problem for many years. They are concerned about the effects on their properties of so many heavy lorries using the roads. For many people in my constituency, the Altrincham-Sale western bypass would be a godsend, because it would take much of the heavy traffic that at present causes them much annoyance, and give them peace and quiet in their homes.
  However, it is not only the residents in my constituency who feel strongly about the bypass, because it also has the support of industry. Both the Broadheath industrial estate joint committee and Shell UK Ltd., support the scheme.

  125
  They realise that the bypass, if built, would improve communications for both the Broadheath industrial estate and the Carrington industrial complex.
  The bypass would give access to the western side of the Broadheath estate, and this would be an enormous asset to the firms on the estate. This also ties in with what was regarded as Greater Manchester council policy on employment in the south-west sector of Greater Manchester. The draft structure plan states:
  "The only area without a large high quality industrial estate is the south-western part of the county. The local planning authority intends to make provision for an industrial estate in the area."
  Although this policy was not approved by the Secretary of State, it was clear, and, the county council accepted, that this was not because the Secretary of State disputed the need for such employment, but because a separate policy was superfluous in the context of other approved bodies. The county council, on receiving the Secretary of State's decision, confirmed that it still intended to seek to implement the intention of the policy.
  Further, a bypass would provide a direct approach to the inner city and to Trafford Park, with its enormous industrial estate, and, as a consequence, an entry to the Trafford Park-Salford docks enterprise zone. Trafford council was recently informed that because Trafford is an enterprise zone authority, it is being included in the possible distribution of urban programme resources.
  The important point is that Trafford has at last been recognised as having an inner urban need, which bears on the related need for industrial development in Broadheath and Partington and is an extra argument in favour of the western bypass.
  It is strange that for years we have been trying to point out, under successive Governments, that there is an urgent need in Trafford. It does not consist only of residential property, and areas such as Old Trafford have enormous urban problems that compare both with Salford and the city of Manchester, which have done well under urban programmes while Trafford had been ignored. Under this Government, at last some help is being given.
  I also remind my hon. Friend of the policy enunciated by the Government. We recognise the environmental problems created by heavy lorries. Recently, the Department of Transport published circular 3/82, which states:
  "Wherever possible bypass schemes and urban road projects designed to relieve the problems caused by heavy lorries, should be given the highest priority by county councils."
  Perhaps my hon. Friend will comment on that aspect of Government policy in the light of the decision by Greater Manchester council to allow the urban traffic congestion in this area to continue.
  It is ironic that one of the reasons for the council's decision is what was referred to in the minutes of its transport committee as
  "The possible abstraction of commuters from the parallel rail line."
  I know that we have a good rail link between my constituency and the city of Manchester, but to argue against the road on the basis that it would take passengers away from the railways is nonsense. I can only hope that whoever dreamed up that objection would like to face some of my constituents who work in Manchester when we are in the throes of a rail strike.
  Our local paper, the Sale Guardian, said last week:
  126
  "Commuter chaos hit Sale workers on Monday and early on Tuesday morning as the train service halted for what amounted to a one and a half day strike."
  Later, it stated:
  "The only inconvenience suffered by bus passengers on Monday and early on Tuesday was that of delays caused by increased traffic on the roads—the main A56 through Sale was affected by delays for commuters on their way to Manchester". It is not only when there are rail strikes that there are delays on the A56. The A56 is a very crowded road; that is one reason why we believe that the bypass is essential to our area.
  I remind my hon. Friend of what is referred to as the rate of return. The county council's own traffic study—"Salford and West Trafford Study—Report of Findings 1981"—stated that the bypass would reduce traffic on the A56 by 35 per cent. to 40 per cent., thus improving conditions for pedestrians, buses and local traffic; reduce commercial traffic by 20 per cent. in Altrincham and by 50 per cent. in Sale; and have a first-year rate of return of over 20 per cent. That means that when the cost of the bypass was compared with the benefits that would accrue, the council reckoned that there would be a 20 per cent. return on investment in the first year.
  I shall sum up my reasons for believing that Greater Manchester council is wrong and that the bypass should be kept in the programme. First, at present there is gross overloading on the A56. That road runs right through my constituency, right through the town of Altrincham and through Sale. If runs through a residential area and a shopping area. It is not a particularly wide road, but it carries a tremendous volume of traffic. Therefore, in rush hour there is congestion, which causes delays. Those delays could be avoided if we only had the western bypass.
  Secondly, if the bypass is built it will take many heavy lorries and hazardous loads away from residential areas. I should have thought that that was in accord with Government thinking on the issue. If the bypass were built and there were fewer lorries and hazardous loads going though our residential streets, it would be widely welcomed by my constituents.
  Thirdly, at present we face a critical situation at the Carrington industrial complex. Jobs are at stake. It must be remembered that the Manchester overspill estate was built at Partington in the 1960s with the prospect of jobs being available nearby. Therefore, anything that is done to improve the infrastructure of the area must be beneficial and the bypass would certainly be a help.
  The bypass would certainly help Broadheath industrial estate, which also has had serious problems. Access at the eastern end of the estate is not particularly good, while there is virtually no access at the western end of the estate. The bypass would provide good, modern access at the western end and that would be of enormous benefit to the firms on the Broadheath estate.
  I do not know whether the Minister is aware of the fact, but I am told that the county engineer believes that the project should be retained. Therefore, the decision by the Labour-controlled transportation strategy committee of the Greater Manchester council is at variance with the views of its chief official. Surely the views of a technical expert should carry some weight with the laymen on the committee.
  Finally, the Greater Manchester surface transport action group wrote to the chief executive of the Greater Manchester council on 16 February in a letter entitled:

  127
  "Sale and Altrincham Westerly Bypass."
  The letter said:
  "Members of the Surface Transport Action Group are concerned over the proposal to abandon the Sale and Altrincham Westerly Bypass and urge the County Council to reconsider this decision.
  We believe the bypass is urgently needed on economic and environmental grounds to (a) improve access to and advance industrial development in the Trafford District, (b) relieve the heavily congested A56 and (c) link the existing M56 motorway to the proposed Carrington spur.
  Although we are pleased that the Carrington Spur is scheduled to start in 1983–84 we feel that this will not be the complete solution to Trafford's problems. Without the Sale and Altrincham Westerly Bypass local industrial traffic will be forced to make longer and more costly journeys which could result in a decline of industry in Trafford and loss of jobs.
  We are also concerned about the need to segregate the movement of hazardous goods from residential areas. The present road system makes such segregation impossible in Trafford.
  I hope you will take our comments into consideration and that the Sale and Altrincham Westerly Bypass will be retained in the firm programme."
  That states succinctly the overwhelming case for the road. I hope that my hon. Friend will tell me that she agrees with it when she replies to the debate.
  11.45 pm
  The Under-Secretary of State for Transport (Mrs. Lynda Chalker): My hon. Friend the Member for Altrincham and Sale (Mr. Montgomery) was fortunate to secure the Adjournment debate, because he has assiduously supported proposals for a new road to the west of Altrincham and Sale.
  Only last week I was in Manchester to meet the Greater Manchester council, the City of Salford and Trafford borough council to discuss principally trunk road matters, but at the same time I heard something about local roads and saw some of the problems on the ground. I do not lack understanding of what my hon. Friend has been telling the House.
  There is no dispute between us about the importance of roads. I think that my hon. Friend will agree that the North-West has fared relatively well over the years. It is arguable that it has one of the best and most complete highway networks anywhere in the country. It has the greatest mileage of motorway next to London and the South-East, with especially good communications between Liverpool and Manchester and across the Pennines. It has first-class links to the North and South, which are provided by the M6 and complemented by the M61.
  However, as the local authority representatives said during my visit to Manchester last week, there are still essential improvements to be made. We need bypasses for the sake of an improved environment, particularly for those affected by heavy goods vehicles. We must remember that 80 per cent. of freight movements are by road. British industry depends on lorries. We recognise the economic benefits to be gained by reducing traffic delays and in reducing the cost of accidents, especially to local communities. These are the Government's objectives.
  The bypass goes back to the SELNEC highway plan of 1962 and beyond, which was a blueprint for a strategic highway network for south-east Lancashire and north-east Cheshire for the 1970s and 1980s. It was an ambitious concept which, even allowing for the more buoyant
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  economy of the 1960s and 1970s, did not have sufficient regard to the question of the funds that were likely to be available. Subsequent revisions of that plan provide the basis for today's highway network in the larger part of what is now Greater Manchester.
  The plan's evolution through the 1970s and 1980s means that many of the schemes have had to be reviewed in the light of changing needs and resources. The Altrincham and Sale westerly bypass was planned as a major road linking the M56 motorway at Bowden to a junction on the M63—the Stretford-Eccles bypass, which is now part of the Manchester outer ring road—at Urmston. Its role was to act as a replacement for the A56 by providing a route for through traffic to the M62 trans-Pennine motorway and for local traffic between Altrincham and Manchester.
  When the Greater Manchester council inherited the SELNEC transportation plan in 1974 it systematically reviewed the proposals. The Altrincham and Sale scheme was examined both as part of the study of the strategic network in Greater Manchester and as part of a specific study of the Salford and West Trafford area.
  The conclusions arising from these deliberations have given rise to the debate. It was on 13 May that the GMC resolved that
  "there is no longer any need to maintain the protection currently afforded to the route of the Altrincham and Sale westerly bypass … for development control purposes and that such protection is abandoned."
  My hon. Friend is well aware that I am not permitted to intervene in that decision. Whether any local road proposal such as this should go ahead is a matter for the statutory local highway authority alone. I realise that my hon. Friend may find that hard to accept, but it has long been the way in which our decisions on road schemes have been made.
  My hon. Friend, as always, argued forcibly in favour of the proposal. Although I understand exactly why he raised the matter, he must put the case directly to the Greater Manchester council, beause it must make the decision. My hon. Friend might have it in mind that the by-pass should be constructed as a trunk road. A case for that cannot be sustained in the light of all the other plans. Altrincham and Sale are already by-passed to the east by the M56, opened in 1974, which connects with the Manchester outer ring road, but it does not take the traffic that wishes to go directly from Sale to the Manchester conurbation.
  We acknowledged in 1978 that, by de-trunking the A.56, with the agreement of the Greater Manchester council, that would be the pattern in my hon. Friend's area. The A56, which I accept is a busy road now forms part of the local network. Greater Manchester council has not argued that a westerly by-pass of Altrincham and Sale would be anything other than a local road scheme. It has not tried to persuade the Government that it should be a trunk road.
  Apart from those considerations, it would be wrong to assume that trunk road status confers priority. Many worthwhile and desirable schemes are already in the pipeline and, regrettably, some of them are now suspended. There is a great problem about assessing carefully the priorities across Britain.
  In our recent White Paper "Policy for Roads: England 1981", we made it clear that bypasses, along with roads that aid economic recovery, are being given top priority,

  129
  but that does not mean that we can press ahead with every scheme at once. In the 1982–83 transport supplementary grant settlement, about 35 new local bypasses were accepted for grant and we have already made it clear that we shall give favourable consideration to bypass proposals in the coming year's settlement and give tangible support to the councils whose programmes included schemes to remove heavy traffic from towns and villages.
  In that respect, the Department is offering a carrot but it has no stick. We can encourage local authorities to formulate proposals but we cannot compel them to make them. Decisions as to whether local schemes are to go ahead are left, rightly, for the local highway authorities.
  I know that this will be a dispappointing answer for my hon. Friend, but I am not in a position to do what he asked me tonight. He referred to the problem of heavy lorries in his constituency and although there are no easy solutions to that problem, I assure him that we are conscious of the importance of those vehicles and all freight movements, 80 per cent. of which now go by road. We are considering the possibilities of transferring large quantities of freight to rail, but they are limited and they become more so now, as my hon. Friend will understand.
  Therefore, we must strike a balance between the impact of heavy vehicles on the environment and the needs of industry and commerce. That is why we are proceeding to make lorries safer and quieter, to enforce higher standards of braking and loading and we shall make sure that there is no lack of power available to local authorities to ensure that lorries are kept off roads not designed to take them. Where considerable environmental benefits are expected, there is justification for imposing detours on heavy traffic.
  I fully understand my hon. Friend's anxiety about hazardous loads. In my part of the country we have similar problems. My hon. Friend mentioned the Carrington spur, which will serve the large plant at Carrington. One thing my hon. Friend did not mention, was the way in which any bypass along the route that he has discussed would cut through open land that I am advised is of a high agricultural quality—grade 2. That in itself is not an overriding consideration, but it is an important factor that we have to consider with all the others.
  I have already said to my hon. Friend, and he is well aware of the fact, that his area is well served by the M56 to the east and M63 to the north. While they cannot take all the problems off his local roads, he must accept that that area has motorways while many other towns and villages are waiting for their first bypass, and are many miles from the nearest motorway. I fully understand my hon. Friend's disappointment about the fact that I cannot
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  intervene. I cannot disregard the fact that the A56 passes through a commercial and industrial area and generates a good deal of its own heavy traffic.
  I wish to end on a more encouraging note. I have already mentioned my recent visit to Manchester when there was some discussion about a local bypass, which is of considerable interest and importance to an area of Trafford adjoining his constituency. That is where I return to the Carrington spur. It is a Greater Manchester council proposal to link the Carrington petrochemical complex and other industrial sites with the M63 motorway. The Greater Manchester council is anxious that that should go ahead quickly, and will be including it in its transport policies and programmes for 1983–84. I am certain that that will bring relief to my hon. Friend's constituents.
  A prerequisite of the scheme is that certain associated improvements are carried out to the M63 which is, in part, a two-lane road with closely spaced junctions. I gave the Greater Manchester council an assurance that I would do everything possible to enable that important scheme to go ahead. It will remove heavy traffic—some of it carrying chemicals—from residential streets in my hon. Friend's area.
  My officials are already working closely with the Greater Manchester council on the design of the Carrington spur-M63 junction and my hon. Friend will be aware that we have employed consultants to design and supervise improvements to Barton high level bridge, which has been a notorious bottle neck from which traffic can often tail back to the area of which he has been speaking.
  I hope that my hon. Friend will understand that my encouraging words about the Carrington spur proposal are the best that I can do tonight. I know that the route it will take forms part of the Altrincham and Sale westerly bypass, for which he has argued so strongly. It is a little help towards a difficult problem over which I do not have the full power of decision. My hon. Friend has made plain his anxieties and those of his constituents over the Greater Manchester council's decision to abandon the bypass. I hope that he will understand that that decision, quite properly, is the authority's alone. It is the statutory authority and I cannot interfere.
  I understand the problem of the impact on the environment along the A56, of which he has spoken, and I hope that there may be other routeing proposals that may bring a little relief, even if I have no power to intervene as he would wish over the westerly bypass.
  Question put and agreed to.
  Adjourned accordingly at one minute to Twelve o'clock.

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

Trade Union Annual Returns and Accounts
Lord Orr-Ewing: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many of the 12 largest trade unions have now filed their accounts for 1981; how many are in arrears; and which ones.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, I understand from the certification officer that of the 12 largest unions, five have submitted annual returns and accounts for 1981. In one other case (the Amalgamated Union of Engineering Workers) a return is outstanding from the Technical, Administrative and Supervisory Section. Six trade unions have not yet submitted their annual returns. They are the National and Local Government Officers' Association; the National Union of Public Employees; the Association of Scientific, Technical and Managerial Staffs; the Electrical, Electronic Telecommunication and Plumbing Union; the National Union of Mineworkers; and the Union of Construction Allied Trades and Technicians.
Lord Orr-Ewing: My Lords, is my noble friend aware that it is a disappointment that so many unions —half of them—should be late in filing their accounts? Is it not a fact that, under Labour legislation of 1974, the unions are obliged to file their accounts for the year by June of the following year? And is my noble friend aware that, in the private sector, if one does not file accounts for a public company, one is threatened with imprisonment—that all the directors can be threatened with imprisonment? Can my noble friend say whether there are any sanctions against unions which transgress along these lines?
Earl Ferrers: I agree with my noble friend that the penalties in the private sector operate under company legislation, whereas those which operate in this particular sector come under the Trade Unions and Labour Relations Act 1974. The position is that there is the possibility of the certification officer to prosecute if he feels that this is necessary. If he does do so the maximum fine is £100 for a trade union or employers' association or individuals of either. The fact is that he has not yet found it appropriate to take this action.
Lord Molloy: My Lords, is the noble Lord aware that the certification officer—like his predecessor, the Registrar of Friendly Societies—has to submit reports, and that anyone in this land can ascertain whether or
546
not in the specified period, including what is called the "extra time", any trade union or any member of the Confederation of British Industry have submitted their accounts? Is it not a fact that in all the world, the highest standards are maintained in this country by members of the CBI and of the TUC—in short, is this not something of which we ought to be proud?
Earl Ferrers: My Lords, I do not think that I would dissent from the majority of the views just expressed by the noble Lord, Lord Molloy.
Lord Murton of Lindisfarne: My Lords, as we understand that the maximum fine is £100, is it not rather extraordinary that this amount should be so small, bearing in mind that the total income of the unions is £270 million annually and that 12 million trade unionists are affected?
Earl Ferrers: My Lords, there are in this life all sorts of things which are extraordinary. Perhaps this is one of them.

US Weapons Development and Deployment
3.40 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 whether they will oppose the decisions of the United States Government to produce an enhanced radiation neutron warhead and to start a new chemical weapons production programme and whether they will make it clear to the United States Government that world opinion is against these policies.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): No, my Lords. The production of weapons which are to be held on United States territory is a matter for the United States Government.
Lord Jenkins of Putney: My Lords, is the noble Lord aware that the proposal is that these weapons shall be located in this country? Is he not concerned about that? Is he aware that the Labour Party has written to President Reagan saying that it opposes the decision of his Administration to produce the enhanced new neutron warhead and to start a new chemical weapons production programme? Is he further aware that the Labour Party goes on to say that a Labour Government would not permit the stationing of these weapons or of cruise missiles in Britain? Will he not follow the same course?
Lord Kinnaird: My Lords—
Several noble Lords: Order!
Lord Belstead: My Lords, no proposals for the deployment of either of these lots of weapons have

547
been made. So far as the views of the Labour Party are concerned, I hope that the Opposition Front Bench will not think that I am being discourteous when I say that it comes as a great relief to me that Labour Party views do not necessarily reflect world opinion.
Lord Kinnaird: My Lords, this Question compels me to ask my noble friend two questions. Firstly, what world, and whose opinion? Secondly, is not the using of your Lordships' House to repeatedly ask Questions of this nature either dangerously naive or bordering on the subversive?
Several noble Lords: Oh!
Lord Belstead: My Lords, my noble friend has, I think, every reason to ask the supplementary Question he has asked, because it is quite clear that the question was asked whilst labouring under a misapprehension. My first reply was that no proposals for deployment have been made. That was the answer to the first supplementary question which the noble Lord, Lord Jenkins of Putney, asked me and to which, presumably, he attached importance. Under those circumstances, it does mean that a Question of this nature is damaging if it is inaccurate—and it is inaccurate.
Lord Peart: My Lords, is not the noble Lord the Minister accepting a strange criterion? I believe my noble friend has every right to ask a Question of this kind. I disagree with him in many ways but he does have a perfect right, and there is a large section of the community which agrees with him, whether you like it or not. I am surprised at the noble Lord's answer.
Lord Belstead: My Lords, the noble Lord, Lord Peart, says that he is surprised at my answer, but the original Answer made it quite clear that the production of weapons which are to be held on United States territory is a matter for the United States Government. The noble Lord, Lord Jenkins, immediately asked a supplementary question which refuted that Answer. All I can do is to repeat what is the truth: at the moment there are no proposals for deployment of these weapons outside the United States.
Lord Avebury: My Lords, surely the truth is that production of these weapons by either the Soviet Union or the United States is a matter of genuine concern to many hundreds of millions of people all over the world. Is it not perfectly right that this country, and indeed all the allies of the United States, should be using their influence, now that the START talks have begun in Geneva, to try to obtain the maximum possible reduction of nuclear weapons on both sides?
Lord Belstead: My Lords, the START talks will not cover these particular weapons.
Lord Derwent: My Lords, if the noble Lord, Lord Jenkins, is entitled to ask the Question, which undoubtedly he is, whether one likes it or not, is there any reason why my noble friend the Minister should alter his original Answer?
Lord Belstead: My Lords, I am grateful to my noble friend. The reason why I take issue with the noble Lord, Lord Jenkins, and, with respect, the noble Lord, Lord Peart, is that the supplementary question to the original Question simply refuted the truth of what the Government said. I assure the House that what the Government said in their original Answer is at the moment the case.
Baroness Wootton of Abinger: My Lords, am I mistaken in thinking that there is an international convention relating to the production of chemical weapons—as distinct from the other kind, the neutron weapons?
Lord Belstead: My Lords, there is. The hope of the United Kingdom is that there will be a complete ban on chemical weapons, which we, of course, discarded 10 years ago. We put forward proposals for a draft convention in 1976, and now we have put forward proposals for verification—which is at the very heart of being able to ban—at the Geneva talks. I very much hope that we shall be able to make progress in this direction.
Lord Orr-Ewing: My Lords, is it not a fact that we unilaterally discarded chemical weapons 10 years ago? Far from that setting an example to be followed by the Soviet Union, they have multiplied many times the chemical weapons they now have on the eastern side of the Iron Curtain and all their exercises are conducted on the assumption that they will use chemical warfare weapons.
Lord Belstead: My Lords, I am grateful to my noble friend, because here again I think it is important to realise what the facts are. Yes, my noble friend is quite right in suggesting that we in the United Kingdom discarded chemical weapons some 10 years ago. So far as quantities are concerned, the Soviet Union has a huge quantity of up to 700,000 tonnes of chemical agent, really enough to sink Europe, far less to destroy it.
Lord Mayhew: My Lords, is not the noble Lord going a little far in saying that the production on a large scale of chemical weapons by the United States and the Soviet Union is simply a matter for those countries? Surely that is going too far. The British Government are, I hope, already playing an active part on this subject in the United Nations disarmament conference. Is the noble Lord really right to say that the production of any form of weapons, even though not for deployment outside the United States, is not a matter for her allies in NATO? Surely he is going too far.
Lord Belstead: My Lords, the first part of the noble Lord's supplementary question relates to why the United Kingdom six years ago put forward proposals for a ban on the production and the holding of chemical weapons. Because verification always lies at the heart of these matters, we have now put forward proposals for verification in the disarmament talks in Geneva. So far as our interest and concern in production, either in the Soviet Union or in the United States, is

549
concerned, I repeat that, contrary to what is being done by the Soviet Union, there are at the moment no proposals for deployment outside the United States of either of the weapons mentioned in Lord Jenkins' Question.
Lord Brockway: My Lords, will the Minister confirm that, at the Special Session on Disarmament of the United Nations now meeting in New York, proposals are being made for the prohibition of all new weapons of mass destruction, including the neutron bomb, as well as a proposal for a more comprehensive convention banning the use and production of chemical weapons? What is the attitude of Her Majesty's Government to those proposals now under consideration?
Lord Belstead: My Lords, I will reply to that head on. We are encouraged by the Soviet proposals that there should be international verification by means of on-site inspection, something which the Soviet Union has consistently refused to recognise over the years.
Viscount St. Davids: My Lords, is not napalm a chemical weapon? Have we not refused to use it ourselves? Can the noble Lord confirm that it was, in fact, used against us in the Falkland Islands?
Lord Belstead: My Lords, I think that the noble Viscount is touching on a different question. I think that napalm does not fall into the context of chemical weapons.
Lord Spens: My Lords, will the Minister agree that our unilateral abandonment of the production of chemical weapons, far from encouraging other nations to abandon them, in fact seems to have encouraged them to increase their manufacture?
Lord Belstead: My Lords, if that is the road we were to go down then I would agree with the noble Lord that that would be the result.
Earl Ferrers: My Lords, I think that it might be to the convenience of your Lordships' House if we moved on to the next Question.
Lord Jenkins of Putney: My Lords—
Several noble Lords: Order!
Earl Ferrers: My Lords, I thought I had sensed the mood of the House that we had had a fairly long run on this Question and that it might meet with the approval of the House if we moved on.
Lord Avebury: My Lords, why should the noble Lord not ask a second supplementary?
Earl Ferrers: My Lords, it is simply this, as the noble Lord, Lord Avebury, knows only too well: the way in which the House operates is by general consent. I think that we have been on this particular Question for some 12 minutes. I am only acting as Leader of your Lordships' House. If I am wrong, then of course I am perfectly happy to take a different view. However, I understood from the remarks which
550
were made both opposite and behind me that it was to the convenience of your Lordships to move on.
Lord Jenkins of Putney: My Lords—

The Wildlife and Countryside Act 1981
2.53 p.m.
Lord Melchett: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware of the severe damage that has been done to endangered plants, birds and other animals as a result of their failure to bring Part 1 of the Wildlife and Countryside Act 1981 into force.
The Earl of Avon: My Lords, my attention has been drawn to several instances of harm being done to wild animals and plants which will receive protection, or improved protection, when Part 1 is brought fully into operation. Her Majesty's Government deplore such acts. My right honourable friend the Secretary of State for the Environment is well aware of the situation and is hopeful that difficulties in the preparation of the related regulations will shortly be overcome so that the commencement orders can be made.
Lord Melchett: My Lords, I am grateful to the noble Earl for that reply. Are the Government aware that would-be falconers, in particular, appear to be stocking up in advance of Part 1 of the Act being brought into force; that 60 nests of peregrine falcons have been robbed either of eggs or young this spring, which affects 10 per cent. of the British population; and that it is particularly falconers who will be affected by the new procedures brought into force by Part 1 of the Act? When will these procedures be brought into force and when will the Government lay the commencement order?
The Earl of Avon: My Lords, I am indeed aware of —and the noble Lord has been kind enough to draw our attention to—the facts about the rare birds of prey. I agree that the preliminary figures are alarming. Such robberies are, of course, already illegal under the Protection of Birds Act 1954. When the registration and inspection provisions of the Wildlife and Countryside Act come into force, very careful and detailed checks will be made on the origins of immature birds to see whether they are captive bred or taken from the wild. As far as the laying of commencement orders is concerned, of course I cannot give any complete promise, but, as I said in my earlier Answer, we hope to have these done very soon.
Lord Craigton: My Lords, I should like to thank my noble friend for that answer. I should like to emphasise too—
Several noble Lords: Question!
Lord Craigton: My Lords, I should like to give my noble friend some information—
Several noble Lords: Question!
Lord Craigton: My Lords, is my noble friend aware that on 2nd June, Central Television showed a documentary about destroying bats in Redditch, that certain butterflies are being stockpiled against the time when it will be illegal to catch them, and that lizard orchids, which will be protected when the Bill comes into force, are being dug up and sold abroad? None of those things can be brought home to the public until the Act is in force. The matter is one of great urgency, and I hope that my noble friend will do something.
The Earl of Avon: My Lords, I appreciate my noble friend's concern and I am sure that the House will join with me in deploring any action of irresponsible people to use the Act as a convenient early warning as regards those creatures and plants they should now concentrate on collecting before it is too late. The unauthorised uprooting of wild flowers is already illegal, and I understand that the police have been informed in a case which has been given some publicity. Many wild creatures are also protected by current legislation. However, I know that my noble friend is particularly interested in bats and I am greatly encouraged that many responsible people are already coming forward to the Nature Conservancy Council for advice on the new Act, particularly on the protection of bats.
Lord Wynne-Jones: My Lords, is the noble Earl aware that Members of this House and, indeed, of the public at large, having seen the Act passed by Parliament, are deeply concerned about the failure to implement it by bringing the regulations into force? Will he bring the strongest pressure to bear upon the department concerned to ensure that these regulations are brought into force as quickly as possible, otherwise the purpose of the Act is being defeated every day?
The Earl of Avon: My Lords, I appreciate the noble Lord's concern and, whereas I do not think that perhaps my pressure may be of much use, I shall certainly bring his pressure to the attention of my right honourable friend.
Baroness David: My Lords, if there has been trouble about some particular sections of the Act, would it not be possible to implement certain sections? Is the noble Earl aware how upset the Botanical Society of the British Isles is about the news it is getting of plants being uprooted? The noble Lord, Lord Craigton, has just mentioned the lizard orchids, but there is other evidence. I know that some are protected already, but the increased fines should be implemented as soon as possible. Can the noble Earl do something to implement some parts of the Act at once, even if the whole lot cannot be implemented?
The Earl of Avon: My Lords, this has, indeed, been considered and, if we continue to have trouble with the two particular sections that are causing trouble at present, then we shall do what the noble Baroness has suggested.
Lord Melchett: My Lords, I should like to ask whether the Government have considered, as far as
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Part I of the Wildlife and Countryside Act is concerned, their decision to suspend the gassing of badgers, which I am sure will be very widely welcomed? Part I of the Wildlife and Countryside Act will increase the protection given to badgers, and are the Government aware that it is extremely important that that should be brought into force to discourage farmers from taking action on their own behalf in the light of the Government's decision? In view of the widespread concern, can the noble Earl at least give the House an assurance that the Wildlife and Countryside Act Part I commencement orders will be laid before the Summer Recess?
The Earl of Avon: My Lords, I gather that the question of the badgers is at the moment under consideration. So far as promising to do it before we actually rise for the Recess is concerned, I cannot do so, but I hope very much to have it done anyway before we come back again.

International Monetary System
2.59 p.m.
Lord Boothby: 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, given that it will be impossible to stop world inflation or bring about world economic recovery so long as international reserves remain inadequate, the value of gold continues to fall and money as such remains worthless, whether they will now take steps, in collaboration with the United States, Western Europe and the IMF, to restore a viable international monetary system, in which gold will once again play a constructive and orderly part.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, no.
Lord Boothby: My Lords, arising out of that very unsatisfactory Answer, may I ask the noble Lord whether Her Majesty's Government realise that the present world economic recession stems from the decision of the United States Government, when the Bretton Woods Agreement collapsed—as I predicted it would and the rejection of which I moved in another place—to demonetize the dollar which halved the French gold reserves, wiped out 4,200 million dollars of our own reserves and reduced the stock of international reserves from 600,000 million dollars to 300,000 million dollars? May I further ask whether they are aware that the only world statesman who foresaw this, and who consistently advocated a viable international monetary policy based on a gold exchange standard, was President De Gaulle? Finally, for how long do Her Majesty's Government mean to tag along, as their predecessors have done for the last 10 years—both Labour and Tory—in the wake of the economic policies of the United States Treasury and the Federal Reserve Board which border on insanity, and which have already brought deep recession and unemployment to the United States and which are now doing the same to Western Europe?
Lord Trefgarne: My Lords, I think that one needs to distinguish in one's mind between what may have been the merits or demerits of going off the gold standard many years ago and going back on it again now. Whatever may have been the position in former times, I think that the difficulties of going back to a fixed price for gold, for example, now are very formidable indeed and not to be lightly dismissed. There have recently been a number of inquiries into the possibility, not least one by the United States Gold Commission, which the noble Lord may have seen, and clearly the arguments are still very sharply against going back onto the gold standard.
Lord Harmar-Nicholls: My Lords, will my noble friend read the book that the noble Lord, Lord Boothby, wrote about 25 years ago? There may be some enlightening point in it which would be worth reviving.
Lord Trefgarne: My Lords, the noble Lord, Lord Boothby, is, of course, a great expert in these matters, and has consistently advanced the view which is reflected in his Question today. But I must say that circumstances in regard to the international monetary system are now very different indeed from those of 50 or even 25 years ago. I think that the new approach towards a multi-currency international reserves system is better.
Lord Cledwyn of Penrhos: My Lords, would the noble Lord agree that, in fact, the Bretton Woods conference succeeded in giving the Western world relative economic stability for a quarter of a century? Whatever the merits or demerits of the arguments advanced by the noble Lord, Lord Boothby—and I agree with many of his arguments—does the Minister not agree that it is now advisable, indeed imperative, for Her Majesty's Government to make the initiative in stimulating a similar international conference with a view to giving the Western world some element of stability, which it has certainly not enjoyed for the last few years and which it does not seem likely to enjoy over the next few?
Lord Trefgarne: My Lords, it is true that the Bretton Woods system served quite well, perhaps rather than very well, from 1944, when I think it was first established, to 1971 or thereabouts, when it was discontinued. The matter, of course, arises at conferences of every kind from time to time, as it did not least at the Versailles Summit quite recently, when the heads of state addressed their minds to this matter and made some reference to it in the communiqué. But the fact remains that circumstances have changed very much since 1944 and we need to move forward. I think that the approach of the IMF and the development of the special drawing rights—in other words, a general approach towards a multi-currency system of international reserves—is much better suited to the second half of the 20th century.
Lord Boothby: My Lords, perhaps the Minister will allow me to ask him one final, very brief question. It is simply this. The world can never get out of the recession in which it now is without a viable international monetary system of some kind. How
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does the noble Lord propose to get out of it in the absence of any international monetary system? We have none today.
Lord Trefgarne: My Lords, I do not think that it is in the gift of any single nation—even the United States—to take one single step that will lift us all out of the international recession. We need a steady and steadfast—if that is the right word—economic policy by all the major trading nations of the world, including the United States, the United Kingdom, France, Federal Germany and the rest, so that together we can improve the trading situation of the world. As regards the United Kingdom, that is what we are seeking to do.
Lord Boothby: My Lords, with what we have not got.

Business
Lord Denham: My Lords, it may be for the convenience of your Lordships if I announce that dinner will be available at the usual time this evening. The Committee stage of the Transport Bill will be adjourned at approximately 7 p.m. for a short period, and during that adjournment the Report stage of the Forfeiture Bill will be taken.

Transport Bill
3.4 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Bellwin.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 1 [Bus Company's powers of disposal]:
Lord Underhill Lord Underhill moved Amendment No. 1:
Page 2, line 9, at end insert—
("() In this section the term "subsidiaries" shall not apply to the National Express coach services.").
The noble Lord said: Clause 1 gives the National Bus Company powers to dispose of the whole or part of any subsidiary. This amendment seeks to provide that this power shall not apply to the National Express coach services. The Government have stated that one of their intentions is that this provision shall cover National Express. This is interference with a very successful public enterprise, and it is generally agreed that it has made very successful development from the provisions of the 1980 Act.
Although National Express is only 7 per cent. of the National Bus Company's operations, it is a very profitable part. From the 1981 report of the National Bus Company we see that the profit of the whole company before interest and taxation was £25.3 billion. Of that National Express contributed some £4 million. Ministers

555
have tried to minimise the importance of this and from time to time have said that it is small in relation to the turnover of some £618 million. If that is to be the comment, then I must say that we are relating profit to turnover and a more sound argument would be to relate National Express turnover to National Bus Company turnover.
However, the attitude has been also expressed on behalf of the Government that, if anything is capable of privatisation, it should leave the hands of the state. As regards the British Rail subsidiaries, it was argued that the subsidiaries had nothing whatever to do with British Rail; that cannot possibly be argued here. In this case bus and coach services are closely interrelated and integrated, as I shall show later in the course of my comments. The National Express contribution enables the bus company to maintain stage carriage services. It assists to maintain some services in rural areas and off-peak urban services, which might otherwise have to be curtailed or restricted. This is because of cross-subsidisation. Again, Ministers have attempted to decry the effects of the National Express contribution to cross-subsidisation. In actual fact, it is estimated that some 12 per cent. of the subsidisation of stage carriage services is helped as a result of the National Express contributions to the National Bus Company.
Mr. Kenneth Clarke, the then Under-Secretary of State, argued on 4th March during the Committee stage in the other place that express services do not come into the calculations of revenue support against the counties. That is not strictly correct. There is a specific allocation by the National Bus Company to its subsidiaries for the running of the express coach services, and if a subsidiary did not have a share of the National Express contributions, it would need to make that up from the county's transport supplementary grant, or it would have to cut services. Therefore, cross-subsidisation is an essential factor in public transport undertakings, which I think cannot be denied by anyone.
This closeness was made abundantly clear in paragraph 76 of the annual report of the National Bus Company for 1980, which says:
"They"—
referring to the National Express and the National Holiday services—
"are of particular importance because they make up a large share of the coach operations of the subsidiary companies and make a substantial contribution to overhead costs of the companies. Without these services the viability of some companies would be seriously impaired, requiring either larger revenue support to be provided by local authorities or major withdrawal of stage carriage operations".
That statement was made, of course, before the Government published the details of this present Bill.
The success of the National Express development has occurred because the National Bus Company is an integrated service. There was no need for it to establish separate depots; there was no need for it to establish separate booking offices. It had, of course, some 400 outlets for the sale of tickets. There was no necessity for it to establish separate maintenance and repair facilities. It already had those as part of its integrated service. The drivers and coaches of the National Bus Company can be used with considerable
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flexibility, part of the time on coach services and then, as required, part of the time on stage carriage services.
The position has been further exemplified by a statement made by the chairman of the company as recently as the publication of the 1981 annual report, when the chairman said:
"I have said on a number of occasions that National Bus Company is an integrated business and what might happen to one sector must necessarily have an impact upon the remainder. It must not be forgotten that National Express and National Holidays in 1981 contributed substantially to group net revenue and to the business of maintaining stage carriage passenger services."
Why is it that some competitors who endeavoured to enter the coaching business under the 1980 Act failed? I understand that, at the time when this matter was discussed at the Committee stage in the other place in February, of 19 which had commenced at that time only five remained. They failed because they had to set up all these separate offices, separate depots, whereas the National Bus Company had it all as part of their integrated business. The noble Lord, Lord Bellwin, at Second Reading on 17th June, at column 721, said:
"The Government accept that the 'National Express' and National Holidays' business are closely integrated with the provision of local stage carriage services, which is NBC's main business."
The National Bus Company is able to share its costs because of the very nature of its infrastructure.
I should like to question what would be the assets to be sold. Mrs. Chalker, Under-Secretary of State, on 11th March, at column 251, said:
"The express coach and holiday business have no legal entity at all. The coaches are mainly with the subsidiaries, and my information is that at the peak of the season over 1,500 vehicles are provided by the operating subsidiaries of National Bus Company, and only some 320 or so by the national travel companies of the National Bus Company."
What manpower will be transferred? Will that prevent flexibility, which must of course affect the existing stage services? Will other companies, other competitors, be able to come along and compete with the new National Express related company which the Government propose to establish? Surely the Government have to allow that in view of their arguments in favour of competition. Would it be possible for one of the operating subsidiaries of the National Bus Company itself to start express coach services should it so desire? Again I assume that the Government will not prevent that in view of their desire for the maximum of competition.
It must be kept in mind that neither National Express nor anyone else has the exclusive right to run coaches anywhere. Under the 1980 Act, there is deregulation for express services. Therefore, there can be no question of any disposal, that any particular routes will be transferred, because that will be against the deregulation of the 1980 Act.
Finally, unless a later amendment is carried, the Government appear to be pressing for a majority holding in all the disposal subsidiaries to be dealt with. Therefore, whatever may be the Government's intention, as a private company, the organisation to take over the National Express could change completely the intentions of the Government. There is no commercial reason at all for the transfer of the National Bus Company. It should be left where it is, part

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of the integrated service of the National Bus Company, and to help to maintain the most valuable stage carriage network which is so essential to the travelling public. I beg to move.
3.14 p.m.
Lord Bellwin: The noble Lord, Lord Underhill, is clearly seeking to make a case for removing NBC's National Express network from the ambit of this Bill. In the Government's view, that would be to miss a great opportunity. National Express has had very considerable success since this Government's Transport Act 1980 removed all licensing controls on express coach services. Passenger carryings in 1981 were 50 per cent. up on the previous year, and the financial performance of the business also improved, though by a lesser amount. I am glad to pay tribute to that success. It is surely a happy commentary on the results of the Act, although as I seem to recall that part of it was strongly opposed by noble Lords opposite.
The question facing us now is, how do we help NBC to build on that success? We need to bear in mind that National Express is, or ought to be, a fully commercial concern—I believe there is no difference between the parties in that respect. But, as we have heard, we also need to bear in mind that National Express currently makes a significant contribution to NBC's overall financial strength. I say significant, and indeed it is so. But we should not forget the relative figures: National Express accounted for less than 7 per cent. of NBC turnover in 1981, and although its contribution to long-run unavoidable costs was equivalent to about 20 per cent. of group working profit, it made only a modest profit of £318,000 on a fully allocated cost basis.
The Government believe that in the light of these considerations the right course is to allow National Express to build on its commercial success outside public sector financial constraints, while ensuring that NBC itself retains a significant financial and operational stake. Why should the taxpayer provide investment finance for this market-oriented enterprise when private investors could shoulder part of the burden?
Let us clearly understand the position. First, National Express is only a small part of NBC's total business. Second, the Government are not proposing to close it down but to allow it to expand outside public sector constraints. Third, NBC itself need be no worse off and could be better off after privatisation. Fourth, where operational links between express and state services make economic sense to both sides they will continue after privatisation.
The truth is that the Government's plans offer a major opportunity for developing a successful coach business in order to serve the market better. NBC would have an important share in that success, leaving them, in the Government's view, better off on balance than they are now. I am sure that the noble Lord, Lord Underhill, tabled this amendment to allow us an opportunity to discuss what is an important part of the proposals in this Bill. We have had this opportunity. The noble Lord has made his position clear. I am sure he knows the Government's position equally clearly. I hope in those circumstances he will withdraw this amendment and let us get on with the other parts of the Bill.
Lord Molloy: Is the noble Minister aware that what
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he has said with regard to the National Express Company, which still plays a vital role within the National Bus Company, is true? It is equally true, as he said, that the Bill introduced by the present Government some time ago seemed to improve the situation. It is of course remarkable that a Tory Government should go out of its way to help a publicly-owned industry. That is to be applauded.
The noble Minister spoke in terms of an increase in business of around 45 per cent. to 50 per cent., and we would all applaud this. We would applaud it irrespective of who is responsible. But now we come to the major issue at stake. What is at stake is that it is publicly owned. There are no private regiments, or private bits of the RAF. We would not stand for that. We would not expect them to increase their productivity by 50 per cent. by bombing, invading, or carrying on in a dastardly way somewhere, so the Government cannot have it all ways.
I am asking the noble Minister to consider this: here we have a part of the National Bus Company which is making good headway. We all know that if it makes good headway it is good for the country and it is good for the taxpayer. Equally, we know that those who invest their money will not be doing it primarily for the good of the nation, or that will not be the driving force behind what they are doing. The driving force will be for them to make money out of the National Express Company, built up by public funds, improved on by all in the name of the British public. The National Express Company is moving from success to success. I appeal to the Government to let it alone for a while, for it to prove itself. If we are found to be wrong in our submission, the Government in due course can explain that all we had expected had not transpired, and the clause can be introduced at that time.
Lord Teviot: I also find myself falling between two stools, between the amendment and my noble friend's answer. I appreciate the Minister's answer on economic and perhaps political grounds, but the National Bus Company has been going for many years and has built up the coaching side as an integral part of the business. My noble friend replies that the coaching side should be given over because it would be unfair for the taxpayer to have to subsidise industries which should be commercial concerns. Very well, but there are a few practical matters we should bear in mind. One is the availability of crews working unsocial hours. At present we are suffering unemployment and the amount of lost mileage due to lack of crews is very little compared with what it was a decade or two ago. We can look forward, we hope, to the future with a fuller employment situation, and then one of the first industries to suffer will be service industries such as this which involve working unsocial hours, as must be the case with buses. The coach industries, either private or public, will be all right; there will be plenty of people to work in those because a certain glamour attaches to them.
What worries me—again I fall between the two arguments—is that we shall again have the situation in which there will be a lack of people wishing to drive stage carriage vehicles for the use of people who use public transport for essential journeys. One can see

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that happening, and I hope my noble friend will refer to that, as he will be aware of my concern in the matter. I should also like to know whether, although the Bill gives powers only for National Express to be sold off, the National Bus Company would be allowed to start another coaching enterprise on their own. Is there anything in the Bill to prevent them from doing that?
Lord Bellwin: We are in many ways moving away from the basic reasons behind what is proposed in this part of the Bill. I hear what my noble friend Lord Teviot says, and he knows that whenever he speaks on practical matters, not only affecting those who drive and the vehicles involved, I want to know his views because of his expert knowledge. Nevertheless, we need to get hack to the basics on this, which brings us to the point made by the noble Lord, Lord Molloy, and it might help if I re-stated the position. The amendment ignores the fact that NBC would retain a significant shareholding; secondly, it ignores the potential for improving profitability which could come with wider access to investment capital; thirdly, it ignores the proceeds of sale which would flow to NBC as one of their sources of external finance; and fourthly, it ignores NBC's continued involvement at the operational level in supplying National Express with marginal capacity, engineering and maintenance services, all of which will be paid for at the proper commercial rate.
I understand exactly the point which the noble Lord, Lord Molloy, makes, but, in the end, I suppose we return to a philosophical difference of view, and that is not to discard what the noble Lord says, any more than what the noble Lord, Lord Underhill, says. The Government have taken the view that this is the best direction for them to go. They took the same view when we were talking about the 1980 Act—that we should open up the whole field; and I say that not to crow about the point, but because everyone is pleased if something happens for the national good, as Lord Molloy said, regardless of who brings it about. In the way in which that pointed us in a direction, it is not unreasonable to claim that we got that one right. I think we have this one right as well, for the reasons I have given, but only time will tell. One hopes there will be extra profitability; and if it is done through the private sector, so be it. At the end of the day we are most concerned to discover whether this is the best way to proceed. We believe it is, and that is why we take the view we do of the amendment.
Lord Mishcon: I have tried hard to follow the Minister's logic. I am usually able to do so, even if I find myself disagreeing with his principles. I do not find his logic on this occasion as strong as it usually is. If the Government were saying that NBC would retain a 51 per cent., controlling, interest in National Express coach services—if they were willing to say, "We give that undertaking to the Committee and the noble Lord, Lord Teviot"—I could follow that. I would then understand that the public is being asked—I am using the Minister's words—to shoulder the responsibility of finance, instead of it being left purely to the Government, and that as a result of that, financial
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policy would be controlled on behalf of the nation. One would then be able to see to it that employees were retained and old traditions, built up over the years, dealing with, for example, unsocial hours (I almost wondered whether we were going to get into a debate on flexible rostering, but thank goodness! we did not) were maintained, even in days, for which we all hope, of fuller employment.
We have no such assurance and the Minister's logic therefore falls to the ground. I am hoping that, possibly as a result of this debate and his own reasoning, the Minister will be forthcoming—I shall not anticipate the argument on Amendment No. 2—and will say, "In regard to National Express coach services, the intention of the Government (and we have no objection to writing this in the Bill) is that there will be control of them in future". In those circumstances, while I cannot speak for my noble friend Lord Underhill, I think that those responsible for the amendment would be prepared to think again. But if the Minister is not prepared to write that into the Bill, I am afraid that his speech, clear though it was, did not convince me and, I hope, will not convince the Committee.
Lord Bellwin: It will not be the first time I have failed to convince the noble Lord, Lord Mishcon, and I suspect it will not be the last. I am sorry he feels there is no logical basis for my argument. To me it seemed clear enough, and still does. I omitted to answer a point made by my noble friend Lord Teviot. It is part of the whole matter. The point about NBC setting up a new coach company was mentioned. There would be no legal restriction on that, but surely in effect that would mean that NBC would be cutting off its nose to spite its face. The Government's intention is that NBC should remain committed to National Express through the retention of a significant shareholding. Well—
Lord Mishcon: I hesitate to interrupt the noble Lord the Minister, and I am most grateful to him for allowing me to do so. In a matter so important as this will he please not leave hanging in the air vague terms such as "significant"? What does he mean by "significant"? Is it significant from the point of view of control, or of voting power, or is it significant for some other reason?
Lord Bellwin: If the noble Lord will allow me to say so, I would point that, as he rightly said, Amendment No. 2 takes up the whole matter of the percentages of shareholding, and I should prefer to deal with the question at that time. He asks, "What is significant"? It depends on different circumstances and different situations. In certain circumstances 1 per cent. can be very significant but the noble Lord knows, as others know, that in this instance that is not so. I do not want to go into detail at this stage. I am sorry if I do not satisfy the noble Lord on the point, but we shall be talking about it in a moment, and I should prefer to discuss it under Amendment No. 2. I am sorry that I cannot add much more. Clearly the noble Lord, Lord Underhill, knows that the Government are not in a position to accept the amendment, and I fear that I cannot go further than that.
Lord Teviot: Before the noble Lord, Lord Underhill, winds up, I should like to refer to one point which perhaps has not been mentioned. My noble friend has mentioned that NBC will have 51 per cent. Well, that is fine, but it should be stated that at the moment very good arrangements are working between NBC and private companies. For instance, Eastern National and Eastern Counties have an arrangement with, I believe, George Ewer (Grey Green), and with the West Midlands and three other companies. They all work very well at the moment. Perhaps one is not thinking as widely as one might, but one cannot yet see the point of what is proposed. I shall not vote against the Government, but I shall not be able to vote with them if the matter goes to a Division.
Lord Underhill: I am very sorry that the noble Lord the Minister has not replied to the question of my noble friend Lord Mishcon about the 51 per cent. Obviously, that is a point which is worrying the noble Lord, Lord Teviot. This is a very important question, and we shall be dealing with it in Amendment No. 2. This question will have considerable effect on what the Minister, speaking on behalf of the Government, referred to as the great opportunity that we might miss if we do not agree with the Government's proposals to transfer National Express from the National Bus Company. The Minister referred to the 1980 Act, but our most important questions regarding the Act were about the possible effect on stage carriage services. Whatever else has happened, following the 1980 Act and deregulation, to help National Express coaches, certainly there has been no improvement in terms of the great mass of private operators wishing to go into the stage carriage services. That simply has not happened. The Minister has not answered the quite clear statements that were made about the integrated nature of NBC, including the National Express coach services. I was pleased that the noble Lord, Lord Teviot, from his practical experience, was able to join in the discussion on this question, because the flexible use of coaches and crews is a vital part of the integrated nature of the National Bus Company.
I questioned what would be the assets to be sold. We should not talk about the sale of depots and maintenance and repair facilities, because the National Bus Company will still want them for the stage carriage services. Moreover, under Clause 4 the National Bus Company will be able to provide for firms such as the National Express, when it is sold off, to have facilities at the National Bus Company's own properties. Therefore, there is no question of any money coming from the sale of assets; it could come only from a commercial arrangement for the use of existing facilities.
If the Government's intention is to help the development of the National Bus Company, I submit that in fact it will not be helped because of the taking away of an integrated part of 'the NBC. I ask the question: why are the Government restricting disposal to National Express and National Holidays and their properties? The Government are not lifting one finger to help the development of the essential stage carriage services of the National Bus Company through its operating companies. That will
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be left to be dealt with by the transport supplementary grant through assistance from the counties.
There is no commercial consideration here—not political, but commercial. This lack of commercial consideration cannot possibly help the development of the coach services or the integrated nature of the bus company. What the Government propose will hinder and harm the present integrated nature of the National Bus Company's services. There will also be an effect, or the possibility of an effect, on the operating subsidiaries as well as on the stage carriage services. For all those reasons I must ask the Committee to divide on this important issue.
3.36 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 37; Not-Contents, 94.

DIVISION NO. 1

CONTENTS

Ardwick, L.

Lovell-Davis, L.

Bishopston, L.

Melchett, L.

Blyton, L.

Mishcon, L.

Boston of Faversham, L.

Molloy, L.

Brockway, L.

Oram, L.

Cledwyn of Penrhos, L.

Peart, L.

Collison, L.

Phillips, B.

Cooper of Stockton Heath, L.

Ponsonby of Shulbrede, L.—[Teller.]

David, B.—[Teller.]

Denington, B.

Stewart of Alvechurch, B.

Ewart-Biggs, B.

Stewart of Fulham, L.

Gaitskell, B.

Stone, L.

Gosford, E.

Strabolgi, L.

Hall, V.

Strauss, L.

Irving of Dartford, L.

Taylor of Mansfield, L.

Jenkins of Putney, L.

Underhill, L.

Leatherland, L.

Wells-Pestell, L.

Listowel, E.

Wootton of Abinger, B.

Llewelyn-Davies of Hastoe, B.

Wynne-Jones, L.

NOT-CONTENTS

Ailesbury, M.

Energlyn, L.

Airedale, L.

Ferrers, E.

Ampthill, L.

Fortescue, E.

Avebury, L.

Fraser of Kilmorack, L.

Avon, E.

Gainford, L.

Aylestone, L.

Gladwyn, L.

Balfour of lnchrye, L.

Glasgow, E.

Banks, L.

Glenarthur, L.

Barrington, V.

Glenkinglas, L.

Belhaven and Stenton, L.

Gormanston, V.

Bellwin, L.

Gowrie, E.

Belstead, L.

Gray, L.

Bessborough, E.

Grey, E.

Boyd-Carpenter, L.

Gridley, L.

Buckinghamshire, E.

Hailsham of Saint Marylebone, L.

Burton of Coventry, B.

Byers, L.

Hampton, L.

Campbell of Alloway, L.

Harmar-Nicholls, L.

Campbell of Croy, L.

Home of the Hirsel, L.

Clancarty, E.

Hylton-Foster, B.

Cottesloe, L.

Kennet, L.

Cullen of Ashbourne, L.

Kilmarnock, L.

Daventry, V.

Kinnaird, L.

Davidson, V.

Lane-Fox, B.

Denham, L.—[Teller.]

Lloyd of Kilgerran, L.

Dilhorne, V.

Long, V.

Duncan-Sandys, L.

Lucas of Chilworth, L.

Effingham, E.

Lyell, L.

Ellenborough, L.

McFadzean, L.

Elliot of Harwood, B.

Mackay of Clashfern, L.

Elton, L.

Macleod of Borve, B.

563

Mais, L.

Sandys, L.—[Teller.]

Marley, L.

Seear, B.

Merrivale, L.

Selkirk, E.

Mersey, V.

Sharples, B.

Mottistone, L.

Skelmersdale, L.

Mountgarret, V.

Spens, L.

Murton of Lindisfarne, L.

Tanlaw, L.

Newall, L.

Trefgarne, L.

Nugent of Guildford, L.

Trenchard, V.

Onslow, E.

Trumpington, B.

Orr-Ewing, L.

Vaizey, L.

Perth, E.

Vaux of Harrowden, L.

Porritt, L.

Vivian, L.

Portland, D.

Ward of Witley, V.

Reigate, L.

Wigoder, L.

Sainsbury, L.

Young, B.

St. Davids, V.

Resolved in the negative, and amendment disagreed to accordingly.
3.44 p.m.
Lord Underhill Lord Underhill moved Amendment No. 2:
Page 2, line 9, at end insert—
("() In exercising their powers under subsection (1) above the Bus Company shall retain at least a 51 per cent. holding in any of their subsidiaries.").
The noble Lord said: In this amendment we are considering not just the position of National Express or National Holidays, but any part of the National Bus Company, because Clause l provides for the disposal of the whole or any part of any subsidiary of the company. Therefore, while this matter is of importance, particularly in relation to the regrettable decision the Committee has just reached, it affects not only the National Express but any part of any subsidiary of the company.
The National Bus Company may dispose of the whole or any part of its present business, and under Clause 3, which we shall deal with later, the National Bus Company could be directed by the Secretary of State to dispose of any part of its business. That could be the profitable part of a stage carriage operating subsidiary. The amendment seeks to ensure that on any disposal the National Bus Company shall retain a majority holding; that is, at least 51 per cent. And if all the things that we wish to safeguard are to be safeguarded—for instance, in National Express, as per our previous debate—then a majority holding is essential.
Ministers have spoken of the access to private finance, but they have not said a great deal about disposing of majority control. I would suggest that these are two completely different things. Ministers have said that the NCB will retain a substantial stake. Even during the last debate the noble Lord, Lord Bellwin, would not say what was "a substantial stake." I am certain it would have affected the decision of my noble friend Lord Mishcon and 1, in not pressing to a Division, if we had thought the bus company was going to retain a majority shareholding, so that it could have some considerable effect on the course of events.
In our view it is essential that control continues to rest with the National Bus Company. Answers by Ministers have been that if 51 per cent. is retained then it will continue as a nationalised industry. Noble Lords will recall that in debates on the previous Transport Bill we were told that even if there was a
564
40 per cent. holding, or even only a 30 per cent. holding, by the publicly-owned undertaking in any new undertaking, it could still be dealt with as if it was in the control of a nationalised industry because of the nature of the allocation of the shares.
Without National Bus Company control the entire nature of a subsidiary could be changed. It could be that there were no directors as such from the National Bus Company on the board of directors, because my understanding is that as a private company the company itself would decide on who it would appoint as directors. It could be that there would be no opportunity for the direct views of the NCB to be put at directors' meetings because there may be no NBC directors on the board of the new company. Yet we are talking about an important public transport undertaking which may not be just National Express, may not be just National Holidays, may not be just properties; it could be any part of a stage carriage subsidiary of the National Bus Company.
There will be unfettered rights to the private company—unfettered rights to run its own business. That, I believe, is one of the big elements of a private company. In the case of a disposal of the whole or part of a stage carriage subsidiary, we could find unprofitable routes being cut out or restrictions on some of the service routes, because obviously the purpose of a private company is to make a profit, not to run social transport, and a great deal of the operating stage carriage services must of course be in the social transport area.
In order to safeguard the future development of this transport undertaking it is essential, in our view, that a 51 per cent. holding be retained, and I hope the Minister will agree to this amendment. I beg to move.
Lord Bellwin: If an NBC subsidiary is to escape the constraints of the public sector and attract genuine risk capital, then the bus company must relinquish effective control. This was made clear during our Second Reading debate. The amendment we are considering would prevent NBC disposing of more than 49 per cent. of its interest in a subsidiary. The bus company would therefore retain effective control, and the whole purpose of the Government's policy would be defeated. None of the advantages of access to private finance would be available to the business.
We envisage NBC retaining a significant (and I shall come back to that word in a moment) minority interest in a subsidiary in which private capital is invested. This interest would provide the company with a continued source of income over and above that from the initial sale of shares. It is not possible to specify now the exact level of NCB's retained interest, and let me try to explain why. This will depend on the particular circumstances of the disposition of the shareholding and, of course, on City advice at the time of sale. Before allowing access to private finance we should, however, wish to be satisfied that effective control lay in private hands.
The noble Lord, Lord Mishcon, pressed me to give a firmer definition of "significant". If I were to give a complete answer I would need to be a lexicographer, I think, and not a politician. But the essential is, as I have tried to explain, control. The new National

565
Express will have to be under private control if we are to accept that its finances are genuinely outside the scope of an implied public sector control. To comply with this condition, NBC shares will have to be less than 50 per cent.—and how much less, I cannot say; it will depend on the make-up of the remaining shareholding; and 49 per cent. could be a non-controlling interest if all other shares are in a single pair of hands. It could be a controlling interest if there are several other shareholders.
I hope that gives some explanation of why I am reluctant to be more categorical in trying to define "significant". It is something which moves in the context of the particular matter being discussed at the time. I am sorry to sound vague but I think it is not unreasonable to say that a "significant" shareholding depends very much on how many, in whose hands, and what is the situation applying at the time. As with the first amendment, we come back to a fundamental difference between us on whether this National Express should be within or without NBC. If there is 51 per cent. there, it would stay within; not without. It comes down to a difference between us. I am sorry I cannot be more helpful with the amendment.
Lord Mishcon: The noble Lord the Minister is quite entitled to put forward an argument that control should go into private hands and out of NBC. It is a perfectly proper and clear argument to put politically. You either hold that view or you do not. There is no point in wasting a lot of time in Committee stage debating that issue. I do not propose to weary your Lordships by conducting any such argument. There is, however, another argument which says that it may well be that control ought to go out, and therefore the Committee ought not to agree with an amendment which proposes that 51 per cent. be retained by NBC in the case of any of its subsidiaries. But on both sides of the Committee, indeed in all parts of the Committee—although I look at the Cross-Benches and find I am looking merely at benches, so that perhaps I should limit myself to speaking of both sides of the Committee—the view is that control ought to be in private hands but there ought to be residual rights always vested in NBC in order that certain situations can be controlled. If your Lordships had heard from the noble Lord the Minister a rather more cogent definition of "significant" this would not have required him to be a lexicographer at all but would merely require him (and I say this with affection) to be a frank politician, and that is all; and that is all that we ask for.
What I mean is this. The possibility of shares going into wrong hands is not something that one can control on an original transaction, because on the original transaction the shares can go into very proper hands. It is a question of what happens thereafter. Your Lordships will remember that in the Oil and Gas (Enterprise) Bill, for example, we were dealing with an important matter from the point of view of the nation; but there was always a provision written in that there should be, until the Secretary of State otherwise decided, the holding of a special share which stopped the transfer of shares in undesirable circumstances.
No such protection is given to vital transport interests that we are dealing with in this Bill. It is a matter
566
of company law (with which I am sure your Lordships will be quite familiar) that if you manage to hold 75 per cent. of voting control you can actually put the company into liquidation and sell off vital assets; and it may well be that from a pecuniary point of view, from the material point of view, that is a very profitable thing for shareholders to do. It is not a profitable thing for the nation to do. Unless one retains more than 25 per cent. of the shares, one cannot stop a liquidation. If one controls more than 75 per cent. one could alter the whole structure of the constitution of a company, which is in its memorandum and articles of association.
The Committee is left in this position. The Minister is not prepared to say what percentage will be retained in the national interest. He uses the word "significant", and he realises that it means nothing when you say "significant" in regard to each set of circumstances. That is a reply that, if I may say so, means nothing. We are dealing now with an important Bill and an important clause of the Bill. The Minister should be prepared to say that "significant" at least means that one is going to have some sort of control. I have gone away from directors; my noble friend Lord Underhill made that point and I do not want to repeat it.
If you take the view that the nation should have no control on the question of liquidation, no control in regard to altering the articles of association, no control by having a clause inserted in the articles that at least the nation will keep such a share as will prevent other shares going into wrong hands; if you continue with that, you will vote against the amendment. If you want to retain the principle even though the amendment talks in terms of 51 per cent., then in my judgment you will vote for the amendment.
Lord Lucas of Chilworth: Can the noble Lord, Lord Mishcon, help me in this? If one accepts his amendment, one would (as the Minister explained) restrict the company from doing some of the things it wants to do. One would also go against the general philosophy outlined in this Part of the Bill. If one accepted the amendment, one would also restrict some of the opportunities that might arise for the bus company. I think it would be wrong to do that at this stage. In some of our very big cities, there are some suggestions that the social service aspect of bus operations should fall back to them. There are other suggestions from such as Sir Peter Masefield, that it should move to something of a regional set-up. If one accepts the amendment, one would not be able to do this at all. Then, I think one would negative what we are trying to do: that is, to create greater opportunities for decentralised authority so that private enterprise, private money, can come in as and where it wants—and it will not come in if it has not got control.
It would at the same time draw attention to the need for those local authorities who see a social need to make such provision as they are able to because currently, as the noble Lord, Lord Underhill, has suggested, it is the cross-subsidisation alone that keeps some of the social services operating. That subsidisation is necessary because a great number of the local

567
authorities say, "We are not going to put our hands in our pockets; we are going to spend our money on schools or something else". This is a burden which I do not think that the bus company should necessarily carry. You will force them into carrying that burden if you insist on the amendment.
Lord Lloyd of Kilgerran: May I say that of course agree with the noble Lord, Lord Mishcon, when he says that it would be a waste of time to enter into any political debate on this matter. I should like to pursue with him, if I may, the theme that he developed that control ought to go out of the hands of NBC. He pursued that theme very fairly and frankly with his usual persuasiveness. Then he comes to the general theme. The general proposition he puts to us is that his basic reason for this amendment, and for his general attitude in supporting this amendment, is that there is a possibility of shares going into wrong hands.
I agree with him about the 25 per cent. position, about the effect if you do not retain more than 25 per cent. of the shareholding, because then certain matters follow in accordance with company law. What I find difficult to appreciate in the context of this Bill and what the Government are trying to do—and I approach this in an entirely pragmatic way—are the problems that the noble Lord, Lord Mishcon, sees. What does he mean in practice about the shares getting into wrong hands in the context of this matter? I understand that the Government are to retain a significant number of shares and I agree that the Government are unlikely to disclose the figure that they have in mind, if they have one in mind. What I feel the noble Lord fails to do in his persuasive submissions to this Committee is explain the real problem that he is trying to prevent taking place. What are the wrong hands which he anticipates may be involved if the Government do not relinquish the control of NBC as suggested?
Lord Mishcon: I have been asked a question—with the customary courtesy of the noble Lord, Lord Lloyd—and therefore I ought to answer it. It is not unknown in commercial circles—and the noble Lord has mixed in them with great advantage to those commercial circles —for a company to be acquired in order to stifle competition. I give but one example. It is not unknown that shareholders come into a company dealing with transport in the hope of making very large gains and as a result of it possibly putting prices up in a way which is not suitable for a company in which the nation holds shares. It could very well be that shareholders have the desire when getting into a company—and I mention this example—to see that its assets are sold because a quick profit could be made as a result, although that is not in the national interest. I do not think that I need go any further with examples, but I could do so.
Lord Bellwin: My Lords, the Secretary of State's consent is required to the initial disposal of shares, and to control subsequent transactions surely would be an unwarranted interference. The fact is that the Secretary of State will always have control over any further disposals by NBC. That is a safeguard. I want to be helpful in this matter. If I were pressed to say and
568
give an indication, then clearly it would mean less than 51 per cent. It would probably—but not essentially—be more than 20 per cent. The point that the noble Lord, Lord Mishcon, makes is understood as well.
It is still right to come back to the first point, that when we talk about significance it can mean so many different things in so many different situations. I suspect that the noble Lord, Lord Mishcon, knows this as well or better than anyone in the Committee, with his great experience in working in the company field. There, as he knows, anyone who owned, say 5 per cent. of ICI would have a very substantial holding. Five per cent. of another company would not mean anything like the same holding. That is why it is so difficult to be precise.
Lord Teviot: I am afraid I am not very much up into financial affairs. I should like an assurance from my noble friend. Regarding the 51 per cent., or whatever it was—and that has rather come out in the light of debate—it is a fact that no commercial concern in the foreseeable future is going to put a lot of money into the declining industry of stage carriage. Unfortunately, this country, unlike most of Europe—apart from one or two countries still has a declining number of people using public transport. The only people who are going to put money into public transport are those who think they can make a quick "buck" on coach services.
Moving on from that, is my noble friend able to give me an assurance that we are not going to see a situation whereby control has gone from the National Bus Company and somebody is going to make quite a lot of money on coach services? The local authorities are going to get bored with subsidising routes and the poor, wretched public are going to be standing at bus stops, either in urban areas or down the lanes of rural areas, and are not going to have an adequate bus service. I wish my noble friend could give me an absolute assurance that that kind of horrible situation will not happen.
Lord Bellwin: I do not think that the two situations go hand in hand at all. The unhappy scenario that my noble friend paints for us is a situation tied up entirely with many, many other facets of this whole area of public transport: the local authorities' obligations; the extent to which there should be subsidy or not; how much the ratepayer contributes; how much the taxpayer contributes; what is the philosophy of public versus private cars, and so on? It is a problem that he rightly raises but, so far as I can see, it is not the one that we are discussing in dealing with this amendment. On that, we come back to the basic philosophy: either one agrees that there should be private control of this sector or not. The Government clearly do and noble Lords opposite clearly think otherwise.
Lord Underhill: The noble Lord, Lord Teviot, put some very pertinent points which are the most important points for supporting the amendment before the Committee. Although the Minister, as usual was very persuasive in his argument, frankly he in effect admitted the case. There is no answer to the point made by the noble Lord, Lord Teviot, once you say that the whole control of any subsidiary will pass

569
from the public sector into a private company over which the National Bus Company will not have continued effective control at all. That will mean that nobody will put money—as has been said by the noble Lord, Lord Teviot into a private transport undertaking merely to help social transport. They will put it in because they want to get some returns. They want to get profit.
Therefore, if it is a question of continuing with unprofitable routes, we know what is going to happen. We shall come to this issue on another amendment, and if it is a question of impairing the transport for the travelling public or making a loss, we know what a private transport undertaking will do. We are not attacking private capital but in this respect we are talking common sense about the issue.
The noble Lord, Lord Lucas, said that the Government are seeking to have decentralisation. If they sell the National Express as a complete undertaking—and I come back to my question: what are they going to sell in the case of National Express? What are the assets they are going to sell?—because 1 do not know—then that is not decentralisation. I have expressed a fear, and noble Lords on this side have also expressed a fear. Although the Government have said that their present intention is to confine disposals to National Express, National Holidays and the properties, the fact is that the powers of disposal could enable this Government, or any future Government, to dispose of any of the operating subsidiaries. That could happen and it is in the Bill. If there is no control continued by the National Bus Company, then it is clear that there will be an impairment of service to the travelling public. That is why it is so essential to maintain the majority control not from political philisophy, but for the welfare of the travelling public. It is such an important principle that, even on this issue, we must also ask the Committee to make its views quite clear in a Division.
4.11 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 43; Not-Contents, 93.

DIVISION NO. 2

CONTENTS

Ardwick, L.

Listowel, E.

Balogh, L.

Llewelyn-Davies of Hastoe, B.—[Teller.]

Birk, B.

Bishopston, L.

Lovell-Davis, L.

Blyton, L.

Melchett, L.

Boston of Faversham, L.

Mishcon, L.

Brockway, L.

Molloy, L.

Cledwyn of Penrhos, L.

Oram, L.

Collison, L.

Peart, L.

Cooper of Stockton Heath, L.

Phillips, B.

Ponsonby of Shulbrede, L.—[Teller.]

David, B.

Denington, B.

Rhodes, L.

Elwyn-Jones, L.

Stewart of Alvechurch, B.

Ewart-Biggs, B.

Stewart of Fulham, L.

Gaitskell, B.

Stone, L.

George-Brown, L.

Strabolgi, L.

Gosford, E.

Strauss, L.

Hall, V.

Taylor of Mansfield, L.

Howie of Troon, L.

Underhill, L.

Irving of Dartford, L.

Wells-Pestell, L.

Jenkins of Putney, L.

Wootton of Abinger, B.

Leatherland, L.

Wynne-Jones, L.

570

NOT-CONTENTS

Airedale, L.

Howe, E.

Auckland, L.

Hylton-Foster, B.

Avon, E.

Kennet, L.

Aylestone, L.

Kilmarnock, L.

Balfour of Inchrye, L.

Kinnaird L.

Banks, L.

Lane-Fox, B.

Barrington, V.

Lloyd of Kilgerran, L.

Belhaven and Stenton, L.

Long, V.

Bellwin, L.

Lucas of Chilworth, L.

Belstead, L.

Lyell, L.

Bessborough E.

McFadzean, L.

Boardman L.

Mackay of Clashfern, L.

Burton of Coventry, B.

Marley, L.

Byers, L.

Merrivale, L.

Campbell of Alloway, L.

Mersey, V.

Campbell of Croy, L.

Mottistone, L.

Cottesloe, L.

Mountgarret, V.

Croft, L.

Murton of Lindisfarne, L.

Cullen of Ashbourne, L.

Newall, L.

Daventry, V.

Nugent of Guildford, L.

Davidson, V.

Onslow, E.

De Freyne, L.

Orr-Ewing, L.

Denham, L.—[Teller.]

Portland, D.

Dilhorne, V.

Rankeillour, L.

Donaldson of Kingsbridge, L.

Reigate, L.

Roberthall, L.

Eccles, V.

Sainsbury, L.

Ellenborough, L.

St. Davids, V.

Elliot of Harwood, B.

Sandford, L.

Energlyn, L.

Sandys, L.—[Teller.]

Ferrers, E.

Seear, B.

Fortescue, E.

Selkirk, E.

Fraser of Kilmorack, L.

Sempill, Ly.

Gainford, L.

Sharples, B

Gardner of Parkes, B.

Skelmersdale, L.

Gladwyn, L.

Spens, L.

Glasgow, E.

Stamp, L.

Glenarthur, L.

Tanlaw, L.

Glenkinglas, L.

Trefgarne, L.

Gormanston, V.

Trenchard, V.

Gowrie, E.

Trumpington, B.

Gray, L.

Vaizey, L.

Gridley, L.

Vaux of Harrowden, L.

Grimston of Westbury, L.

Vivian, L.

Hailsham of Saint Marylebone, L.

Ward of Witley, V.

Wigoder, L.

Hampton, L.

Young, B.

Home of the Hirsel, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.19 p.m.
Lord Underhill Lord Underhill moved Amendment No. 3:
Page 2, line 11, leave out ("(1)(a)") and insert ("(1)").
The noble Lord said: The purpose of this amendment is to provide that all disposals made under paragraphs (a) and (b) will require the consent of the Secretary of State. Although we consider that the Bill gives far too many arbitrary powers to the Secretary of State, it must be consistent, any disposal must be able to be challenged and there must be some degree of parliamentary accountability.
Subsection (1)(a) provides that disposal of,
"any shares in or other securities of one of their subsidiaries",
will require the consent of the Secretary of State. Subsection (1)(b) provides that disposal of,
"the whole or any part of the undertaking of, or any property, rights or liabilities of, any of their subsidiaries",
will not require the consent of the Secretary of State. As the Government intend that the National Bus Company will not retain a majority shareholding, as

571
has been confirmed by the Committee on our last amendment, then, presumably, if under subsection (1)(a) the company for various reasons wish to sell only a minority of shares, the Secretary of State will refuse consent. But if the National Bus Company wish to sell outright any subsidiary, without a sale of shares as such, that will come under subsection (1)(b), and the Secretary of State's consent will not be necessary. Put another way, disposal of an entire subsidiary under subsection (1)(b) does not require consent, but the sale of any shares under subsection (1)(a) does.
We must think in this matter not only of National Express, National Holidays or the properties, but of the powers to dispose of the whole or part of any subsidiary. If the National Bus Company wish to sell a bus station entirely, then, presumally, it will have a separate company and no consent will be required, even though it may not be in keeping with the wishes of the Secretary of State. It could also sell without consent an entire stage carriage subsidiary—not by selling shares but by selling the entire undertaking. There could be a situation in which disposal of shares in a subsidiary may be in mind but the National Bus Company may not like the conditions which the Secretary of State suggests he will impose. So it could decide to dispose of the whole or part, without shares, under subsection (1)(b), without consent.
It may be said that what we are suggesting is foolish and that these things could not be done, but there is provision for it in the Bill and obviously we must go only by what the Bill provides. The Under-Secretary, Mr. Clarke, said that it would be absolutely silly to require the bus company to seek consent just to dispose of a few buses. That would be silly, I agree, but that is not what we are talking about. Under subsection (1)(b) there are powers to dispose of the whole or part of any subsidiary without the consent of the Secretary of State being required. Therefore we should not reduce this just to talk of selling the odd two or three buses here and there. If that is the issue which is worrying the Government, we should readily withdraw our amendment so that the Government could come back at Report with an amendment to deal with the real issue of disposal and not with the getting rid of the odd two or three buses here and there. Under Clause 3(1) the Secretary of State is to be given power to direct the company to exercise its power of disposal under both subsection (1)(a) and subsection (1)(b)—that is, where there is a disposal of shares or a disposal of a whole undertaking—yet, if the National Bus Company proposes to use its own power of disposal under subsection (1)(b) without the Secretary of State's direction under Clause 3, it seems to us that consent is not required.
If my reading of the Bill is incorrect, I shall readily acknowledge it, but, having read the whole of the Committee stage—all 27 sessions—in the other place I know the arguments which were put forward. This seems to be an inconsistency which ought to be removed. If the Government are merely concerned with having to worry about consent for the odd items, I hope that they will suggest their own amendment so that we need not press this one I beg to move.
Lord Bellwin: This amendment seeks to extend the requirement for the Secretary of State's consent to
572
disposals of assets under subsection (1)(b) as well as to the sale of shares under subsection (1)(a). There is a good reason for confining the consent provision to subsection (1)(a). The National Bus Company may already dispose of those parts of its subsidiaries' undertakings which are no longer required for the business—for example, old buses, or land, or buildings surplus to operational needs. Such disposals are the subject of day-to-day management decisions in which the Secretary of State is not involved. The power under which such disposals are carried out is conferred by Section 14(1)(e) of the Transport Act 1962, applied to the National Bus Company by Section 47(1)(a)(iv) of the Transport Act 1968. We do not wish to interfere in any way with the National Bus Company's existing power of disposal where parts of a subsidiary's undertaking are no longer required for the purpose of the business. But extending the power of consent as proposed in the amendment would do just that. It could give rise to an area of doubt as to whether the National Bus Company was carrying out a particular disposal by virtue of the power conferred by the 1962 Act or the power conferred by subsection (1)(b) of this Bill. The National Bus Company might well feel obliged, for the avoidance of such doubt, to ask for approval for each and every disposal. We could end up in the thoroughly unsatisfactory situation of Ministers being involved quite unnecessarily in detailed management decisions.
I do not think that the kind of situation which the noble Lord, Lord Underhill, envisages is a credible proposition. There would have to be some really exceptional circumstances for the National Bus Company board to wish to dispose of the complete undertaking—say, for example, of one of its regional operating subsidiaries—without getting any shares. I am sure that the kind of circumstances which the noble Lord has outlined to us and which concern him would be—surely this is the key to it—the subject of consultations with the Secretary of State before a final decision was taken one way or the other.
I really do not think that the concern which the noble Lord has expressed need worry him as much as it does. The undertakings of the National Bus Company are subsidiaries and, as such, they are Companies Act companies. It is not possible to sell a company without selling the shares in it, so it is difficult to see how the National Bus Company could dispose of an entire undertaking without consent. For these reasons we feel unable to accept the amendment.
Lord Mishcon: I hope I heard the noble Lord the Minister aright when he guided the Committee along the lines that if you sell all the assets of an undertaking, of necessity you sell the shares and, in such an event, will have to obtain the permission of the Secretary of State. I did not think I could have heard him aright, although the noble Lord the Minister nods his head in assent, which means that I ought now to believe that I did hear him aright. And, having believed that I did hear him aright, I find myself unable to believe the advice he has received. It is quite possible to sell the goodwill of a business as part of the undertaking. It is quite possible to sell the assets of a business without selling any shares at all, Indeed, the average alternative facing a commercial enterprise which is for disposal

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is that either you sell some of the assets or all of the assets, or you decide to sell the shares and somebody takes over the whole of the company. Therefore, I should be obliged if the noble Lord the Minister would, with his advisers, think again about that statement.
Lord Bellwin: I must have been nodding my head in the wrong place. Perhaps it would help if I repeated what I said in order to clarify the point which the noble Lord mentions. I said that the National Bus Company's undertakings are subsidiaries and, as such, are Companies Act companies. I said it is not possible to sell a company without selling the shares in it. So it is difficult to see how the National Bus Company could dispose of an entire undertaking without consent. But of course one can always sell assets and one can always sell parts. That, clearly, I know.
Lord Mishcon: I do not think the Committee will be very patient with me if I continue this argument for much longer. Of course it is possible to sell an undertaking, or all the assets, without selling shares. What I am saying is that if one does do that, it comes within paragraph (b) and not within paragraph (a). That proposition is either right or wrong. If it is wrong, then I will apologise to the Committee hereafter. If it is right, I expect the noble Lord, Lord Bellwin, to withdraw the statement he has made.
I will detain the Committee only very briefly because I do not want to repeat arguments that have been put forward so ably by my noble friend Lord Underhill. I would like to add only this. If the noble Lord the Minister is saying to the Committee that it is quite ridiculous—and this was the point taken in another place at Committee stage—to think in terms of the National Bus Company having to seek the permission of the Secretary of State when it was merely selling a few of its assets, which for all one knows it might be doing week by week or month by month, then I would go along with that argument. But we are dealing with a clause concerned with the whole of an undertaking or part of it, and it is a little odd that, presumably, the National Bus Company will not be able to sell one of its shares in any subsidiary—just one—without going to the Secretary of State, but yet could sell the whole of an undertaking of a subsidiary without going anywhere near the Secretary of State.
In endeavouring to borrow the inimitable language of the Minister, I will suggest to him that if he will undertake to look at an amendment between now and Report stage which deals with the whole, not just a part, or—borrowing his language—a significant part of the undertaking or assets of the subsidiary, then I would be perfectly content with his definition of "significant", which is that it varies from case to case and will have to be considered on its merits; I believe that was the way he defined "significant I would be perfectly prepared to think in terms of a material part as well as the whole, and I am sure that my noble friend will agree with me that if we have an undertaking of that kind, which gave some sort of protection with with regard to the subsidiaries, and that there is need to have the Secretary of State's permission, we would both think very differently about pressing this amendment.
Lord Bellwin: The decision to press this amendment is in the hands of the noble Lord who moved the amendment. What I will undertake to do is read carefully what has been said. I understand it clearly in my own mind and that it is as I have explained it: that the fears should not exist. However, because we are now in a field of the kind we are, I will of course take this point away and talk to advisers and colleagues about it. Should it be that the points are valid, then noble Lords know what we will do. If we do not feel the points are valid then it is always open to your Lordships to decide what to do about it at a later stage.
Lord Underhill: I am obliged to the noble Lord the Minister for agreeing to take a look at this in the light of our debate. Similarly, we on this side will take a careful look at the debate to see whether we should bring forward a differently worded amendment, if the Government themselves do not bring forward an amendment. May I deal with one other point, because the Minister agreed that there could be exceptional circumstances but in such a case there would be consultation with the Minister. But, again, we are dealing with the words in the Bill. Not necessarily this Government but another Government could be even more determined than the present Government to smash all question of public ownership.
Lord Mishcon: Impossible.
Lord Underhill: They could be, and therefore we may be in a position of facing "exceptional circumstances" and yet no consent of the Secretary of State is required. That is what concerns us. If there is consent by the Secretary of State for the sale of any part of the shares then we believe there ought to be consent of the Secretary of State for disposal elsewhere, although we accept the point that it is not wanted for the disposal of an odd bus here and there. Since the Minister is going to take a look at this, as we are, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.35 p.m.
Lord Underhill Lord Underhill moved Amendment No. 4:
Page 2, line 12, at end insert—
"() The Secretary of State shall not give his consent to any disposal under subsection (1) above unless he is satisfied that such action would be in the best interests of the Company and each of their subsidiaries and would not impair the integration of services available to the travelling public.").
The noble Lord said: We are not now arguing on the principle of disposal because we have discussed that on other amendments. What this amendment seeks to provide is that the Secretary of State shall not give his consent to any disposal unless he is satisfied that any such disposal would be in the best interests of the company and each of its subsidiaries, and would not impair the integration of services available to the travelling public. It may be argued that this is what a Secretary of State would do in any case. If so, let us put it in the Bill to make certain.
As I have said already, it may not be this Secretary of State but a future Secretary of State or a future Government, and we have to keep in mind that in

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other amendments there has been emphasis on the integrated nature of the National Bus Company and that what happens in one subsidiary could have an effect on another subsidiary. May I remind the Committee of the quotation I gave from the chairman's foreword in the bus company's 1981 report. The important part was:
"The National Bus Company is an integrated business and what happens to one sector must necessarily have an impact on the remainder."
The disposal of any part of the bus company, with the formation of a subsidiary for that purpose, could affect the general position of the NBC and also of any of its subsidiaries, separately or collectively. This point was stressed in our debate on National Express itself.
It is essential that the Secretary of State shall have regard to the provisions set out in this amendment. If these points are not satisfied absolutely, there is no reason why a particular disposal should proceed. It has been said in the disposal issue that the Government are concerned with the public good; that is precisely what this amendment intends to lay down. If consideration should be given to the sale of the whole or part of an operating subsidiary, remember that the primary business of a subsidiary is stage bus services. A private company would obviously seek to make a profit and that is why it would seek to take over any subsidiary. As was said in previous debates, operating services could go and that would impair the services available to the public.
A private company could decide that routes shall stop at, say, city boundaries because any extension beyond might be unprofitable. That would impair the services to the public. A private company could decide to cut out Sunday services or reduce their present levels. That would impair the services to the public. A private company could cut out or resist services after certain hours. That would impair services to the public. Clause 1 enables the National Bus Company to make disposals. Clause 3 empowers the Secretary of State to give directions, if he should so wish, to the National Bus Company to make a disposal. In either case what the amendment seeks to avoid is any disposal that would be contrary to the provisos set out in this amendment.
This is not a political issue. It is endeavouring to say that if there is going to be a disposal, then OK, provided that these essential provisos are adhered to. We must keep in mind those cases where the Secretary of State has overriden a decision of an inquiry by his own inspector into an appeal against the commissioner's refusal to grant stage carriage bus licences. In some of these cases, the company which has been given a licence has carried out that service to the detriment of the public by restricting some of the services it has taken over. Therefore, there is every commonsense in the amendment we are putting forward, and I hope that the Government will feel that these safeguards are such that they ought to be inserted into this Bill.
Lord Teviot: In order to hurry up the Committee I will come in now, so that my noble friend can answer both the noble Lord, Lord Underhill, and myself. I am in sympathy with the amendment because one
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point has not been mentioned. We have discussed political differences between private and public, but there is a difference concerning public transport which does not concern many other things. We have debated the question of the National Health Service; we have debated whether one should pay more for National Health Service spectacles or whether there should be no such spectacles. If National Health Service spectacles were withdrawn, people would simply have to pay for them—but if a public bus service is withdrawn, one cannot pay for something that is not there.
Coming back to the freedom of the individual, which again I think is absolutely right, public transport is a need for some people, because the alternative is private transport and you cannot expect everybody to be the owner of a vehicle; he or she has to have a licence to drive it, and might not be suitable to have a licence, or might be of a nervous disposition, or too young or too old. Also, if they are not able to own their own vehicle they cannot all be expected to pay for their own chauffeur, and they cannot be expected to be dependent on a relative or another person to transport them. We are moving into a very difficult area. Although the wording of the noble Lord's amendment might not suit the draftsmen in many ways, I do agree with the principle. We have to protect people who are not able to have their own transport.
Lord Bellwin: The Government have no doubt that their policy of introducing private capital will be of benefit, both to NBC and to the travelling public. It has never been our contention that each and every one of NBC's subsidiaries, of which there are more than 35, will necessarily be better off; there are bound to be some winners and some losers within the overall improvement that the Government expect to see. We are opposed to this amendment because it could give rise to technical challenges intended to frustrate the policy approved by Parliament in this Bill. Perhaps I may remind your Lordships that, under Clause 1, it is in fact the NBC who are being given the power of disposal. They will be responsible for putting forward schemes for the introduction of private capital. It seems to me in the highest degree unlikely that they will propose a course of action which they believe to be against the interests of the company. Equally, if it came to the point where NBC were proceeding under a direction from the Secretary of State, the Secretary of State would clearly have already reached a judgment about the best interests of the company, its subsidiaries and the travelling public. So I think the amendment is in large measure unnecessary, quite apart from the fact that it has a potential for being destructive.
The noble Lord, Lord Underhill, was arguing that it was somehow the NBC's intention in running National Express to run a social service. I would have to say on that, that under both Labour and Conservative Governments NBC has been clear that National Express is to be run as a purely commercial business. The Government's plans for introducing the private shareholding would hardly be revolutionary in that respect. It is really a question of deciding what are the objectives and how far will they be achieved. For the reasons I have given, I think what this amendment is seeking to do would make very difficult in practical terms the kind of achievement that we are talking about.
Lord Mishcon: Again, with the Committee's permission, I shall try to put the issue before the Committee as I see it, especially, if I may say so, with the help of the intervention of the noble Lord, Lord Teviot, and the introduction of this amendment by my noble friend Lord Underhill. Under Clause 3 of this Bill, the Secretary of State can give directions to the National Bus Company requiring it to use its powers under the section we are now considering. Secretaries of State are very powerful people, but there is an even more powerful instrument within our Government and that is the Treasury.
It could very well be that, if we were ever faced with an even greater drive for economies, the Treasury could give instructions to the various departments that those economies were to be effected; if I may use a coarse phrase which is known in the marketplace, the cash flow of the Government had better be improved by the sale of assets and by the sale of shares. Without any safeguard in this Bill, the Secretary of State under such pressure could give such a direction without having in view at all the various considerations that were put forward, if I may say so without seeming patronising, so ably by the noble Lord, Lord Teviot. And the whole question of social travel, the whole question of the needs of individual citizens who either cannot afford their own transport or for one reason or another have not the ability to hold a licence would be very drastically and most unfortunately affected.
I repeat what my noble friend said: there is no question of politics being in this at all. We are obviously admitting the general principle of the Bill, as we have to. But is it right that in this Bill there is absolutely no safeguard, and we are going to leave it at that—that the Secretary of State, when giving such a direction, when using his powers, does not have to take into account the matters mentioned in this amendment, which are absolutely innocuous and would, I am sure, in any event command the support of all your Lordships. Is it right that we should do that?
I ought to mention this, as a matter of law, as I understand it. If the Secretary of State is in fact satisfied, then it would be extremely difficult, if not impossible, to upset any of his decisions by way of a judicial review. So there is no question, in my judgment, of his having some difficulty to face in regard to the law courts if anybody wanted to challenge the decision he had made. He has to be satisfied in his own mind that these, from the point of view of the public, vital matters are covered. I repeat, it is not a question, as the Minister has said, of the Secretary of State being in charge of transport and therefore wanting so badly to protect all the interests of transport and the public. It is a question of the Secretary of State, possibly not the strong one I am sure the noble Lord thinks we have at the moment, but a weak one hereafter, giving in to Treasury persuasion, or even something stronger than persuasion. That is what we have to safeguard against, and it is done by the amendment. I hope your Lordships will feel that it is a proper amendment to support. Or, rather, I hope the noble Lord the Minister on reconsideration of these arguments will say that he would like to consider the matter very seriously before turning this safeguard down.
Lord Bellwin: I fear that in this case I cannot agree to do that. I think what I said, although not at great
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length, fairly expressed the position as we see it. It looks as if this is one on which we shall have to differ.
Lord Underhill: I am sorry the Minister has taken that view on behalf of the Government. He did say that to accept this amendment would leave the way open to possible technical challenges to frustrate the will of Parliament. That is not the intention of the amendment. I am sure it must be the will of Parliament that all the points set out in this amendment shall be observed by the Secretary of State before he gives consent to any disposal. I am sure everybody agrees that this is what should be done, and surely what we ought to do is to put those safeguards in the Bill. That is all the amendment is seeking to do.
In the light of what the Minister has said, we will have a look at this. We will not seek to divide the Committee on this issue, but we may have to come back to it on Report, because, frankly, if these provisos are not to be observed in relation to any disposal, then the whole question of disposal should be up for consideration again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Mishcon: I apologise for raising very briefly a technical point on which I may very well be wrong, but I do not want the clause to be passed by the Committee without its being drawn to the attention of the Committee or of the Minister to whom I have given short notice of the point. I see that the next amendment seeks to insert "Bus" before "Company" in Clause 3. I have noticed that in this clause—and I am looking at line 5 on page2—we again get "the Company", and indeed we get it again in Clause 2 at line 33. I see no reference—and here I apologise to the Committee if I have omitted to see something—to anything in the Bill which defines "the Company" as against "the Bus Company". I hope that I am not raising a false point.
Lord Bellwin: I am very grateful to the noble Lord, Lord Mishcon, who did give me an intimation that he wished to raise this point, and it enables me to try to clarify the position. Let me first say, however, that I do not think we need dwell too long on the amendment. It simply corrects an earlier slip of the drafting by changing "Company" to "Bus Company". The latter is the term used throughout the rest of Part I for the National Bus Company and is defined in Clause 7.
When the National Bus Company is first referred to in a subsection it is necessary to refer to it as "the Bus Company" in accordance with the definition in Clause 7. Subsequent references in the same subsection to "the Company" must be references to the company already mentioned; namely, "the Bus Company". That is the explanation given to me. I hope that it is satisfactory so far as the noble Lord, Lord Mishcon, is concerned. However, I assure him that, in moving the amendment—which I shall do—I shall certainly talk about the matter again. If it should be that there is uncertainty in any way then I shall certainly want to do something about it.
Lord Mishcon: Only out of sheer amusement do I refer the Committee and the Minister to Clause 3, where the amendment is due to take place. The noble Lord will see that "the Bus Company" is mentioned in that clause even through it starts off with a reference to "the Bus Company". In other words, we do not get "the Company". The explanation is at least not consistent, but I would not dream of spending any more time on it.
Clause 1 agreed to.
Clause 2 agreed to.
Clause 3 [Powers of Secretary of State to give directions]:
4.53 p.m.
Lord Bellwin Lord Bellwin: moved Amendment No. 5:
Page 3, line 33, at end insert ("Bus").
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Underhill Lord Underhill moved Amendment No. 6:
Page 4, line 2, at end insert—
("() No direction given under this section shall have effect unless approved by a resolution of each House of Parliament.").
The noble Lord said: I beg to move Amendment No. 6. Noble Lords will have heard references on a number of occasions to the fact that Clause 3 gives power to the Secretary of State to give directions to the National Bus Company to dispose of the whole or part of any subsidiary. The clause gives the Secretary of State very far-reaching powers, because he can also determine the purposes for using those powers of disposal and he may give directions as to the manner of the disposal, and this, of course could include the conditions to be laid down.
Admittedly, this clause is an improvement on those in the previous Transport Bills of 1980 and 1981, because it provides that the Secretary of State, before giving a direction, shall consult with the bus company and also consult the county councils where a subsidiary provides the services. Let me say in passing that the fact that there is provision that the Secretary of State shall consult county councils where a subsidiary provides services, indicates quite strongly the point that I have been making from this Dispatch Box time and time again, that the provisions in the Bill give the bus company or the Secretary of State power to dispose of any of the subsidiary operating companies of the National Bus Company, otherwise there is no point at all in the provision to consult the county councils.
That is the only place where they will come in for possible consultation. But after such consultation—which we are pleased to see—with the bus company or, as the case may be, with the county council, the Secretary of State can then still decide to do what he thinks fit. Later on we will outline how the consultation with operators on the testing of vehicles proceeded—consultation had not a considerable effect. Although the National Bus Company may consider a disposal not to be in the interests of the company or its subsidiaries, the Secretary of State can still give directions for disposal. In our debates this afternoon we must keep in mind that the Government
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have resisted the company retaining a 50 per cent. control in any subsidiary that is disposed of, and the Government have resisted other safeguards like those which we attempted to lay down in the previous amendment.
There must be some control over the use by the Secretary of State of these very wide arbitrary powers which are given to him in Clause 3. There is no accountability in the Bill whatever. What the amendment seeks to provide is a degree of Parliamentary accountability; that any directions which the Secretary of State may make to the National Bus Company, instructing them on a particular disposal of the whole or part of any subsidiary, should be by affirmative resolution of each House of Parliament.
The Government have said time and time again—and they have said so in their election manifesto—that they want to reduce interference with nationalised undertakings. Surely there could not be any greater interference with a nationalised undertaking than the power for a Secretary of State to instruct that undertaking to dispose of any part of it. That must be the greatest interference that one could think of.
On Second Reading the noble Earl, Lord Avon, repeated a statement which had been made on previous Bills—that it is only a reserve power. That statement was made on the 1981 Bill because we had a similar provision then. However, the power is there. There is nothing in the Bill to say that it is a reserve power. The power of instruction is clearly in the Bill, and even though it may be argued that the present Secretary of State is so reasonable that he would never use it except as a reserve power, the fact is that it is in the Bill, and if it is intended to be a reserve power, then I would hope again on this issue that the Government themselves would bring in an amendment to make that quite clear.
However, we must deal with the words in the Bill as they are at present and that has been made perfectly clear by various legal judgments. We cannot rely upon statements by any Minister, however, honourable and however much we may respect him or her. A power is in the Bill to give instructions for disposal. All we are asking in this amendment is that where such a direction is given, it should be by affirmative resolution of both Houses of Parliament. I beg to move.
Lord Bellwin: We have already made it known that we see the power of direction conferred on the Secretary of State by Clause 3 of the Bill as a reserve power. It is our object to see agreement between the Government and the National Bus Company over the introduction of private capital. All the signs are that this is possible on the basis of progress made so far. It may be that we shall have some differences with the company along the way. It would be naive of us to expect none. However, I hope that mutually acceptable solutions will be found.
As I have already said, we believe that there are positive benefits to be gained from private investment in NBC, both for the company and the travelling public. But in the last analysis the Government's policy is guided by their perception of the wider public interest. So it has been decided to include a power of direction in the Bill to carry the policy through should there be an irreconcilable difference between ourselves and the company.

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The taking of a power of direction by the Secretary of State over a nationalised industry is hardly a novel departure. There are many examples of such powers in the statutes. However, what is proposed in this amendment would, indeed, be novel—certainly as far as the nationalised transport industries are concerned. It would require the Secretary of State to secure an affirmative resolution of both Houses of Parliament before any direction he might give to the bus company would come into effect. This is at odds with the principle that Ministers are entrusted with the responsibility for the nationalised industries which they sponsor. They are, of course, answerable to the House for the way in which they exercise their responsibility.
It does not seem to me to make sense to separate off one piece of this responsibility—such as a direction issued under Clause 3 of this Bill—and make it subject to a specific resolution of the House. I repeat, that there are many other ministerial powers of direction in relation to the nationalised industries, all of which may be exercised without reference back to Parliament. Therefore, I hope that the noble Lord will see the force of this argument and not press his amendment.
Lord Balfour of Inchrye: I should like to support this amendment. The Minister gave as his defence for the Government's proposal for the negative procedure for orders, that orders for nationalised industries had always been subject to the negative procedure. That is quite true. But this is the first time that there has been a new amalgam between private and nationalised industries and I would submit to the Minister that we should seriously consider the power that we are giving to Parliament by the proposal to have the negative procedure. It raises the big issue of the power of the executive against the power of Parliament--the power of the executive under circumstances which have not been cited before. This is what I term this new amalgam.
If I may have the Minister's attention, we have heard much this afternoon about the great powers which the Minister can exercise, which will have an effect on many private enterprises in which the Government are a minority partner. It is quite true that the Minister will have the requirement to consult the various bodies cited in this clause. But the fact is that, whether or not he consults—and I am sure he will if he is told to by Parliament—the final power rests with the Minister. We are virtually giving him a blank cheque on this.
Many noble Lords have been in another place, as I have, and we know full well that there is an affirmative procedure and there is a negative procedure; in ordinary slang you can say that the negative procedure is, in fact, to pass something on the nod, because when an order is questioned under the negative procedure it comes on late at night after other business, when both Members and Ministers are tired, and it is virtually a non-existent safeguard. However, the affirmative procedure is a very definite safeguard for Parliament's rights over matters which will affect the welfare of many citizens, both in employment and in their daily lives. Therefore, I very much hope that the Government will not treat this as something coming under the umbrella of previous cases of nationalised industries, but will accept that this is something new and different and.
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therefore, will think again as to whether they should push Parliament in the corner and do what they want by order.
Lord Mishcon: I should like to echo in this Chamber every word of the noble Lord, Lord Balfour of Inchrye. It is worse than the noble Lord thinks. I stand to be corrected, but, as I understand it, not even the negative procedure is provided for under this Bill. This is a case, not of the new amalgam, as was mentioned a moment ago by the noble Lord, but a question of the new despotism.
Lord Balfour of Inchrye: I was endeavouring to discount the value of safeguards in the negative procedure, whereas in the affirmative procedure Parliament can express its wish.
Lord Mishcon: I am saying to the Committee that not even the negative procedure is provided for under this Bill. In other words, complete power is given to the Secretary of State not to come anywhere near Parliament in the following circumstances, to which I shall briefly allude.
This power is only of use under the Bill if the National Bus Company has decided that it does not wish to use the powers under Clause 1 or Clause 2; that is, it has decided that it does not wish to dispose of an undertaking, an asset or shares. Only then, of course, from a practical point of view, does this power to the Secretary of State come into existence at all. Therefore, what the noble Lord the Minister described—and I use his language—as a matter of the wider public interest is no longer a matter for the elected representatives in another place to discuss or for your Lordships to discuss in regard to the overall responsibilities of this House. It is a question purely and simply for the Secretary of State, and by a stroke of his pen he can order the National Bus Company to disregard what it thinks to be the wider public interest and to sell its assets, undertakings, or whatever it may be.
This is a complete negation of all that I believe your Lordships understand by the simple word "democracy". In those circumstances, I hope the Minister will realise what he is doing if he in fact tries to oppose this amendment.
Lord Davies of Leek: I am very worried about this. I spent 10 to 13 years as a member of the Statutory Instruments Committee in another place, and I believe that the vital importance of a statutory instrument to democracy and to the Houses of Parliament is being overlooked. I see a gradual tendency to say "There is nothing to worry about; no Minister will do this, no Minister will do that, be he Labour, be he SDP or whatever newfangled political parties come into existence".
We have built up this kind of safeguard in statutory instruments over a century or two of trial and error, and it has proved effective. It is a safeguard for the public. The powers of Parliament are dwindling, and this is another example which has been slipped into the Bill bit by bit. I say this without any venomous or vicious political party point of view. It is highly necessary for all good people now to come to the

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rescue of democracy, because bit by bit we are seeing it being eaten away by the abolition of the safeguards of statutory instruments. I could make a long speech, but it would bore the Committee. I have made my point and it is crystal clear. We should vote against this, whatever the outcome may be.
Lord Mishcon: We should vote for the amendment.
Lord Davies of Leek: Yes.
Lord Bellwin: If ever I have heard of a mountain being made out of a molehill, this really is it. I always delight in listening to the noble Lord, Lord Davies of Leek, if only for his rhetoric, and he knows this. But we are going off at a total tangent. Who would have thought that here was something new, to quote the noble Lord, "being slipped into the Bill"—some sinister attempt to introduce a new "amalgam", as my noble friend called it—something new. There is a mass of precedent. It is most unfair to imply that here is something that is for the first time before us, some sinister new attempt—for what was it the noble Lord, Lord Davies, said?—"All good people come to the defence of democracy". I trust he was saying the same thing when the nationalisation measures were being brought in by his administration.
The fact is that this is absolutely normal procedure in regard to the extent to which Ministers have powers of direction in relation to the nationalised industries, all of which may he exercised without reference back to Parliament. If I am asked to quote an example, then the quickest to come to mind are the British Rail Act 1981, and the present Oil and Gas Bill. There is a mass of precedent in any case. I could quote from other Acts too.
Lord Mishcon: The noble Lord the Minister will forgive me. It may be that I have made a wrong intervention and I apologise if I have done, but he is the last person who would want to mislead the Committee. Is the noble Lord saying that under the Oil and Gas Bill there was not the necessity to have a statutory instrument even by the negative procedure? I say it because I was arguing the case for the affirmative procedure. It may be that I am wrong, but my recollection is that there was a negative procedure that was required. Therefore, the noble Lord the Minister is unintentionally misleading the Committee.
Lord Bellwin: I am not aware that I am misleading the Committee. Certainly I would not do so intentionally. I would not want to do so unintentionally. But I am advised in fact that the situation which I describe is the case in the Oil and Gas Bill. If it should not be so, then of course the noble Lord knows that I will see that that assertion is corrected. The fact is that it does not alter the basic tenor of what I am saying and which so concerns my noble friend Lord Balfour. Here is nothing that is new and that is here for the first time. The amalgam to which he refers is not new at all. This is normal procedure. If we were to divide on this amendment and it were to be carried, then it has implications of massive scale. I really would ask the noble Lord to think carefully
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before he divides the Committee, because if he does I would have to say that we should wish to differ strongly with him on this.
Lord Mishcon: I must return to the fray, if only for one minute. The noble Lord the Minister—and I am not going back on the point about the Oil and Gas Bill, or any other precedent—is asking the Committee to consider this issue: if there is a quarrel—because it could not be anything else—or a dispute between the National Bus Company and the Secretary of State as to whether it is for the public good, the wider public interest, which the Minister mentioned, as to whether assets should be sold, or shares should be sold, the Secretary of State decides and not Parliament, and not even a reference by the negative procedure, I say to the Committee, is to be allowed. I know of no precedent for that. If there is such a precedent, I say that it is a bad one and we ought to start setting the precedent the other way round.
Lord Underhill: The Minister has said that if this was carried it would have implications of massive scale. I would ask the Committee to let us have the implications of such a massive scale. Surely the logic which my noble friend Lord Mishcon has just put forward to the Committee cannot be answered. The Minister has confirmed that this is only a reserve power. He said that he hoped there would be sweet reasonableness and hoped there would be an agreed solution, but then, as my noble friend Lord Mischon says, there could be an argument. The minister then says," I don't care what you, the National Bus Company, say, or what the county council concerned say. I am now instructing you".
Surely in those circumstances Parliament ought to be able to say, "You are doing the wrong thing", or, "You are doing the right thing". Even if the Minister would say on behalf of the Government that they would have a look at this to see whether they could make provision even for the negative procedure, that would be something, but there is not even provision for that. There is provision for quite a number of other orders by negative procedure in this Bill, but nothing at all about this.
I do not believe that, as the Minister said, we are making a mountain out of a molehill. This is an important point. We took this stand on the 1981 Bill on the sale of British Rail subsidiaries. We lost on that occasion, but I believe there has been a more effective debate on this occasion, and that the issue has been shown to be so logical and such an important constitutional one that we shall ask the Committee to divide and support this particular amendment.
5.15 p.m.
On Question, Whether the said amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 53; Not-Contents, 82.

DIVISION NO. 3

CONTENTS

Airedale, L.

Bishopston, L.

Ardwick, L.

Blyton, L.

Aylestone, L.

Boston of Faversham, L.

Birk, B.

Brockway, L.

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Brooks of Tremorfa, L.

Listowel, E.

Bruce of Donington, L.

Llewelyn-Davies of Hastoe, B.—[Teller.]

Byers, L.

Cledwyn of Penrhos, L.

Longford, E.

Collison, L.

Lovell-Davis, L.

Cooper of Stockton Heath, L.

Melchett, L.

Mishcon, L.

Cross, V.

Molloy, L.

David, B.—[Teller.]

Ogmore, L.

Davies of Leek, L.

Oram, L.

Denington, B.

Peart, L.

Donaldson of Kingsbridge, L.

Phillips, B.

Rhodes, L.

Ewart-Biggs, B.

Stamp, L.

George-Brown, L.

Stewart of Alvechurch, B.

Hall, V.

Stewart of Fulham, L.

Hampton, L.

Stone, L.

Hatch of Lusby, L.

Tanlaw, L.

Houghton of Sowerby, L.

Taylor of Mansfield, L.

Howie of Troon, L.

Underhill, L.

Irving of Dartford, L.

Wells-Pestell, L.

Jenkins of Putney, L.

Wigoder, L.

Kennet, L.

Wootton of Abinger, B.

Kilmarnock, L.

Wynne-Jones, L.

NOT-CONTENTS

Airey of Abingdon, B.

Lane-Fox, B.

Alexander of Tunis, E.

Lauderdale, E.

Ampthill, L.

Lindsey and Abingdon E.

Atholl, D.

Long, V.

Auckland, L.

Lucas of Chilworth, L.

Avon, E.

Lyell, L.

Belhaven and Stenton, L.

McFadzean, L.

Bellwin, L.

Mackay of Clashfern, L.

Belstead, L.

Macleod of Borve, B.

Boardman, L.

Mancroft, L.

Campbell of Alloway, L.

Marley, L.

Coleraine, L.

Merrivale, L.

Colwyn, L.

Mersey, V.

Cottsloe, L.

Mottistone, L.

Croft, L.

Murton of Lindisfarne, L.

Cullen of Ashbourne, L.

Newall, L.

Daventry, V.

Nugent of Guildford, L.

Davidson, V.

Orkney, E.

De Freyne, L.

Orr-Ewing, L.

Denham, L.—[Teller.]

Pender, L.

Dilhorne, V.

Portland, D.

Eccles, V.

Rankeillour, L.

Ellenborough, L.

Reigate, L.

Elliot of Harwood, B.

Roberthall, L.

Ferrers, E.

St. Davids, V.

Fortescue, E.

Sandford, L.

Fraser of Kilmorack, L.

Sandys, L.—[Teller.]

Gainford, L.

Sempill, Ly.

Glasgow, E.

Sharples, B.

Glenarthur, L.

Skelmersdale, L.

Glenkinglas, L.

Spens, L.

Gormanston, V.

Stodart of Leaston, L.

Gray, L.

Swinfen, L.

Greenway, L.

Terrington, L.

Grey of Naunton, L.

Thomas of Swynnerton, L.

Gridley, L.

Trefgarne, L.

Grimston of Westbury, L.

Trumpington, B.

Hailsham of Saint Marylebone, L.

Vaux of Harrowden, L.

Vivian, L.

Home of the Hirsel, L.

Ward of Witley, V.

Hornsby-Smith, B.

Young, B.

Hylton-Foster, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.23 p.m.
Lord Underhill Lord Underhill moved Amendment No. 7:
Page 4, line 3, leave out subsection (3) and insert—
("(3) No direction shall be given to the Bus Company under this section which limits or prevents the exercise by the Company of any of the duties placed on the Company by section 24(2) and (3) of the Transport Act 1968.").
The noble Lord said: On the last amendment we were discussing the powers given to the Secretary of State to give directions to the NBC to dispose of the whole or part of any subsidiary. Subsection (3) provides:
"It shall be the duty of the Bus Company (notwithstanding any duty imposed on them by section 24(2) or (3) of the Transport Act 1968) to give effect to any directions given under this section".
I ask noble Lords to note the word "duty", not "power"; Parliament placed these duties on the NBC when it passed the 1968 Act.
On referring to the relevant provisions of that Act—I will paraphrase—we find that subsection (2) places a duty on the company to co-operate with the transport executive for any area in making an agreement as to services to be provided by the NBC or their subsidiaries; and subsection (3) places a duty on the company or through their subsidiaries to co-operate with British Rail or London Transport in the coordination of passenger transport services. It will be clear that those duties should be retained. It surely cannot be right that the Secretary of State should have power to instruct the company to dispose of a subsidiary which may prevent them or the subsidiary from carrying out the obligation to make an agreement with an executive in relation with the provision of services. The private company which may take over from an operating subsidiary of the bus company could not be instructed to enter into such an agreement; at least, my understanding is that that could not be done without further legislation, because such an agreement could involve some loss-making services being retained.
It must also be wrong to provide that the Secretary of State can give directions to the bus company for a disposal which may inhibit the company or a subsidiary from continuing an arrangement for the co-ordination of transport services. Again, without further legislation I understand that a private company could not be compelled to take over such arrangements. And even were it possible to insist that a private company which may take over the whole or part of a subsidiary must carry out those duties placed on the NBC by the 1968 Act, surely such a company could not be compelled to run unprofitable services.
The Bill does not include any provision for accountability, yet there are sweeping powers to give directions to the National Bus Company, even though to do so might conflict with the duties —and I say "duties", not "powers"—placed on the company by the 1968 Act. The proposal in the Bill can be said to be by way of incidental legislation which would transcend the primary legislation clearly laid down by Parliament when it set up the NBC under the 1968 Act. In effect, the amendment turns round Clause 3(3). The Bill provides that the bus company must give effect to any directions, notwithstanding any duties placed on the company by the 1968 Act. The amendment seeks to turn that round to provide that no direction shall be given to the bus company which might prevent the company from excercising the duties placed on them by the 1968 Act.
Lord Beliwin: The first part of the amendment would delete from the Bill the requirement in Clause 3(3) that NBC should be under a duty to give effect to a direction from the Secretary of State. Clearly,

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there can be little point in enabling the Secretary of State to give a direction, without imposing a corresponding legal obligation on the recipient to comply with that direction. I cannot believe that any Government, of any political persuasion, could accept a situation where the recipient of a ministerial direction could choose whether or not to comply with it
The second part of the amendment refers to N BC's duties under Section 24 of the Transport Act 1968. The relevance of these duties to our policy of introducing private capital into NBC's coach and property interests has been much exaggerated. Section 24(2) of the 1968 Act puts NBC under a duty into agreements with passenger transport executives for the reorganisation of local bus services. Those agreements have in fact been in place for some time, and they would not be brought to an end by the Bill. Section 24(3) requires NBC to co-operate with British Rail, London Transport and the Scottish Bus Group in co-ordinating passenger transport services. In practice, the main importance of this duty has been in the provision of rail replacement bus services, and these, too, would be unaffected by the Bill.
The provision in Clause 3(3) that the bus company's duty to give effect to a direction should override its duties under Section 24 is there for the sake of legal clarity. For the reasons that I have explained, a major clash is most unlikely, but it is desirable that the Bill should make clear which duty should have precedence in the event of such a clash, if only to avoid the possibility of a spurious legal challenge. For those reasons, I regret that the Government cannot accept the amendment.
Lord Underhill: The Minister has said that the amendment would give authority to the National Bus Company to refuse a direction. I readily admit that that might be an error in the drafting; clearly, that is not what is intended. What we wish to lay down is that the Minister shall not give a direction if it is against the duties placed on the bus company under the 1968 Act. The noble Lord said that the duties, not powers—I must not use that word—laid down in the 1968 Act would not be affected by the proposals for disposal in the Bill.
We shall have to look very carefully at what the Minister has said. It would appear to me that if an operating subsidiary dealing with stage carriage services in, say, Cumberland was disposed of, there might well arise a conflict in regard to the duties imposed on the company or its subsidiaries by one of the provisions of the 1968 Act. Therefore, we shall have to consider very carefully what the Minister has said and see whether or not this is an important issue to which we ought to return. It appears to us that anything which makes the bus company set on one side the duties that are placed on it by the 1968 Act, ought to be avoided. As I say, we shall have to read Hansard in order to consider carefully what the Minister has said, and then decide whether to return to the amendment, either in this form or in a revised form, at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 3, as amended, shall stand part of the Bill?
Lord Bellwin: I wonder whether I may make just one observation at this stage. When we were discussing Amendment No. 6, I think, I referred to the Oil and Gas (Enterprise) Bill and the procedure therein. I think that I ought to correct something that I said at the time. I was advised that there was no requirement placed on Parliament, even by way of the negative resolution procedure. In fact, I am now informed that there is a requirement in the Bill. I should not in any way want to mislead the Committee, and so I thought that I should take the opportunity to apologise for the misstatement, and I readily do so.
Lord Underhill: We are very grateful for the Minister's statement.
Clause 3, as amended, agreed to.
5.34 p.m.
Lord Underhill Lord Underhill moved Amendment No. 8:
After Clause 3, insert the following new clause:
("Development of the Bus Company's property.
.—(1) Nothing in this Act shall alter the power of the Bus Company to enter into financial agreements with any public authority or private company for the development of any property of the Bus Company.
(2) In this section "public authority" means a nationalised industry or local authority.").
The noble Lord said: We now pass to the question of properites of the National Bus Company, which we understand have a book value of £100 million. The Government have stated quite clearly—and this was confirmed by the Minister on Second Reading—that the disposal powers under the Bill will at present apply to National Express, National Holidays, and to the properties of the Bus Company. On Second Reading the noble Lord, Lord Bellwin, said that the provisions would enable the development potential to be unlocked.
"through a partnership with the private sector".
However, it would appear that the Government are not proposing partnership, because the Bill provides for disposal of "the whole or any part" of any subsidiary to be set up. The Government are proposing that the National Bus Company shall have a minority holding in any such subsidiary. Therefore, if there is to be a partnership, it will be a junior partnership, not a senior partnership.
Also at Second Reading the noble Earl, Lord Avon, referred to a statement that I had made in the same debate that the National Bus Company already had powers in relation to the development of its property. At col. 755 the noble Earl said:
"He is of course quite correct in saying that NBC already have some powers to develop their properties, for example, in joint venture with the private sector".
The noble Earl went on to say:
"What the company lack, however, is the power to establish and sell shares in a subsidiary for the purpose of such development".
Why should there be necessity for disposal of shares?—especially as the Government are to insist that the National Bus Company shall retain less than 51 per cent. Surely there should be joint development in accordance with existing powers without there being a sale of shares as such. I understand that a recent development has been undertaken in that way by the the National Bus Company. Disposal even with arrangements for possible leaseback would place the

589
National Bus Company in a far less favourable position than if it retained actual ownership, with advantage of future appreciation of values. That was the view taken on this side of the Chamber when we debated British Rail property in the 1981 Bill. Sir Robert Lawrence, chairman of the BR Property Board, said on 17th April 1981, prior to the passage of the 1981 Act:
"But it should not be forgotten that once land is sold, its income or its potential income, is lost to the railways forever. We have sold property which in a different climate we might have retained for its growth potential".
We could say that that might apply to National Bus Company property.
The amendment seeks to write in a provision that nothing in the Bill
"shall alter the power of the Bus Company to enter into…agreements with any public authority or private company for the development of"
National Bus Company property.
We are not rejecting the proposal for private investment. We are saying that the existing power to enter into development agreements must be allowed to continue, instead of relying solely upon actual disposal of the property. I beg to move.
Lord Bellwin: I think that I should be able to assure the noble Lord, Lord Underhill, that his proposed new clause is unnecessary. As he says, there is no difference between us on the end objective. Nothing in the Bill alters or limits in any way NBC's powers to develop its property in conjunction with other public authorities, be they other nationalised industries, local authorities, or other publicly-owned bus operators, such as the PTEs. Such developments are frequently a sensible way of making best use of an NBC site, and the Government wish to see them continue. Indeed, we have said so explicitly in the first words of Part 1 of the Bill,
"Without prejudice to any powers conferred on them by any other enactment".
The point of the Bill is not to restrict what NBC already does. It is to allow it the freedom to develop new ways of unlocking the potential of its property assets. The chairman of NBC, the noble Lord, Lord Shepherd, has himself said that,
"passenger facilities are not always of the highest standards, and NBC would positively welcome the involvement of private capital in improving these".
NBC needs the powers in the Bill in order to complete the range of options open to it for developing its property in conjunction with private sector partners; for example, by selling a controlling interest in a subsidiary established to develop a specific site. By entering into arrangements of this kind, NBC will be able to widen the sources of capital for investment in bus properties at no cost to the taxpayer.
I do not think that there is a great deal between us in relation to the development of NBC property. I hope that I have persuaded the noble Lord that his amendment is already catered for in Clause 1 of the Bill, and therefore I trust that he will feel able to withdraw it.
Lord Tanlaw: I wonder whether the noble Lord can give a further reassurance, since 1 think he gave an assurance during Second Reading of the Bill. The disposal of properties in order to raise finance for both
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the railways and the bus companies is one matter. The other matter which I raised was that of an integrated transport system, whereby a terminal in a city or town or the metropolis is one where you can catch a train, a bus, a Tube and so on. This is one of the points which has not come out at all.
The noble Lord has given assurances that these property disposals will be made sensibly, with PTEs and so on. But what I have not heard the noble Lord say—no doubt it is due to my fault rather than his—is that it is the policy of Her Majesty's Government to have an integrated travel terminal in cities for the benefit of passengers. I am sure the noble Lord is aware that it is an incredibly inconvenient system that we have at the moment, due to historical reasons, with the bus stations put at a considerable distance from the railway stations and passengers unable to switch; and certainly so on days like today.
All I am asking, with the help of this amendment moved by the noble Lord, Lord Underhill, is whether it is Government policy to have these travel centres of an integrated kind in our cities, and, if that is the case, then will he give an assurance that this Bill, as well as the Railways Bill, will be used to see that these properties actually emerge through the disposals of both the railways and the Bus Company?
Lord Bellwin: I do not quarrel at all with the basic tenet of what the noble Lord, Lord Tanlaw, says. I would not have thought that what we are talking about on this amendment, in this part of the Bill, was relevant to his point, other than that it would bring us to a state in which the Bus Company could then do the things that it wants to do with regard to its properties; and I say again that nothing in the Bill in any way changes or detracts from its present powers. It is to bring an additional new scene (if you like) into the whole area of this kind of possibility.
Other than to comment in general on what one might like to see in the way of an integrated situation, which clearly would be a good thing to have, although I want to say something to persuade the noble Lord that he need have no fears so far as this proposal is concerned I think I would have to say that I do not think that this particular measure will contribute a great deal towards it. I think that is something which will have to develop as part of the whole philosophy that we arc trying to see—and what is that? We are looking for (and I use the word again, if I may) scenario, where we have a greater scope for the National Bus Company to work in conjunction with the private sector to (if you like) make the most of its resources.
That may be, in some cases, by selling the property and taking the funds and applying them to some other developments which they may feel are in the interests of what they are seeking to do. That would be one situation. There may be others as well, which I can think of, and I am sure the noble Lord himself can think of many more, in that he has expressed his concern that there should be greater integration.
But what this amendment does, I think, is to, express a concern which I think may not be there, because the clause really takes care of it. I am sure the noble Lord, Lord Underhill, will want to consider that again carefully, but that would be my response to him on the amendment.
Lord Underhill: I am grateful to the Minister for that assurance, and we shall read very carefully what he has said. It should be borne in mind that we are not opposed to the development of proper schemes. In fact, I believe a press notice was issued only recently, a few days ago, which said that the Bus Company had entered into an agreement with its own pension fund for the development of a particular property without requiring any instructions at all, either from Parliament or from the Secretary of State.
The point raised by the noble Lord, Lord Tanlaw, is a very valid one, and this could be the sort of issue on which there could be conflict between the Bus Company and the Secretary of State on a disposal and which might require the type of affirmative decision that this Committee unfortunately rejected on a previous amendment. But I will take careful note of what the Minister has said, and I beg leave to withdraw the amendment at this stage.
Amendment, by leave, withdrawn.
Clause 4 [Provision of services for related companies]:
On Question, Whether Clause 4 shall stand part of the Bill?
5.45 p.m.
Lord Underhill: May I ask the Minister just a few points on this? Clause 4 is the one which deals with the provision of services for related companies, whereby the Bus Company can, I understand, enter into any commercial agreement with a related company—that is, one to which it has disposed of property—to provide maintenance services, and so on, to the related company. May I ask: If the services are to be permitted to a related company, could there not also be powers to the National Bus Company to give similar services on a commercial basis to any other body, provided, of course, it is not a competitor of the National Bus Company, which they would not wish to do?
Furthermore, Clause 4 provides that "related company" means a company in which the Bus Company has at any time had an interest of not less than 20 per cent. With the passage of time, it could be many years previously that the Bus Company had had an interest in this related company, and that would be more important to the point that I have raised. If such a facility is to be given to the National Bus Company to make such an agreement on a commercial basis, is there any reason why this facility should not be extended to enable the National Bus Company, in its wisdom, to give a similar service to another undertaking, bearing in mind that the related company might be one in which the Bus Company had a 20 per cent. interest many years previously?
Lord Bellwin: This clause in fact serves two purposes. It defines "related company" for the purposes of this clause and for Clause 5, and it confirms that the NBC may provide for any related company services which they have power to provide for any of their subsidiaries. It would be unreasonable to give NBC an unfettered power to provide management-type services for any company in which they had ever held an interest, no matter how small. The distinction therefore strikes a
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balance by allowing NBC to provide services to any company in which they hold or have held at least 20 per cent. of the ordinary issued share capital, either directly or through nominees or subsidiaries.
The essential point is that NBC will be able to continue to provide services to a previously wholly-owned subsidiary transferred to private onwership. The clause will ensure that NBC's regional operating companies can continue to provide shared facilities for the coaching businesses when they are in private ownership. The decision whether to offer services to a related company, and the terms and conditions, will be a matter for NBC's commercial judgment. Whether to buy the services will be a matter for the related company to decide. I hope the noble Lord will perhaps find the extra clarification helpful.
Clause 4 agreed to.
Clause 5 [Pensions for employees of related companies]:
Lord Underhill Lord Underhill moved Amendment No. 9:
Page 4, line 30, at end insert—
("Where the Secretary of State is requested to do so by the trustees of a pension scheme of the National Bus Company or a trade union or trade unions with negotiating rights for members who are covered by the pension scheme, he shall use his power under subsection (I) above to make an order requiring that the terms and conditions of the pension scheme which shall be offered by the employer to whom the subsidiary of the National Bus Company is transferred shall not be less favourable than those which were provided for those employees by the National Bus Company of which they were members.").
The noble Lord said: This clause relates to the question of pensions, and I am certain that all noble Lords will agree that this, in particular, is a matter on which there should be no party arguments whatever. The transfer of employees from one undertaking to another always creates problems, particularly in relation to pensions, and more so where an employee is compulsorily transferred. Various amendments were put forward at the Committee stage in another place, during which the Minister said that pensioners' existing accrued rights cannot be terminated. But, of course, what the individual is seeking is to carry his pension expectation through into the company to which he is transferred, and I would ask what rights there would be for the employee so transferred without some statutory provision.
The Under-Secretary, Mrs. Chalker, on 18th March, during the Committee stage in the other place, said at column 328:
" Clause 5 will allow the Secretary of State to make orders applying to a privatised subsidiary—in the terms of subsection (1) a 'related company'—during such a transitional period as I said that the Inland Revenue would allow before the details of the privatised subsidiary pensions arrangements became clear".
The Minister continued:
" For example, an order might be made ensuring that the related company continued to make adequate payments to the NBC pension fund for…interim period".
And the Minister stated also that the Secretary of State was debarred from making an order which might worsen the pension entitlement of employees, quoting Section 74(6) of the Transport Act 1962, the terms of which I have before me. Mrs. Chalker also stated (in col. 331).

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" But if the Secretary of State was required to make an order, virtually dictating to the purchaser what should happen, it would present an unnecessary statutory straitjacket, which is not required by virtue of section 74 of the 1962 Act".
She stressed that pension arrangements will be a matter for negotiation between the new employer and the workforce so there could be conflict between not worsening the employees' pension rights under the 1962 Act and not worsening the position of the new related company as provided in this clause. This was clearly explained by the Under-Secretary of State, Mrs. Chalker, at the Committee stage on 18th March in another place at column 353, which I should like to quote:
" If an order makes the position worse, there is a requirement under section 74(6) of the 1962 Act to put the matter right, because the order would be invalid. If the amending order put right the worsenment of the related company, but worsened the position of its employees, it would again be invalid by virtue of section 74(6) of the 1962 Act. Therefore, the Secretary of State would be required to try again. He must not worsen the position of the employees by putting right the worsenment of the company. He must put both matters right".
Mrs. Chalker was then asked how the position of the employees would be safeguarded. The Minister replied that if necessary the Secretary of State would make an order. When the Minister was pressed to write such an assurance into the Bill, it was said that by the Report stage in the other place she hoped she would see if it was possible to find a form of words; but the Minister added that the Bill can affect expectations but cannot affect established rights. At the Report stage, on 20th May, the Minister proposed an amendment and this appears in the present Bill before the Committee as subsection (2) of Clause 5:
"In exercising with respect to any pension scheme the powers conferred by this section, the Secretary of State shall take into account any representations made by the persons administering the scheme".
That clearly did not clarify the position that had been raised at Committee stage. The Minister stated this in putting forward that amendment, in column 754:
"We were also pressed in Committee to amend the Bill to oblige the Secretary of State to use his order-making power in certain circumstances. We have, as I promised, given due consideration to that proposition, but we concluded that the clause should remain discretionary in line with the principal order-making power in section 74 of the Transport Act 1962".
That clearly does not put the position right as discussed in the Committee stage of another place. The present amendment seeks to ensure the statutory protection of those compelled to leave employment with NBC in consequence of any disposal under the provisions of the Bill and provides that, should the trustees of the pension fund or the appropriate trade union consider it necessary, the Secretary of State shall make an order to protect the pension position under any scheme offered by a new company to provide that such a pension scheme shall not be less favourable than that with the National Bus Company. A difference would appear to be with the Government: first, the Bill provides for disposal; employees may be compulsorily transferred to a private company and their pension must be protected, we argue. The Government say this must not place the prospective purchaser in any straitjacket but says that any order-making power to deal with the situation shall be discretionary. What the amendment is seeking is
594
that it shall be the duty of the Secretary of State to make an order in the circumstances I have outlined.
Lord Bellwin: One might put it a different way by saying that the proposed amendment would enable the trustees of an NBC pension fund or trade unions representing members of such funds to dictate, through the agency of the Secretary of State, the terms of the pension scheme to be offered to employees of an NBC subsidiary transferred to private ownership. He could be required to make a pension order to ensure that employees would enjoy the same pension expectations as if they had remained NBC employees.
The Government are not willing to see this kind of statutory interference in private occupational pension arrangements. The sole purpose of Clause 5 is to provide the Secretary of State with a means of ironing out any technical difficulties over pension arrangements for employees of a subsidiary to be transferred to private ownership. It is there to enable a smooth transition to be made from the public to the private sector.
As was explained during our Second Reading debate, the responsibility for establishing new pension arrangements will, in the first instance, rest with NBC. Subsection (2) of Clause 5 already enables trustees of a pension fund to make representations to the Secretary of State about the need for or terms of pension orders. Doubtless, NBC, as part of the process of establishing a new scheme, will consult trade union representatives through the normal negotiating machinery. That is how it should he. It is in everybody's interest that any new scheme is acceptable to the employees.
I should make it clear—and I welcome the opportunity to say this, and I must say that so did the noble Lord, Lord Underhill, in what he was putting forward—that nothing in this Bill could conceivably affect pensions which are already in payment to former NBC employees. Nor could it affect any employee's accrued rights for past service. The only issue is who should determine future pension arrangements once a subsidiary is in the private sector. The Government believe that the right course is to leave pensions matters to be determined in negotiation between company and workforce within the existing statutory framework—without interference from Westminster or Whitehall. For that reason, we are opposed to the amendment.
5.59 p.m.
Lord Byers: May I intervene in this? I took some interest in the debate which occurred in another place. Over the last 10 years, as some noble Lords may know, I have been chairman of the Company Pensions Information Centre and we have had a good deal of experience. Our experience indicates that, while this is a laudable amendment, in practice the Government are right and I should like to detain the Committee for two or three minutes to say why.
The amendment seeks to ensure that the employees of NBC are no worse off in pension terms after denationalisation than they are now. On the face of it, that is a laudable aim which most of us would say at once was a good idea. The fact is that, far from protecting the former employees of NBC, I believe we will seriously mislead them and, what is worse,

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if these amendments are included in the Bill, we may be creating conditions in which the new private sector companies cannot avoid bankruptcy because of the burden that this Bill is imposing on them. This is the aspect on which I want to speak.
I give three reasons for this. First, even where an undertaking remains nationalised and where pension provisions are laid down in an Act of Parliament, there is no guarantee that the benefits provided in the future will never be less favourable than the benefits provided today, because no Government can bind their successor, and what appears reasonable at one stage may not be reasonable at a later date. We have a very good example of this. We have seen such changes made to the biggest pension fund of all, the state fund. The 1975 Social Security Pensions Act provided that the basic state pension would rise in line with earnings or prices, whichever increased faster. The link to earnings has already been removed by the Government by later legislation, and the link now is to prices only. There is no guarantee for the future whatever you write into statutes.
My second reason for saying that guarantees which appear attractive could in fact be unrealistic is that Governments can raise money by taxation, but private sector employers have no such avenues open to them. A private sector employer cannot prudently make pension promises over and above those which the profit from selling his goods or services will support. I believe that to do anything other than that is to raise false expectations on the part of the pensioners.
My third reason is that private sector employers, just as much as Governments, must have regard not only to what they can pay now, but to what they may be able to pay in the future. That is why the great majority of pension schemes, the best pension schemes, contain in their formal documents a provision to the effect that it is hoped to carry on the scheme indefinitely but because future business conditions cannot be foreseen, the management must have the right to amend or discontinue the scheme at any time, subject to satisfactory safeguards being applied to the benefits already accrued, which was the point made by the noble Lord, Lord Bellwin.
In arguing against this amendment, which seeks to impose an open-ended guarantee, I am not seeking to penalise the members of the pension schemes in question. I am asking the proposers of the amendment to face up to the risks inherent in running a business. The best way to protect the interests of employees is to ensure that the promises which they receive from their employers are confined to those which the employer can afford and not to those which could lead to his goods and services being priced out of the market.
In very simple terms, I believe that the future of a pensions scheme under a change of management must be left to negotiation between those who represent the workers and the employers themselves, advised by their accountants and in the light of what they feel is going to be the future. Their accrued rights up to that point will be guaranteed. There is no question about that; that is a matter of law. I honestly believe that although this amendment looks very good indeed on paper, it should be resisted.
Lord Teviot: That was a most interesting intervention by the noble Lord, Lord Byers. But before one gets on to the business about the merits of this amendment on pensions being safeguarded, I should like to ask my noble friend this question. He may prefer to write to tell me what pension arrangements there are for the non-clerical staff of the National Bus Company. I suspect that there are very few unless the situation has changed very much in the past 15 years.
The situation was most appalling. There was no contributory or non-contributory pension scheme. They had difficulties in getting staff and I blame the trades union as well as the company for not getting together on this matter and seeing that there was a proper pension scheme. People who worked for as much as 40 or 50 years—I remember it happening—retired, and on their very last day they were ushered upstairs into the presence of the great man, the managing director, or the chief general manager, and they were shaken warmly by the hand and were given a cheque which was £1 per year of service ex gratia payment. I should like to know, in talking about pensions, what pensions schemes there are.
Lord Bellwin: Clearly, I cannot off-hand give a list of what the pensions arrangements are. I shall gladly write to my noble friend about that. I should be very astonished if the situation that he describes still pertains today. I shall gladly write to him about that matter.
Lord Mishcon: Naturally, one listens with the greatest patience and appreciation when the noble Lord, Lord Byers, with his great experience, talks about a matter of this kind. Therefore I hope that he will realise that I have that respect when I make the following observations: if one were facing a situation where one was taking a firm indulging in private enterprise merging with or being taken over by another firm, the arguments about negotiations, about the fairness of the position where there are those who can negotiate on behalf of the employees with the employers, is a very sensible argument to make. The question of being able to afford these arrangements is also a very sensible argument to put forward.
At this moment, I must confess that I have a nostalgic feeling—I hope the Minister has it as well. I can remember the noble Lord handling his very first Bill in this House with a capability which I looked upon then with the utmost foreboding, because on that Bill he dealt with me and my noble friend Lord Underhill on the matter of pensions. I hope that one or other of us by the end of the debate knew what we were talking about. I am not going to suggest which one it might have been.
I next remember the noble Lord the Minister dealing with local government legislation. My noble friends and I pleaded for something to go in a Bill which dealt with consultation with various authorities. The Minister brushed the arguments aside and said how foolish to put in a Bill that people would consult! What did it mean? Of course they would consult as a matter of courtesy. What was the point of having it in legislation? Well, I notice that he is now faced with a subsection, which has been put in most generously by his Government, which talks in just those terms of

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consultation and nothing more. The employees are not very much protected on the Minister's own arguments on other Bills by the mere process of consultation.
I shall tell the Committee what is in my mind, and I hope I shall be concise about it. I am thinking of the older employee, not the younger one. In order to differentiate this from the type of case that I first talked about in regard to private enterprise, I am thinking of the choice which has been made by many employees as to whether they will go into private enterprise with all the risks both ways. There is the chance that businesses can fail and that the job is not secure. On the other harm, with private enterprise there is the possibility of ascending in the scale of employment which may be very much greater and the rewards may be greater.
There is the thought, too, that if one goes into public enterprise there is the security of position and security of pension.
Lord Byers: Did the noble Lord say, "All the security attached to nationalised industry", after all the redundancies that we have seen in British Steel?
Lord Mishcon: I was not talking about the result. I was talking about the poor employee who usually goes into nationalised industry or a public appointment and feels that he is going into something secure. The fact that economic conditions belie all his hopes and dreams is a matter to be deplored, but not used as an argument.
So what I was saying was this: I was thinking of the older employee and the thought that he had in the good old days, if one can use that term, when indeed it was a choice between the security of the Civil Service or public employment or private enterprise. He has devoted a number of years of his life to the transpors industry in its public aspect. All of a sudden he is faced, towards the end of his years of employment, with this transfer over to privatisation, if I may use that horrible word. Is it right that he should have his pension rights at hazard as to whether they are what he was assured—although there may be no written guarantee—that they would be if he stayed? We should want to protect that person. Of course, his rights up to the date of any such transfer are secured—they are a matter of contract—and no Act of Parliament could alter that situation.
But thinking in terms of people's futures, is it not just that one says that, before the transfer takes place, any order that is made shall ensure that those old employees shall not be left with less favourable pension rights than they would have had if they had seen out their years of service with the nationalised company? If your Lordships look at it in that way, I believe you will want to be very sympathetic to this amendment.
If the noble Lord the Minister can give an assurance that, when any transfers of subsidiaries of the National Bus Company take place—and we are dealing with related companies where there has been, or is at the date, a 20 per cent. interest in the other companies, so far as the National Bus Company is concerned—there will undoubtedly be in the Minister's mind an intention to secure that employees who are older in terms of service will not be worse off than they would
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have been if they had finished their terms of service, with the loyalty which they have obviously shown up till then, my noble friends and I will at least be able to consider what he says and will not press this amendment today. But I believe that your Lordships will want some assurance about the type of employee that I have mentioned.
Lord Mottistone: Should not the noble Lord pay rather more attention to the words of the noble Lord, Lord Byers, based on his experience, and to his comment? I am sure that noble Lords opposite were not prepared for that and, therefore, they went on with their arguments. But the facts of the matter are first, that the private company has to pay its way and, secondly and sadly, redundancies come from all over. At the moment, I am involved in trying to improve the pensions of people in the Distributive Industry Training Board, which I have had the honour to serve for some years, who, for all sorts of reasons, are not getting the pension that they expected, because they took a choice, assuming that their training board would go on until they retired. For different reasons it has not done so, and they are now in the position that they chose the wrong sort of pension, whereas if the board had gone on they would have chosen the right sort of pension. So they are in difficulty, and I am afraid that that applies to us all.
The noble Lord, Lord Mishcon, carries us away with his sad stories about people who thought that they were in the public service and safe forever, but the world is not like that. The trouble is that the public service itself has, in many respects, not done as well as everybody hoped it would. That is why we are having to try to introduce an element of private enterprise to make it more successful. The fact is that noble Lords opposite should think much more carefully about the contribution of the noble Lord, Lord Byers, which absolutely epitomised the argument.
Lord Bellwin: In responding to my noble friend Lord Teviot, may I first confirm what I said I suspected? Most weekly-paid staff are members of the Bus Employees' Superannuation Trust which has some 32,000 members, is fully funded and provides index-linked benefits. But, of course, I will write to my noble friend with further details in that. I was grateful to the noble Lord, Lord Byers, for what he said. He was clearly speaking from much experience. He simply called a spade a spade and that is something which one often tries to avoid doing. But he spelled it out, and that is what the reality of life is all about.
Having said that, I should like to come back to the point which the noble Lord, Lord Mishcon, made. He slightly made my case for me—unintentionally, I am sure, and uncharacteristically—when he expressed his major concern, when there is a transfer to a private business, for the old long-serving employees. Surely, if they are old and long-serving, the chances are that they will be getting closer to an age when they will become pensionable and, therefore, they will have accumulated a very large amount of their entitlement. Although the noble Lord was right to express concern about them, I think that, in practice, they would have less cause for concern than some of the younger people. In any case, I should remind your Lordships that the

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term of a contracted-out scheme would be subject to the approval of the Occupational Pensions Board. That is probably as far as I can go.
In this day and age in the private sector, as everywhere, the whole matter of pensions is a major factor in negotiations about working conditions and so on, just as much as is the rate of pay. Clearly, there will be proper negotiation—I will not say tough negotiation—to reach a proper level. But, at the end of the day, it will still come down to the ability of the company to pay and there one hopes that only rarely will it prove in the long term unable to do so. Seemingly, guarantees for life exist only in the public sector. One can have a philosophical view about that, but that is the reality. I repeat that there is no problem about people up to the time when a transfer is made. The older people have least cause for concern. I do not feel that the younger people even need be concerned at the time when the transaction is struck. It is only potentially in the longer term that we have the concern, and the point which the noble Lord, Lord Byers, so properly made.
Lord Underhill: I am certain that the Committee is grateful for the comments of the Minister, as well as for the points made by the noble Lord, Lord Byers, which I assure him we will take into very serious consideration. What one must have regard to—and this deals with the point of the noble Lord, Lord Mottistone—is that we are not dealing with persons who are made redundant, because of economic problems, or with men who, by choice, have decided to go somewhere else. We are dealing with employees who are affected by a decision of Parliament, which has said that a certain property or subsidiary may be disposed of. The workers have to follow a decision about disposal, because their subsidiary has been transferred to the private sector. That is the problem which we have to consider.
We shall look very carefully at the report of what has been said. This is a human problem which opens up the whole question of whether disposal ought to take place at all, because employees are being transferred from a settled occupation into a doubtful one. It opens up the whole question of whether, when the Secretary of State is considering a transfer, he ought to consider the future of the workers. So it opens up lots of fields. We shall read very carefully the report of what has been said, and decide whether or not we should come back on Report. But I am grateful for the intervention of the noble Lord, Lord Byers, with his experience in this matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.19 p.m.
Lord Underhill Lord Underhill moved Amendment No. 10:
Page 4, line 38, at end insert—
("() A liability to maintain the benefits conferred by the ex-gratia pension schemes of the Bus Company shall be imposed by the Secretary of State by an order made under subsection (1) of this section on any related company to which the employees of the Bus Company subsidiary, who are members of these schemes, are transferred; and any order made for this purpose shall not be regarded as placing a related company in a worse position.").
The noble Lord said: May I formally move this amendment, in order to ask the Minister whether he will confirm that there is no statutory provision in the 1962 Act for the Secretary of State to make an order of this kind? The same points are covered as in the argument on the previous clause. Therefore, I formally move the amendment in order that the Minister can give me an answer on the point. I beg to move.
Lord Bellwin: As the noble Lord is considering this aspect, it might be helpful if I said that the majority of National Bus Company employees are members of one of the company's main pension schemes: the Bus Employees' Superannuation Trust or the National Bus Pension Fund. Employees have been given every encouragement to become members of one of these modern schemes. Some have chosen to remain in old pension schemes which do not provide the same level of benefits. However, it has become the National Bus Company's customary practice to provide some additional benefits under the old schemes by means of ex gratia payments. Similarly, the company have also made some ex gratia payments in respect of periods of non-pensionable service. These payments are made entirely at the discretion of the National Bus Company.
It is possible that a limited number of employees in a National Bus Company subsidiary which is to be transferred to private ownership may be receiving these ex gratia payments. If so, their pensions position would fall to be considered along with those of employees who are members of the modern schemes. I am sure that the National Bus Company would wish to insure that they received equitable treatment, as would trade union representatives. But the Government are not prepared to see a solution imposed by a pension order compelling the related company to maintain payments which are now entirely discretionary, as proposed in the amendment. That might interfere with the pension arrangements considered most appropriate for a subsidiary to be transferred to the private sector and in our own view would certainly be an unjustified interference by the Secretary of State in the affairs of a private company.
To come specifically to the point raised by the noble Lord, the National Bus Company could convert the ex gratia payments into legal obligations before privatisation. Then they would be covered by the order-making power. That is what the noble Lord wanted to ascertain, and I hope that what I have said is helpful.
Lord Underhill: I am grateful to the Minister for his explanation. As the other points which he has made were covered in the debate which we had on Amendment No. 9, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clauses 6 and 7 agreed to.
Clause 8 [Private-sector vehicle testing]:
6.23 p.m.
Lord Underhill Lord Underhill moved Amendment No. 11:
Page 6, line 34, leave out ("any pesson") and insert ("a single non-profit-making organisation").
The noble Lord said: We turn now to Part II of the Bill, which deals with the testing arrangements for heavy goods vehicles and passenger service vehicles and their transfer to the private sector. Although it is the transfer to the private sector which is involved, may I emphasise that on this side of the Committee we are not making this a party issue? In view of the importance of the matter, it is necessary to explain very carefully the issue and its history, in the hope that we might influence some of the many noble Lords who are listening in order to be influenced.
A brief history of the matter was given at Second Reading, and it is very important. In December 1979 the Minister announced the Government's intention to transfer the testing of heavy goods vehicles and passenger service vehicles to the private sector. In August 1980 the Government issued a policy statement. There was immediate opposition from all the operators organisations: the Road Haulage Association, the Freight Transport Association and the Confederation of British Road Passenger Transport. They want the present scheme to continue and say that they have complete faith in the scheme. They believe in its impartiality; they believe in its independence from commercial pressure; and they believe that its testing standards are reasonably uniform throughout the country.
Because of the widespread objections and fears of the operators, the House of Commons Select Committee on Transport decided to undertake an inquiry, which commenced in March 1981. Its report was published in July 1981 and set out the present testing position. There are 91 heavy goods vehicle testing stations, of which some 24 are in rather remote areas. The large figure of 900,000 tests are carried out annually. The position is that most hauliers do not have to travel more than 25 to 30 miles to a station for a test. Some 850 staff are involved—all civil servants—and there are a further 450 staff whose duties include the testing of passenger service vehicles, some 77,000 tests being carried out each year.
The evidence given on behalf of the department and the Government to the Select Committee was that the Government's intention is to split up the 91 heavy goods vehicle stations into chains, that these should be offered on long leases to private sector testing companies and that, where the passenger service vehicles are still tested at the operators' premises—where there are adequate facilities laid down under the 1980 Act—they must arrange to receive the vehicles of other operators, though the actual testing will be carried out by the staff of the private sector company which will take this over.
Rather surprisingly, the witnesses from the Department of Transport told the Select Committee that when they were developing their proposals they had not investigated the arrangements in other countries. Details of some of the arrangements in other countries are given in Appendix 14 to the Select Committee's report. There is only one European country with a number of private testing organisations listed, and that is Belguim. Sweden has an independent, non-profit making body, with the Government having 52 per cent, of the shares. In France, there are Government staff at Government stations. In West Germany, there is an independent, non-profit making body. In
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Holland there are Government test centres. In Luxembourg, there is an independent body in which the Government have 75 per cent. of the shares. In Italy and Denmark, all tests are carried out through Government agencies.
Both the documents submitted, which are given in the Select Committee's report as appendices, and the evidence submitted are very impressive in showing the unanimous opposition of the operators and others to the Government's proposals. In addition to the three main operators' organisations which I have mentioned, the opposing bodies also included the Institution of Professional Civil Servants, the Royal Society for the Prevention of Accidents, the Association of Chief Police Officers, the Society of Motor Manufacturers, the Chartered Institute of Transport and the Association of Metropolitan Authorities—a formidable list to add to the three operators' organisations.
I would refer to the conclusions to be found in paragraphs 79, 80 and 81 of the Select Committee's report. In paragraph 79, we find that the Select Committee concluded:
"We do not consider that the Government has yet justified its contention that private operators, still to be identified, would carry out the annual testing of commercial vehicles better than the current Department of Transport testing stations."
Conclusion 80 reads:
"Until the department bring forward evidence to substantiate their contentions, we believe that the existing system of heavy goods vehicle testing stations should be retained. Meanwhile the evidence leads us to recommend that within the existing system additional services to vehicle operators can and should be provided".
Their final conclusion reads:
"We accept the views of the operators' associations that if the transfer to the private sector does take place it would be preferable for the system to be transferred as a complete unit rather than as a number of chains. We therefore recommend that the Department of Transport continues to explore the possibility of the testing station network being taken over by either Lloyd's Register or by some other organisation of significant standing."
The reference to Lloyd's Register comes under paragraph 75, where the committee says:
"We were particularly interested to hear of the Confederation of British Road Passenger Transport's proposals that the testing role might be transferred to Lloyd's Register. This is an independent, non-profit making society which provides inspection and technical services primarily for ships but increasingly for engineering projects of all kinds".
The response of the Secretary of State was to the effect, "On the question of the benefits of privatisation I think we should have to differ, but he did say that he noted the strong preference in the industry, endorsed by the Select Committee, for the testing network to remain as a single operating unit and he would look into the recommendation of a possible arrangement with Lloyd's Register. As the Secretary of State's response also appeared to indicate that the operators 'organisations had changed their views, the Select Committee was reconvened and once more heard witnesses from the operators' organisations. Without exception, the operators made it clear that they had not changed their views and that they did not want to change from the present testing arrangements, but if the Government were not prepared to move they had to discuss possibilities in the interests of their members. Again we find three important conclusions in the review of that Select Committee. In Recommendation No.18:

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"Our conclusion from the evidence we have now received is unequivocable. Although the Road Haulage Association, Freight Transport Association and Confederation of Passenger Transport all properly accept in their members' interests the need to be realistic and to co-operate in the implementation of the Government's policy decisions, none of these organisations has received any information from the Government or been persuaded by any arguments from the Government which has led them to change their fundamental opposition to the privatisation of HGV and PSV testing."
In Conclusion No. 19, we find:
" On the basis of the more recent evidence we therefore reiterate our view that the existing arrangements for vehicle testing should continue."
In their final conclusion, No. 21, we find—and I will quote just the last few lines:
" On the basis of this most recent evidence, we have concluded that the transfer of the vehicle testing system to a single organisation or consortium is the only solution acceptable to industry, and we believe that the Government's proposal should be amended so as to preclude any alternative solution."
The Select Committee is an all-party committee and there are its recommendations, which endorse what was said by the Select Committee in its first report. Conclusion No. 21, which I have read, is what is proposed in the amendment; that there should be one organisation—a non-profit making organisation.
I wish to stress that the position of Lloyd's has not, I understand, been finalised. We must ensure that, whatever is done, the Bill covers the possibility of other arrangements. The Bill as it stands, and Clause 8 as it stands, would enable the Government to dispose of the testing arrangements to a number of chains if the Government so desired. The industry does not want that. The industry wants a single organisation and preferably a single, non-profit making organisation. That is what the amendment puts down: it is exactly what the operators want and, as the Government are inclined towards an arrangement with Lloyd's, I can see no reason why the Government should not accept this amendment. It is in line with what the Government are trying to do. And, if Lloyd's should fall through, the Government would then be able to work on the basis of one single, non-profit making organisation. I beg to move.
6.33 p.m.
Lord Lucas of Chilworth: I imagine that we are going to speak to and have a general debate on the whole clause when discussing the amendment of the noble Lord, Lord Underhill.
Lord Bellwin: I wonder if my noble friend would allow me to clarify the situation. Am I to understand from the noble Lord, Lord Underhill—who made such an explicit and detailed speech when opposing the amendment—that he too is covering the points made in Amendments Nos. 13 and 14, which I believe is what my noble friend is saying?
Lord Underhill: It was my intention to deal with the matter in the way that I have, in order not to confine myself to the narrow path of the amendment but to deal with the whole question of whether Clause 9 shall stand part of the Bill.
Lord Lucas of Chilworth: I am grateful to the noble
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Lord, Lord Underhill, for that because I think it will be a lot easier in that we particularly want to hear from my noble friend the Minister just what is proposed by the Government. May I start by thanking my noble friend for his very long letter of 23rd June in which he covered a number of points, including that of vehicle testing.
As I said at Second Reading I do not dissent from the historical resume which the noble Lord, Lord Underhill, gave then and to which he has added this evening. Nor can I dispute with the noble Lord some of the figures he has given. The industry has been represented by a number of associations and bodies, although I noted that the noble Lord, Lord Underhill, excluded the Institute of Transport Administration. No doubt he did so purposely so that I could advise your Lordships of my interest in this particular clause, in that I am the president of that institute. That institute also was totally opposed to the removal of testing from the Government side. They made their own survey and came to the conclusion, having made a number of visits—particularly to West Germany—that the West German system was probably the best. It is of some concern that the department can make proposals without having examined the whole range of options.
We are now faced with the proposal that Lloyd's Register Vehicle Testing Association should be the body that will undertake this testing—but as I understand it, the association has not yet been formed and it is in a very embryonic stage. As I understand it, only the most preliminary of discussions have taken place between the Government and this organisation. Where I differ from the noble Lord, Lord Underhill, is that he wants to ensure that the testing organisation is non-profit-making. I do not mind very much if it makes a profit but certainly I do not want it to make a loss. If the Government come along and say that one of the reasons why they want to place the testing with the private sector is that it is a burden on the taxpayer and a job which could be better done elsewhere, then I would say of the former that that is their fault because they are not a very commercial organisation in terms of hours worked and that the fees chargeable are not of a very commercial nature.
I cannot understand why it is suggested in the Explanatory and Financial Memorandum to the Bill, under Financial Effects, that
"The sale price"—
of these stations and equipment, and the cost of transfer—
"would also take account of any loans made under the powers of Clause 12".
I wondered who was going to buy them, anyway. The noble Lord, Lord Underhill, suggested that originally, when all the 90-odd stations were going to be put into groups, long leases would be offered to potential operators. I never believed that they were going to be sold. As I said, I do not know who is going to buy them. If we are trying to get an amount of money into Government funds—£30 million, I think it is—by the sale, I fail to see how that can be achieved by leasing all or some of these stations to one single organisation—particularly if it has to be of a non-profit-making nature.
I will also ask my noble friend if he can tell us any-

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thing more about the number by which those people working in the department will be reduced. The Explanatory and Financial Memorandum suggests that something like 900 posts might be saved. I cannot quite understand that because we must still have inspectors to inspect the new testers, and so on. So, on balance, I find myself a little bit worried because one knows nothing about the system that is to be employed, or the arrangements to be made with the people who, as I understand it, may or may not undertake this work.
The Bill provides only that when the Minister has made up his mind he comes before Parliament with his proposals, which have to be accepted by both Houses of Parliament. I suggest that by the time all that has happened it is probably going to be too late to make objections. So at this particular moment of time I think we are deserving of hearing in far greater detail just precisely what is envisaged and just how far down the road to that objective the Government have so far gone.
Lord Tanlaw: I think we on these Benches would like to have just the same assurances as have been asked for by the noble Lord, Lord Underhill, and the noble Lord, Lord Lucas. I think this is a very important amendment if assurances cannot be given in more precise terms than those used so far. I think the industry itself has clearly shown that it is worried and somewhat depressed by this aspect of Government thinking, but it is prepared to accept it unwillingly if the safeguards are there for the system to operate efficiently and effectively and fairly.
I think the point made by the noble Lord, Lord Underhill, is an important one. If the Lloyd's Register of Shipping, which I am quite conviced is capable of undertaking this work efficiently and fairly, is unable to do this—and the Government have left it in the air—and it is open to an individual organisation or to a number of organisations to do this, this is a very serious matter indeed.
I hope that when the noble Lord, Lord Bellwin, replies we shall not find, as we did in dealing with a similar Bill, the Oil and Gas Bill, that once the doctrine has been peeled away and the principles have been dealt with there is nothing much underneath so far as the thinking and practice has gone, because the Government are breaking new ground with both these Bills. We want some reassurance on this side of the Committee that the Government have thought this matter through. The industry has clearly thought it through and is worried. It has expressed its worry to the Government and to us on these Benches and Members on other Benches. The Government appear not to have responded that they have thought this matter through in depth.
When the noble Lord replies can he also mention the point about the saving on personnel? It may be that 900 could be replaced but we would like some numbers on the inspectorate. Bearing in mind that there will be working at weekends as well, this may mean a doubling up of staff, because you cannot ask people to work seven days a week. I would wonder what the net saving will be if the inspectorate is taken into consideration.
Lord Davies of Leek: If I may intervene briefly, I have listened to the debate, and I also heard some of the Second Reading debate. I would have thought that the paramount problem was safety, and I am sure that that is agreed on both sides of the Committee. When we use the phrase, "approved testing stations" we want to know whether it is private or public or how it may be formed: that it is not a ragamuffins' paradise—that the people within those testing stations are qualified and know their job and have been properly trained in that job. Consequently, whatever argument we are having across the Floor at the present moment, the vital thing is safety, because of the growing importance of transport to civilisation and because of the increasing number of deaths on the roads, which we want to keep down.
I do not want to reiterate everything that has been said, but I think we must keep in mind not just the cost or profit but the safety of the individual, the type of vehicles and the type of people who approve in the testing stations. If I said any more I would be boring the Committee, because the argument is well known on both sides.
Lord Bellwin: It will be clear from the discussion we have had so far that this clause is the most important one in Pal t II of the Bill. It provides for the authorisation of a private sector authority and private sector inspectors to carry out testing. This provides the framework within which we hope to see an improved service for the road transport industry which will maintain the highest standards of safety and impartiality.
Let me at once endorse precisely what the noble Lord, Lord Davies of Leek, has just said: that safety is the first, the foremost, one might say the sole aim of the testing system. Safety has been our first consideration in drawing up proposals for the future of the testing network and in developing the legal framework for the new system. The 18 clauses which make up Part II of the Bill contain a great deal of detailed material which is designed to ensure that a private sector testing system will operate with the consistency, the smoothness and the high standards which are rightly valued in the present testing system. These are the aims which we have in mind and the aims which I know are shared on all sides, as we have just heard.
Moreover, in our choice of the body to take on the testing, I think that we have done all that my noble friend Lord Lucas would wish. Certainly that, I gather, is the opinion of those who have already spoken about the new Lloyd's Register Vehicle Testing Authority; and it will indeed have no connection with the manufacture, sale or repair of commercial vehicles.
However, my noble friend and I gather that those who have spoken in the debate wish us to go further. The amendments we are discussing—and I include Amendments Nos. 13 and 14—seek to write into the legislation a total and permanent ban on any connection between the body appointed to carry out the testing and the motor trade. I do not want there to be any misunderstanding between us on this. Let me again make it quite clear. The Government are every bit as determined as are my noble friend, the noble Lord, Lord Underhill, the noble Lord, Lord Davies, and the noble Lord, Lord Tanlaw—indeed, everyone

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who has spoken and who might well have spoken—that there shall be no commercial pressures on testing. We must have safeguards to make sure that the decisions of testing staff are entirely impartial and are based on safety considerations alone.
Those safeguards already exist within the Bill. If I may remind your Lordships again about these very important provisions, there is the provision in Clause 8 which requires the approval of Parliament, no less, for our choice of approved testing authority. If it is the view of Parliament that the approved testing authority must be a body having no commercial interests that view can be enforced. If, on the other hand, Parliament were to accept that some commercial interest could safely be allowed, there are further powers in Clause 8 to impose conditions which would control the way in which the testing business was managed. It would, for example, be within the Secretary of State's power to enforce a complete separation of management and control between the testing business and any other interests which the approved testing authority might have. We have made it quite clear that we are not contemplating the authorisation of any organisation with commercial interests.
The fact is, however, that the Bill was specifically designed to provide a structure within which commercial interests could be safely controlled. The Government believed, and still believe, that it is perfectly possible to have commercial involvement in testing without incurring the dangers which I know my noble friend and noble Lords opposite are, quite rightly, anxious to avoid. We have, it is true, decided that on balance the best course is to transfer testing to the new Lloyd's Register Vehicle Testing Authority and that is our firm intention. But in taking that decision we are not saying that this is the only good or possible option for the organisation of a private sector testing system. If we amend the Bill in the way being proposed, we should be ruling out for ever and a day any possibility of the involvement of any body with commercial interests. I just do not believe that that is prudent or sensible law-making.
Surely what we need is a legal structure which leaves us and future Governments with the freedom to take sensible decisions in the light of the facts, with appropriate safeguards to ensure that these decisions will not run contrary to our central—and I say it yet again—aim of maintaining safety standards and providing the best possible service to the road transport industry. I believe that we have these safeguards in the Bill, as I have already explained. We accept that the impartiality of testing is vital and our choice of Lloyd's Register Vehicle Testing Authority to take over the testing system is proof of that.
In answer to the point about the negotiations with Lloyds and what happens should they break down, let me say that the position is that there is agreement in principle. The details are being discussed. There is no reason to believe that the matter will not be successfully concluded. I should also say that, if it should prove to be impossible to reach a final agreement, unlikely thought that is—but the noble Lord, Lord Underhill, is quite right in saying that an agreement is not there, it has not been signed, sealed and delivered—then of course the Government will need to review
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the options afresh. I say again that it is a very unlikely contingency and I cannot say what conclusion will be reached. However, the point to which I again draw your Lordships' attention is that, whatever scheme we propose—and surely this is the key point—must be approved by Parliament. Earlier on we were saving how important it is that Parliament should have the last word. Perhaps I may now pray in aid your Lordships' own observations, and I do so by saying: there you have it: you have an indication of the importance that the Government attach to this. In no way am I seeking to skate over or to belittle a point which my noble friend made and the greatly detailed way in which the noble Lord, Lord Underhill, took the trouble to spell out why he was concerned about it. At the end of the day Parliament will have the say as to whether or not anybody other than Lloyds —if that should be the case, although I gather that there is no disapproval of them—would finally be appointed.
We have talked about what would be the proceeds of sale and the numbers of people who would be involved and various other factors. I shall not go into the detail now. I have information here and I can give views on those matters and talk about the 900 people and the point raised by the noble Lord, Lord Tanlaw, about whether there would be a real saving, allowing for the fact that certain overtime and other hours would have to be worked. My information is that that would not be the problem. But, as in all these matters, it is a question of judgment. That is what we are talking about now.
In conclusion, I would say that, if your Lordships will accept from me the Government's absolute commitment to the fact that safety is the first, second, third and last point that concerns us, and if my noble friend, who I know feels very deeply about this matter—because we have talked to him and he has expressed his views with great fervour during Second Reading and I know his background in this industry and must listen to what he says—will feel that what we are trying to do and the way in which we have set it out at present will cover his points, then I should be very pleased indeed if he did not press the amendment.
Lord Mottistone: Perhaps I may put in one word. Would my noble friend the Minister not agree that, if there is a commercial operation, it will tend to make the operating more flexible, which at the moment, I am told by industry, is rather lacking, and that this would be a tremendous advantage, coupled with the various safeguards about which my noble friend has told us?
Lord Bellwin: A qualified, yes, because I have been at great pains to stress that the flexibility here has to be less than one would normally wish to see in something of this kind. Flexibility to the extent that it be not the only single company—certainly I think we must go beyond that. I am anxious here not to stress the flexibility point. I am more anxious to stress the safety factor all the time. It is the ultimate point in this matter. Although there may be the kind of ability to manoeuvre that my noble friend indicated, nevertheless I would want to stress again that it is the safety factor that is all-important here and that it is Parliament that has the say at the end of the day.
Lord Underhill: I am delighted that the Minister has emphasised the safety consideration, because that is what the operators' organisations have been concerned about throughout the whole of their discussions on this particular issue.
There is, of course, another factor involved in addition to safety; namely, the availability of the testing facilities, because obviously, if a public service vehicle has to go some distance taking both the crew to look after it and also taking it off—I almost used a fire service expression—the "run", it will obviously interfere with the PSV service operations. So there is also that factor about how it is to be done.
The Minister made it clear that, although there is agreement, nothing has yet been signed or delivered with Lloyd's Vehicle Testing Authority. That is important because it is why we wanted to get this provision into the Bill—to ensure that if the Lloyd's insurance scheme fell through, the Government would not go running around to a number of different persons who might take over different testing stations, but confine themselves to one organisation, preferably a non-profit making organisation, as do most countries on the Continent, or alternatively to the single body proposed in Amendment No. 12.
Lloyd's is not in the Bill. I am going now by the evidence given by the witnesses of the Department of Transport to the Select Committee and I presume that they were talking on behalf of the Government. The Bill was drafted with a possible view to a chain of testing authorities, not just one. There could be a number of testing authorities. That is what the operators do not want. They do not want a chain of different operators. That is why we were rather concerned that there should be something in the Bill to make it quite clear.
Reference was made by the Minister to the fact that any scheme has to come before Parliament—and we are delighted that that is so—for an affirmative resolution. That, I gather, is for each separate authority. In other words, if the Government decided that they had to have agreements with 12 different testing authorities, a scheme for each one would have to come forward—not a proposal to divide the thing into 12 separate authorities. That is an important consideration. We want to get that issue determined in advance. That is one reason why we have moved this particular Motion. Incidentally, one ought to say that the Under-Secretary of State, Mrs. Chalker, did say in Committee that the plan is not simply one of privatisation but to achieve something important—that is, to reduce the number of Civil Service posts. I say in all sincerity to the Minister that I hope we shall look at this scheme from the standpoint of safety and not as regards the question of the reduction of Civil Service posts. That would be a wrong thing to do and yet that was made clear by the Minister in the other place.
I think that the best thing to do—particularly at this stage when noble Lords may possibly have other matters that they want to deal with—is not to divide the Committee on this issue. There is a big principle involved. I should like to read what the Minister has said and to read what other noble Lords have said before deciding what we shall do at the Report stage. There is a great principle involved. We would not wish the Bill to go through in a form which, if the
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Lloyd's scheme fell down, would allow the Government to feel themselves able to go ahead with all sorts of proposals for a chain of testing stations. But, under the present circumstances, I beg leave to withdraw the amendment while we look at the matter.
Amendment, by leave, withdrawn.
[Amendment No. 12 not moved.]
Lord Sandys: At this stage I think that it may be convenient—
Lord Lucas of Chilworth: I wonder whether the noble Lord the Deputy Chief Whip would agree to take Amendments Nos. 13 and 14 before we adjourn for dinner? I can promise him that they will not take very long.
Lord Sandys: If the noble Lord can do so, I think that it would be for the convenience of the Committee to take them immediately.
7 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth had given notice of his intention to move Amendment No. 13:
Page 6, line 36, leave out ("of or includes") and insert ("solely of").
The noble Lord said: As I promised, I shall not keep the Committee very long. There are one or two areas in my noble friend's answer which have left gaps in my knowledge. I am particularly concerned that if we leave Clause 8 as it stands, there is an inference in line 36 that vehicle testing may be a part of some other operation. It was for that reason that this amendment was tabled.
Secondly, notwithstanding the assurances, which I am happy to accept, I find that where the Bill provides for the exclusion of holders of goods vehicle operators' licences and holders of PSV operators' licences—and I can understand why; it is this competitive and secondary interest element, as well as it being put in in another place—I would want to ensure that the motor industry is also excluded. Quite briefly, when I look back to the 1956 and 1958 debates on vehicle testing in principle, this was the greatest worry that my noble kinsman and others had. That the system has worked reasonably well, I do not doubt, but it is not in the best interests and I would not like the Government, for whatever reason—and there is many a slip twix cup and lip in these matters—to be put in a position of having to go back to a commercial grouping which might include some people in that sector. I believe that it is far better that we get it that much nearer being right now than wait for the regulations to come before Parliament, which, as my noble friend says, has the last word.
There are still a number of questions in my mind, and I thank my noble friend for his generosity in his earlier letter to me. The question of assurances with regard to the number of stations, and the kind of charges that another organisation might make, have yet to be spelt out, or at least the Government's intentions with regard to this have to be spelt out. Therefore, I think it is better that I make these points to my noble friends on the Front Bench now.
However, accepting, what the noble Lord, Lord Underhill, has said, that we have had a good debate on

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the principle of moving the testing stations, I would not want to press a Division now. But I must say to my noble friend, on Amendment No. 14 that I would want a lot of persuading not to ask the House at Report stage, as distinct from this Committee stage, to have a look at that. I have merely spoken to Amendment No. 13. At the same time, bearing in mind the earlier remarks, I shall not move Amendment No. 14 at this stage.
[Amendment No. 13 not moved.]
[Amendment No. 14 not moved.]
Lord Sandys: I think that it may be for the convenience of the Committee if we take the dinner break now and return for further consideration of the Committee stage of this Bill no earlier than 2000 hours With that in mind, I beg to move that the House do now resume.
Moved accordingly and, on Question, Motion agreed to.
House resumed.

Woolworths (Aberdeen Development) Order Confirmation Bill
Brought from the Commons; read a first time, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have read a second time and reported from the Committee.

Forfeiture Bill (formerly Relief from Forfeiture Bill)
7.5. p.m.
Report received.
Clause 1 [The "forfeiture rule"]:
Lord Mishcon Lord Mishcon moved Amendment No. 1:
Page 1, line 8, at end insert—
("(2) References in this Act to a person who has unlawfully killed another include a reference to a person who has unlawfully aided, abetted, counselled or procured the death of that other and references in this Act to unlawful killing shall be interpreted accordingly.").
The noble Lord said: My Lords, this amendment to Clause 1 would add a new subsection. It is thought likely on the authorities that the forfeiture rule applies not only where the offender himself has done the unlawful killing, but also where he has aided, abetted, counselled or procured the death. This would also cover cases of aiding and abetting, counselling or procuring a person to commit suicide contrary to Section 2 of the Suicide Act 1961. Clearly, if the court can grant relief under this Bill to a person who has actually killed, then it should also be able to grant relief in this class of case as well, assuming of course that the forfeiture rule would or might be applied in such a case. The new subsection therefore ensures that no lacuna would be left here. I beg to move.
The Lord Advocate (Lord Mackay of Clashfern): My Lords, the Government are content with the drafting of this amendment, as with the drafting of the other amendments that the noble Lord will propose at this Report stage. As your Lordships know, the Government are neutral on the principle of the Bill. Therefore, I have nothing to add to that.
On Question, amendment agreed to.
Clause 2 [Power to modify the rule]:
Lord Mishcon Lord Mishcon moved Amendment No. 2:
Page 1, line 9, after ("that") insert ("the forfeiture rule has precluded").
The noble Lord said: My Lords, may I immediately say to the noble and learned Lord the Lord Advocate that, again, I am most grateful for his benevolent neutrality and for all the help that he is giving, his department is giving and the noble and learned Lord the Lord Chancellor is giving in regard to this Bill, despite that neutrality.
With your Lordships' leave, perhaps I might conveniently deal with Amendments Nos. 2 to 5. As at present drafted, Clause 2 does not make it entirely clear that the Bill can have effect even where the offender has died—as sometimes happens, of course, the offender has killed himself shortly after realising what he has done—and it is someone else who is seeking to claim through him. This group of amendments—Amendments Nos. 2 to 5—removes the present tense from Clause 2(1) and makes consequential amendments later on in the clause, which remove any implication that the offender himself has to be still alive at the time of the proceedings for an order under this clause. I beg to move.
On Question, amendment agreed to.
Lord Mishcon Lord Mishcon moved Amendments Nos. 3, 4 and 5:
Page 1, line 11, leave out from beginning to ("from") in line 12.
Page 2, line 10, leave out ("acquire") and insert C' have acquired").
Page 2, line 22, leave out ("acquire") and insert ("have acquired").
On Question, amendments agreed to.
Lord Mishcon Lord Mishcon moved Amendment No. 6:
Page 2, line 38, at end insert—
("(6A) The court shall not make an order under this section modifying the effect of the forfeiture rule in respect of any interest in property which, in consequence of the rule, has been acquired before the coming into force of this section by a person other than the offender or a person claiming through him.").
The noble Lord said: My Lords, this, of course, deals with a transitional point that I ventured to mention at the previous stage of the Bill. I hope that this new subsection is self-explanatory. Its effect is that, where interests have already passed before the commencement of that sub-section, those transactions cannot be reopened. The commencement of the subsection is the criterion here rather than the passing of the Bill, now that we have brought in a three-month delay before the provisions come into force.
If I may talk to them very quickly, the remaining amendments to Clause 7 simply tidy up subsection (4). I shall, of course, formally move them when we get to Clause 7.
On Question, amendment agreed to.
Clause 7 [Short title, commencement and extent]:
Lord Mishcon Lord Mishcon moved Amendment No. 7:
Page 4, line 36, leave out from beginning to ("may") and insert ("Subject to section 2(6A) of this Act an order under section 2 of this Act or an order referred to in section 3(1) of this Act and made in respect of a person who has unlawfully killed another").
The noble Lord said: My Lords, as I have already explained, these remaining amendments to Clause 7 simply tidy up subsection (4). I beg to move.
On Question, amendment agreed to.
Lord Mishcon Lord Mishcon moved Amendment No. 8:
Page 4, line 38, leave out from beginning to end of line 39, and insert ("the coming into force of those sections.").
On Question, amendment agreed to.
Lord Skelmersdale: My Lords, in the absence of a 24-hour clock, I beg to move that the House do adjourn during pleasure until eight o'clock.—(Lord Skelmersdale.)
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.10 until 8 p.m.]

Transport Bill
House again in Committee.
Clause 8 agreed to.
Clause 9 [The testing and surveillance functions]:
Lord Underhill Lord Underhill moved Amendment No. 15:
Page 10, leave out lines 15 to 18 and insert—
("The Secretary of State may by order prescribe such further functions (whether conferred by or under any existing enactment or not) being functions which appear to him to be connected with any of the functions described above, but shall exclude the transfer from the Department of Transport of the function of monitoring the standards of an approved testing authority.").
The noble Lord said: At present, various staff of the Department of Transport have authority for all the testing and monitoring, in fact the entire procedure, for this particular type of vehicle testing. Clause 9 sets out the functions to be transferred to an approved testing authority, and all these are listed under the various Acts on pages 8, 9 and 10 of the Bill. However, as noble Lords will see on page 10, the final paragraph headed "Further Functions" reads as follows:
"Such further functions (whether conferred by or under any existing enactment or not) as may be prescribed, being functions which appear to the Secretary of State to be connected with any of the functions described above".
This would seem to be a rather sweeping paragraph,
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particularly in view of the use of the term, "connected with".
In the Committee stage in the other place, the Minister said that monitoring will continue and that the national supervisory staff will make sure that standards are maintained, and said,
" that is why it is fully expected that the Government would need to retain the inspection staff".
All this is not in the Bill, and in view of the paragraph on Further Functions, this amendment seeks to insert a definite safeguard. It will be noted from the amendment that what we are endeavouring to do is to lay down quite clearly that any further functions that the Secretary of State might wish to transfer under the final paragraph of this clause shall exclude any functions which deal with the monitoring of the standards of an approved testing authority. We believe that that should not be by just ministerial statement; it should be written into the Bill so that that will remain with the Government and the Department of Transport. I beg to move.
Lord Bellwin: I am pleased to say that I am in full agreement with the noble Lord, Lord Underhill, on the point he has made. The supervision of statutory testing should be carried out only by the Department of Transport's officials—the Bill was in fact amended in another place to make this absolutely clear. Perhaps I could refer your Lordships to Clause 10(11), which in lines 26 to 30 categorically rules out the supervision of an approved testing authority's examination by anyone who is not an officer of the Secretary of State. Under this provision, private sector inspectors may only supervise examinations carried out by their own employer as part of his own internal management.
If it is felt that there is some deficiency in the provision in subsection (11) then I should be glad to consider the matter further, and if there is indeed a shortcoming in it, to introduce an amendment at a later stage. I believe on looking at that subsection of Clause 10 that we shall be able to agree that there is in fact no difficulty in this area. But, even so, if that is the feeling, we shall look at it again in case something needs to be done. Perhaps with that the noble Lord may feel able to withdraw his amendment.
Lord Underhill: I shall be happy to beg leave to withdraw, and I am grateful to the Minister for drawing attention to that. As he proposes to look at the wording and we shall do the same, that will be satisfactory, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 9 shall stand part of the Bill?
Lord Underhill: There are one or two points on Clause 9. Can the Minister give some assurance that, whatever may be the final decision on the testing authority, or authorities, there will be a uniformity of charges throughout the country? At Committee stage in the other place the Minister said that no doubt cross-subsidisation will continue even if there were a number of separate chains. I wonder whether that is still confirmed. Although the Government are looking at the possibility of a single agency, or single

615
authority, through Lloyd's, the question arises as to how that would be achieved if there were going to be a number of separate chains throughout the country.
Will there be uniformity of conditions of employment for the authorised inspectors and the approved assistants both for the HGVs and the PSVs? It would seem that there could be different functions for separate approved testing authorities. The Minister drew our attention to the fact that under Clause 8(9)(b) a document has to be presented to Parliament for a resolution of approval, but if there were to be separate testing authorities could it be that we would have one authority being given certain functions within the terms of the Bill and another authority being given rather different functions in the terms of the Bill? In that case how would the other functions which may be excluded from the document for one particular authority be handled? If the Minister can answer those questions I shall be grateful, but if he cannot I understand why he may have to write to me.
Lord Bellwin: I think I can give the information to the noble Lord, but it may be necessary to write to him to elaborate on it. To his first question, the uniformity of charges, the answer is, yes, and cross-subsidisation will continue. I gladly confirm that again. As the noble Lord says, the clause defines the limits of private sector testing and lists the functions which may be transferred to the private sector. Within the limits set by this clause, the Secretary of State can decide what exactly should be done in the private sector and by whom. But if, as we intend, the testing system is transferred to the Lloyd's Register Vehicle Testing Association, then all the functions listed in this clause will be transferred to them. As I have a great deal of information here which I think the noble Lord would like to have to enable him to look at the matter in more detail, rather than go over it now I would suggest writing to him, and then he can always question it again later if necessary.
Lord Underhill: I am grateful to the noble Lord. Clause 9 agreed to.
Clause 10 [Provisions supplementary to section 8]:
Lord Underhill Lord Underhill moved Amendment No. 16:
Page 14, line 2, at end insert—
("(13) The Secretary of State may make orders with respect to the provision of pensions by any person authorised to conduct a business which consists of or includes any of the functions specified in section 9 of this Act, for or in respect of persons who are transferred from the Department of Transport to employment with an approved testing authority under the provisions of section 8 of this Act.").
The noble Lord said: The purpose of this amendment is somewhat similar to that of the amendment we dealt with on the question of pensions for persons who are transferred from the National Bus Company. Therefore, I shall not go into it in detail because it may well be that the arguments will be precisely the same as we had on that occasion. This concerns the position of civil servants who will presumably be transferred either to the Lloyd's register or to whatever authorities there will be, because they are skilled people versed in this work and this is their full-time job.
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We understand from statements by Ministers and also the Memorandum preceding the Bill that at least 900 people will be involved. Are there any arrangements proposed for pensions for these people when they are transferred? If not, this is a matter we shall have to consider along with the consideration being given to the transfer of personnel from the National Bus Company. I beg to move.
Lord Bellwin: As the noble Lord, Lord Underhill, rightly said, many of the points that need to be raised in connection with this matter are very similar to those we were discussing earlier, but so far as the Civil Service is concerned, perhaps I could give some information which the noble Lord might find helpful in considering his position in the matter. As with the other pension matter, we all want to see fair and reasonable provision made for the future pensions of testing staff after they leave the Civil Service.
However, we are here talking about whether there should be a provision included in Part II. The staff at the HGV testing stations will be transferring to a new employer in the private sector, and we have already referred to the agreement which has been reached with Lloyd's Register for the formation of a new authority to carry out testing. That authority will make provision for its staff's pensions in the future. The principal Civil Service pension scheme, which was often cited during discussions in another place, contains full and detailed provisions concerning the important question of how pension rights accumulated over past years can be preserved or transferred when an individual leaves the service. Provision for future pensions, earned with the new employer, will be covered by the rules of whatever scheme the staff join. All employers are free to set up pension schemes for their employees, and the establishment of new schemes is a common event, and this does not need the kind of order-making power which the amendment proposes.
All the provisions here are made for specific purposes. I think it is true to say that non of the precedents concerns the transfer of civil servants currently within the principal Civil Service pension scheme to an independent private sector employer. The scheme contains rules about what happens when someone leaves the service, either voluntarily or on redundancy. It goes into great detail about the question of preservation of pensions and pension transfers. As regards the payment of pensions by the new employer, the Social Security Pensions Act 1975 and other relevant enactments provide a carefully worked out structure of rights and obligations which is ample to ensure that proper provision is made. Within that framework, pension arrangements are a matter for negotiation between employers and workforce. Even where we have thought it necessary to take order-making powers, as in Part I of the Bill, the Government have made it clear that we have no intention of using these powers to dictate pension terms to a private sector company and its workforce.
I hope I have made it clear that the Government have no objection in principle to making legislative provision about pensions. But equally, we see no point in encumbering the statute book with provisions which are not needed. On the substance of these issues, I do not think there is any significant difference between us;

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we all want to see proper pension arrangements made for the staff. The question is: What is the best approach? We think that, as it stands, this is the best approach; but this is a matter for the noble Lord to consider
Lord Underhill: I am grateful to the Minister for explaining the situation clearly, though it still leaves the position confounded because it links up with the debate we had on pensions for the National Bus Company staff. While their present entitlements will be safeguarded by the schemes to which the Minister referred, their expectation—on which at present they rely, bearing in mind that they are being transferred from the Civil Service possibly without any desire to be transferred—is different and those individuals are in rather a predicament. We understand, from the quotation I gave from the Under-Secretary's remarks, that one of the purposes of the scheme is not purely one of safety, but to save 900 Civil Service posts. That was an unfortunate statement to have made. In consequence, those 900 persons may find that their future pensions are not what they thought they would be had they stayed with the Civil Service. This is an issue we shall have to link with the consideration being given to the NBC's pensions position. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 agreed to.
Clause 11 agreed to.
Clause 12 [Investment by the Secretary of State in Government controlled company interested in former Government testing stations]:
8.15 p.m.
Lord Underhill: moved Amendment No. 17:
Page 14, line 28, leave out ("on such terms and") and insert ("provided the interest payable shall not be less than the average of the clearing banks' base rate of interest prevailing at the time and on such other").
The noble Lord said: This amendment has been occasioned by the provision of subsection (1)(a) which will enable the Secretary of State to make loans to any company interested in taking over a Government testing station. I appreciate that the paragraph continues:
" on such terms and conditions as he may with the consent of the Treasury determine".
We have in mind some of the unfortunate incidents which occurred as a result of the sale of Amersham International, where the total fees and commission were some £2.8 million; but we need not go into the history of that matter, about which your Lordships have heard on a number of occasions.
It is surely unusual that the Government should make provision in a Bill for loans to be made to persons to take over their undertakings or services. In another place the Minister said that loans would be to the initial company to be set up by the Secretary of State to facilitate the disposal, and would be made only to a company in which the Secretary of State had a controlling interest. I cannot understand the reason for this provision. I may be wrong, but I cannot
618
recall such a provision in previous Transport Bills, at least not in those with which I have been involved from this Dispatch Box. Is there a special reason for it to be in this measure, and in connection with the transfer of testing stations?
The purpose of the amendment is twofold. First, it is a probing amendment—to ascertain why this has been done; and secondly, it is to obtain an assurance from the Minister that if there is a good reason for it to be done, then, as the amendment says, a proper rate of interest should be charged. The Under-Secretary said that Clause 12 may not be needed at all if the agreement with Lloyd's comes to fruition. But we are not faced with there being a definite agreement with Lloyd's or of having anything drawn up. Therefore, as with the other provisions concerning testing, we must be ready for any eventuality. I therefore hope that the Minister will explain the reason for this provision and will give an assurance that a proper current rate of interest will be charged.
Lord Misheon: It might be helpful if all the points to be made about the amendment were made before the Minister replies. As my noble friend Lord Underhill said, this is a somewhat unusual provision. I do not want to deal with the principle of the matter—he has already done that—but to ask a few questions, because at present I do not understand the situation. First, while I may be wrong, I see no definition in the Bill of what is a controlling interest. I know what the definition is in other measures; it is a question of holding, as a rule, 51 per cent. Merely leaving the situation, as in the Bill, as "controlling interest"—so that one could argue later that really you do not control a company unless you own over 90 per cent., so you can deal with any question of acquisition, or over 75 per cent. so you can deal with extraordinary and special resolutions—seems insufficient.
The second point that arises—I believe it is not just an eccentric point—is that the amazing situation exists where, taking it for granted that it is 51 per cent., the Government lend for the benefit not just of the 51 per cent. shareholder, the Government, but also for the benefit of the 49 per cent., who may be somebody quite different from Lloyd's. We do not know who are the owners, the transferees, of the property. That may be an acceptable position, but as I read the clause at the moment—and this is relevant to the amendment—I am not quite sure what happens if the Government cease to hold their controlling interest. Is the guiding factor for the timing of the loan and for the enabling provision to make the loan, that at the time when the loan is made the Government have to have the controlling interest'? Further, does the loan become immediately repayable if the Government cease to hold a controlling interest? That is certainly not clear under the Bill.
However, without any question of doubt the Committee may feel that in any event, since this is public money, one ought to ensure that a proper market rate of interest is chargeable. I hope that the noble Lord the Minister will think it appropriate to answer both of those questions which, if I may say so with respect, should not come to him as being unexpected, since this matter must be within the meaning of the clause itself. Either the clause means what it says, or it does not mean what it says.
Lord Bellwin: It always means what it says. Whether we understand it and interpret it in the way that we would want is another matter; that always applies. First, there is the question: Why do we need the power to lend to a Government-owned company? It was originally proposed that testing should be transferred to a Government company for an interim period, allowing time to prepare for the testing stations to be sold to the private sector in a number of chains. Loans would be made to the Government company in order to allow it to buy the testing stations from the Secretary of State. These would be repaid when the company received the proceeds of the sale to private sector companies.
In fact, there is unlikely to be a need for the interim company, or for the lending provisions in Clause 12, if, as is now expected, testing is transferred to Lloyd's. Lloyd's will almost certainly take over the stations as a going concern, and therefore there will be no need to reorganise the network during an interim stage. But the clause is retained in case agreement is not reached with Lloyd's, as was mentioned earlier. If that were to happen, our Government-owned company could provide the best means of transferring testing out of the department while alternative arrangements were considered. It is also just possible that negotiations with Lloyd's Register might change course, and that they will come to prefer an interim stage before LRVTA is set up. But of course all of that is still very much subject to what I said just prior to dinner—that everything has to have parliamentary approval in any case. So there is no danger that, if for any reason negotiations fail or change course, there would suddenly be imposed an organisation with commercial interests and so on. That is not a worry so far as I am concerned.
I shall later come to the points that the noble Lord, Lord Mishcon, made. In the meantime I hope that I can reassure the Committee about the use which could be made of the powers in Clause 12 and that I can show that the proposed amendment is not really necessary. First, I must emphasise that, by virtue of subsection (2) of the clause, the power to make loans can be exercised only in relation to a company in which the Secretary of State has a controlling interest. The power could not be used to make loans to a private sector company which had acquired, or was about to acquire, an interest in testing. I think it very important that that be clearly understood. The powers in Clause 12 are therefore effectively restricted to the Secretary of State's own interim company, if such a company is in fact set up. When the testing stations are transferred onwards to the private sector, the loans will be repaid by that company. The effect would be to defer the net benefits from the sale of the testing stations until the company transferred them to the private sector and repaid its loans from the proceeds. If, as I gather from what the noble Lord, Lord Underhill, said, the concern behind the amendment is that loans might be made to private companies at advantageous rates, I can assure your Lordships' Committee that the Bill would certainly not allow such a thing, and that therefore there is no need of an amendment to make sure of that.
The noble Lord, Lord Mishcon, asked, what is a controlling interest? May I respectfully refer him to
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Clause 12(8)(b), which states that, for the purposes of the clause, a controlling interest,
" is one in which the Secretary of State holds a controlling interest if more than one-half of its voting shares are owned by the Secretary of State or by nominees on his behalf".
I hope that that will cover the point.
The noble Lord referred to loans benefiting the minority shareholders. That is quite right. As the Bill is drafted, that would be the effect in regard to loans which are not immediately repayable if the Government cease to have a controlling interest. But perhaps we could look at that again. I think it is an interesting point that the noble Lord raises, and perhaps we ought to look at it to make sure that it meets exactly what we are seeking to do.
Lord Mishcon: I am most grateful to the noble Lord the Minister for giving way. I should like at once frankly to confess that, though I looked for it, I had not seen in the clause the definition of controlling interest. I readily concede that it is contained in subsection (8)(b), but I make the point—not by way of excuse for my having overlooked it—that it—is always convenient to have the definition of a controlling interest roughly where the controlling ',is first mentioned in the Bill, and I am afraid that on this occasion I missed it.
I should like to ask the noble Lord the Minister a question. It is always unfortunate if there is written into a Bill a power which one knows is not likely to be exercised, or will be exercised only in certain circumstances, and there is nothing to limit the power. Is the noble Lord the Minister prepared to give an undertaking that the clause will be used by the Secretary of State only for an interim company in the circumstances that the Minister has mentioned? That would relieve some anxiety. However, if the noble Lord is not able to give the undertaking, I would point out that the power is there, and the mere fact that he says that he thinks it would be used only for the purpose mentioned is not sufficient.
Lord Bellwin: I think that I can perhaps help with that point. I said that the powers in Clause 12 are restricted to the Secretary of State's own interim company only if—and I stressed this—such a company were set up. That should perhaps assuage the noble Lord's concern on that point, but I said a few moments ago—did I not?—that we could perhaps consider the other point that he raises. We ought to be sure that we have it absolutely right, and I certainly undertake to consider it.
Lord Airedale: The place where I looked for the definition of "controlling interest" was Clause 25, which is the interpretation clause for this Part of the Bill. The clause defines a "business", and I should have thought it worth considering whether it would be advisable to include in the clause a definition of "controlling interest", since I think that is where people would look in order to find it.
Lord Bellwin: I am most grateful to the noble Lord. Perhaps we may consider that; indeed, I undertake to do so.
Lord Underhill: I am grateful, and I am certain that my noble friend is also grateful, to the Minister for giving an assurance that he will look at the particular phrase with which we are concerned. I do not want to detain the Committee unduly, but before we depart I should like to mention one question which interests me in particular. Why do we have this provision in the Bill? There is provision for interim companies in the Transport Bill 1981, now the Transport Act. There is a provision there for disposal of British Rail subsidiaries. If my memory serves me correctly—and I apologise if I am wrong—I do not think that the Transport Act contains provision such as we have here for loans to an interim company. Therefore, I query why in this case it is thought necessary to have provision regarding loans made to an interim company in which the Secretary of State has a controlling interest.
Lord Bellwin: I am not sure that I can expand further than I did previously on this point. As I said before, it was originally proposed that the testing should be transferred to a government company for an interim period, allowing time and so on; and clearly it is felt that this is desirable on this point. I confess that I cannot go into more detail now, but it has certainly been considered that this is now necessary. If the noble Lord wishes, I will certainly go further into the matter with him, too, if necessary, and perhaps that may be the right way for us to proceed at this time.
Lord Mishcon: I hope I am not being a pest to the Committee, but will the noble Lord, at the same time as he is courteously looking into that, also look into the question of why it has to be a company with a controlling interest by the Government? One would have thought that if it were an interim company it would be a company that was owned by the Government. I cannot quite see who would be the other shareholder. But, as I have said, I am not going to detain the Committee on that, if he would be kind enough to look into that issue as well.
Amendment, by leave, withdrawn.
Clause 12 agreed to.
Clause 13 [Exclusion of security of tenure in case of premises used for vehicle testing business]:
8.32 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 18:
Page 16, line 3, leave out from ("where") to ("are") in line 6 and insert ("the property comprised in the tenancy is or includes premises which, in accordance with any agreement relating to the tenancy (whether contained in the instrument creating the tenancy or not)").
The noble Lord said: This is a technical amendment to put right a deficiency in Clause 13(1) which was pointed out in another place. I should say at once that I think it most unlikely that the provisions of this clause will ever be needed, given the Government's intention to transfer testing to an independent and non-profit-making body under the control of Lloyd's Register of Shipping. We believe it is right, however, to provide a proper legal framework for control of the new testing system by the Secretary
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of State. In an area so important to safety, nothing should be left to chance.
Against that background, the provisions of Clause 13 ensure that the Secretary of State would be able to regain possession of testing stations quickly and without fuss if an approved testing authority were to be in breach of the provisions of its lease, or if at the end of the tenancy the Secretary of State thought it right to appoint a new authority to do the work at that site.
It was pointed out in another place, however, that the provisions of Clause 13 might not bite if the premises were not used solely for vehicle testing but also included, for example, an area used for the sale of spare parts. Clearly it would be absurd for the Secretary of State to be unable to repossess essential, specialised facilities simply because a small part of the site was also used for some other purpose. This amendment puts right that potential anomaly. I beg to move.
Lord Mishcon: With great respect to the noble Lord the Minister, I wonder whether this has been thought through properly and fairly. The original provision, as unamended by this proposed amendment, said (and I understood it perfectly well) that if a site consisted purely and simply of a testing station and it was the subject matter of a lease, then at the end of that term there should be no security of tenure. I understood subsection (1) quite well, and it seemed sensible.
What this amendment now says is not only that there should be no security of tenure but, as I understand it, that Part II of the Landlord and Tenant Act should not apply to those premises which might include a testing station. The noble Lord the Minister gave an example of where a very small part of that site was made up of some shop that sold spare parts; but we are drawing a Bill (and we have to envisage all possibilities) and we do not know who the testing station authority, if I may call it that, may be.
In those circumstances, what we are saying is this—and it is going to make it terribly difficult both for the tenant and for the Government in their letting negotiations. This clause—which now says two things in separate parts of it—says that no question of compensation for goodwill in the parts of the premises which might be on the site will be available if there is no renewal of the lease. The Government will not be liable to compensate anybody, and therefore the question of subletting, so far as the testing authority is concerned, is going to be very difficult.
The other thing that I should like the noble Lord the Minister to consider—and again I am trying to think in terms of the ease of the letting and of the negotiations—is why it is that the normal provisions should not apply, and why it is that if, for example, it is alleged by the Government (and the fact that this is the Government as the landlord does not make considerations of justice fly out of the window) that rent is about 14 days overdue through some error, it could in fact forfeit under the strict terms of the lease without the lessee having any opportunity to apply, as any other tenant is able to do, for relief from forfeiture on the ground that it is quite unjust in the circumstances. It could in fact be a sheer omission

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on the part of the Post Office, for all one knows, that the remittance did not arrive.
Secondly, the clause says that if there is any breach of covenant there shall be no relief against that at all. If the Government merely say, "You have breached the covenant", that is the end of the matter. That is something which is not thought to be just in any landlord and tenant situation where normal circumstances apply. I am not raising only an academic issue. If one knew now who the testing lessee (if I may call him that) or the testing authority was, I do not think any of us would be really troubled about this; but we do not. We do not even know what sort of sites or areas we are talking about. Therefore, to insert this provision in this way, as amended, especially, seems to me to be a matter which deserves our consideration and that of the Minister.
This is not the sort of debate to start at this hour of the night, and subject to what my noble friend Lord Underhill has to say as regards my point as well as his own I would have thought that, having made the points, the sensible thing to do would be to ask the noble Lord the Minister whether he would be kind enough to consider them and possibly correspond with the noble Lord, Lord Underhill, and myself and anyone else who may be interested in these particular matters; because they do deserve consideration. It may well be that, as I said, a debate on this matter at the present moment is not the most suitable way to get that consideration.
Lord Lucas of Chilworth: I wonder whether my noble friend would allow me to say this. While I am quite happy to accept the sense of my noble friend's proposal of this amendment, he said one or two things which sent a few tremors through me. For example, he spoke about it being only a testing station. Of course, one might want to reserve a position for another authority. I recall from some two or three years ago. when we were looking at the chain system, that some of these sites are highly desirable pieces of property. Most of them are sufficiently large to be in excess of the testing site requirement. Earlier, when we were discussing the broad principle of this matter under Clause 8, we talked about "the other commercial interests". These are the ripples that are running through my mind.
I am sorry to say that the adjournment came at a time when I was hoping to extract a little more information from my noble friend with regard to Lloyd's—how far they had got along the road. What he has revealed now, some hour or so later, suggests to me that we are such a long way away from doing a deal with anybody. I can see just that which I do not wish to see: the business of a testing station, with its environs, being sold. That is what we are trying to do—get rid of it; put it on to another authority in the private sector.
Now we have this other complication, that it may not be Lloyd's; it may be another authority; we may carve up the site; some other activity may happen, and if the Government fall out with the testing part of the other commercial activity they can fire them and get the site back. It seems to me that, although this is Committee stage, we ought to be having a Third Reading debate. I am sorry that there may be some depressing news for many of your Lordships in about five minutes' time, but I think we ought to get more of
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these things resolved here in Committee. This is the stage at which we should be finding out about these things. I am now very worried about how far the Government have got with their negotiations with Lloyd's and what kind of tenure Lloyd's are likely to have; because, frankly, if it is another authority, and they fail in any other parts of this Part of the Bill, they get fired; the contract is not renewed, in simple terms. They lose everything. Or do they not? I do not know.
It seems to me that we are putting provisions in the Bill to preserve a position which we cannot yet recognise, but we have a half feeling behind us that it might arise because we have not got far enough down the road with the main principle of the transfer of testing from the Government to the private sector. I ask my noble friend whether he could reassure me; I am not quite so worried about my noble friends.
Lord Bellwin: I thought I had been able to give reassurance to my noble friend and others. We have agreed in principle. We are down the road, much further than my noble friend intimates, and now we are dealing with the nuts and bolts, the details. I cannot say tomorrow or next Monday. I do not know. I will try to firm it up as best I can and be in touch with all who are interested in this point, to give them the most information I have on that matter. But there is no cause that I know to consider other than that this agreement is going forward.
I was glad to hear the concern that the noble Lord, Lord Mishcon, expressed to ensure there be no injustice in terms to a tenant. I would very much endorse that philosophy. The fact is that the provisions in Clause 13(1) are intended to ensure that a testing station could be repossessed if a tenancy expired or if there were a breach of covenant by the tenant. I understand what the noble Lord says when he says he does not want to see any (what would be) unnecessary advantage taken of a tenant in such circumstances. I understand that point. We are anxious to ensure that time-consuming procedures laid down by the 1954 Act should not mean that specialised test facilities would be unavailable and continued provision of testing services could be difficult.
This is a special situation we are catering for. While the noble Lord is right that we must be sure that we do not breach the basic principles of landlords and tenancies of this kind of premises, nevertheless the kind of situations which we envisage are rather special. We could not be without a facility for this kind of testing for any undue period of time. The noble Lord put it fairly: that we had better look and make sure and get the answers set up in the way he has put them so as to be able to satisfy him; and if we cannot, he will know we are not always able to do it but it is proper that we should look at the points he raised. I undertake to do that.
On Question, amendment agreed to.
Clause 13, as amended, agreed to.
Clause 14 [Consultation with representative bodies]:
On Question, Whether Clause 14 shall stand part of the Bill?
Lord Underhill: I have one question to ask the Minister on this clause. Subsection (1) says:
"… the Secretary of State shall consult with such organisations appearing to him to be representative of persons engaged in the road transport industry as he thinks fit".
At the Committee stage of another place there were a number of amendments put forward to include various local authority associations, to include various operators' bodies and to include trade unions. The question I have to ask is this: What is the interpretation of "engaged in", "persons engaged in the road transport industry"? Would that cover not only the operators but the trade union organisations representative of persons employed? Does the term "engaged in" include employed in?
Lord Bellwin: I would say that it did include the persons in the categories the noble Lord mentioned. That would be my answer. If it should prove otherwise, I would be in touch with the noble Lord. My interpretation now is, yes, it would include them.
Clause 14 agreed to.
Clauses 15 and 16 agreed to.
Clause 17 [Alteration of plated weights for goods vehicles without examination]:
8.48 p.m.
The Earl of Avon The Earl of Avon moved Amendment No. 19:
Page 19, line 24, leave out from ("the") to ("of") in line 25 and insert ("cancellation of any such certificate and the issue in place of it").
The noble Earl said: This small amendment improves the procedures laid down in Clause 17 for the alteration of plated weights on goods vehicles. It has the effect of allowing us to cancel the existing plating certificates and issue a new document, instead of having to amend the old one. Amended certificates can be hard to read and it may be difficult to distinguish between a certificate which has been officially altered and one which has been falsely amended by an unscrupulous operator. Issuing a new certificate is an altogether clearer and more efficient way of dealing with alterations to plated weights. I am sure members of the Committee will agree with me. I beg to move.
On Question, amendment agreed to.
Clause 17, as amended, agreed to.
Clauses 18 to 25 agreed to.
Clause 26 [Fixed penalty offences and fixed penalty notices]:
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 20:
Page 27, line 20, leave out ("Subject to subsection (3) below,").
The noble Lord said: We now move to Part III of the Bill which, in some respects, is slightly less contentious in that it does not have the party political overtones that Parts I and II had. In moving Amendment No. 20 I should advise your Lordships that this amendment, with Amendments Nos. 22, 36 and 46, paves the way for Amendment 50 to Clause 32. This looks fairly complicated but it is reasonably
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simple in that, taken together, these amendments remove. from the Bill the proposal (which some of us have discussed and found to be objectionable) that a constable should be able at the roadside to have the right to inspect the whole of the driving licence of an alleged offender for any moving vehicle offence, or any other offence involving a vehicle, when he is proposing to issue a fixed penalty notice.
If your Lordships go back a few years to the old style licence, you will remember that it was a little red-covered book. When it was handed to the policeman it was easy for him to flick it open to the rear and see the endorsements stamped thereon. This was held to be an unauthorised action that usually happened by accident. It was held to be an objectionable practice because it might or might not have influenced the constable in his subsequent decisions. When we redesigned the licence there was a firm intention to remove this probability. Under Section 161 of the 1972 Act, the constable is only empowered to see the name and address of the holder, the date of issue and the authority by which it was issued. He can see no further than that.
Now we are, under the proposals for the fixed penalties, allowing the constable to ask for the licence and make a full examination. He will thereby see whether there are any endorsements. A quick and mentally agile constable can work out whether, if he gives a certain warning of prosecution, if the prosecution is upheld in court the person may lose his licence. The constable may on the other hand equally find out that the alleged offender may not lose his licence. All this would be coloured by his knowledge of a previous situation.
Indeed, I understand that, in court cases involving motorists, the case is normally heard, the decision is made by the magistrates as to whether the person is guilty or not guilty and then usually the magistrates ask the question, "Is anything known?" Then the previous history comes out. This enables the magistrates, the bench, to determine the level of punishment.
Under the Bill as it now stands, we have removed that from the court. We have put the entire decision as to what punishment shall or shall not be levied upon a constable. Whether constables or drivers, they have the frailties of all humans and can be influenced. This amendment removes that power.
If the Committee agree with me and these amendments are carried, the first official to inspect any endorsement detail on a licence will be the clerk dealing with the fixed penalty offences. He is very far removed from the scene of the incident, so he can look at it with a certain amount of detachment. The licence is given to the fixed penalty clerk together with the penalty slip. On examination, the clerk may find that penalty points that would be awarded as a result of the alleged offender accepting that he has committed an offence and will accept penalty points will take him into an endorsable and disqualification situation. The clerk could return the notice and the payment and tell the driver that an ordinary court hearing can be arranged. The licence could be retained by the court so that nothing untoward happened there.
We are talking about fixed penalties as a means not of creating new punishment but of easing the burden on the courts. I understand that in 1980 about

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30,000 drivers were disqualified under the automatic totting-up procedure, the old three endorsements procedure. Even in the unlikely and unhappy event of all those drivers having their fixed penalty notices and payments returned, this would be quite a small number in relation to the some 500,000-plus that it is estimated are going to be taken out of the prosecution process.
This proposal contained within this amendment was endorsed by the interdepartmental working party report. This is on page 16. I do not in fact have the report with me. It certainly means that there could be a probability that an alleged offender opts for the fixed penalty and then finds himself in the position of having a court case by virtue of the penalty points exceeding 12. It would seem to me that that situation should not arise at the roadside. It should arise in the calmer atmosphere of an office and then, if necessary, in the court. That is the purpose of this rather complicated series of amendments. In truth they are fairly simple: the policeman does not have the right to see this which may or may not make up his mind.
There is perhaps the emotional aspect of policemen.
Most of us law-abiding citizens experience a little qualm when a policeman approaches us. We wonder what we have inadvertently done wrong. We have a long way to go in this Bill to talk about relations between the motorist and the policeman. Anything that can be done to remove any possible cause of friction between the constable and an allegedly offending motorist should be done. As the Bill stands now, I believe that this could be a source of some slight contention. I should like to see this provision, as embodied in my amendment, accepted by the Committee. I beg to move.
8.58 p.m.
Lord Underhill: I had better explain the procedural difficulty in which the noble Lord, Lord Lucas, and I find ourselves. I am certain other noble Lords in the Committee are also in this difficulty. It will be noticed that this first amendment, which is a paving one, is in the names of the noble Lord, Lord Lucas, and myself. We had intended to deal with two different sets of consequential and subsequent amendments. The noble Lord, Lord Lucas, has explained that the purpose of his paving amendment is primarily to introduce Amendment No. 22, which will take out subsection (3), whereas I wanted to introduce paving amendment No. 20 in order to introduce Amendment No. 21 which deals with some of the points contained in subsection (3).
The advice that I have been given is to point this out and not speak in detail on the points involved in Amendment No. 21 and nine other consequential amendments, but to defer that until we reach Amendment No. 21. It is merely to say that I have no particular disagreement with the points raised by the noble Lord, Lord Lucas, except that, when we come to Amendment No. 21, the Committee will see that my amendments and the consequential amendments go rather further.
The Earl of Avon: In speaking to this amendment,
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I should also like to speak to Amendments Nos. 22 and 46, 50 and 52 and, I believe, 53, 54 and 55. I think my noble friend Lord Lucas mentioned No. 36, which I believe has now fallen. In looking at this group of amendments and what they seek to achieve, I can see two things which may make them seem attractive to the Committee: first, the apparent simplicity of the system that would be left, and, secondly, the abandonment of the need for the police to inspect the driving licence, either at the roadside or at the police station. I hope to be able to persuade the Committee that these advantages are illusory.
To take the last proposition first, my noble friend Lord Lucas has made much of an objection that it is not appropriate for a police officer to inspect and take possession of the licence. The fear has been that seeing the licence will, in some way, prejudice the officer and alter his approach to the driver. May I reiterate what I said on Second Reading, that there will be no obligation on the driver to show the officer his licence, and that in asking to see it the officer will have explained why he wants to see it. He will, too, have already decided in principle that the offence could appropriately be dealt with by fixed penalty, and the only reason for him to change his mind on seeing the licence will be the discovery that the driver is ineligible, because of the points already on his licence.
In a case dealt with at a police station, again the driver will be under no obligation to show and surrender his licence, and the officer inspecting it will be concerned only to make sure that the driver is eligible to receive a fixed penalty. Therefore, I do not think we need show so much concern as has been expressed about this procedure. I feel that we are going some way towards helping the driver here, because many law-abiding drivers would rather have their licence inspected and get the fixed penalty over with, rather than go to court; and it is this option which we are giving them. My noble friend talked about friction with the police. I am a more or less law-abiding citizen and I do not understand why anybody should be afraid of showing his licence to a policeman. After all, what is there to fear—
Lord Mishcon: I ask the noble Earl the Minister to be kind enough to let me intervene, in order to clarify at least my mind. I thought there was always a duty when any offence is committed to produce the licence, either to the police officer who took up the question of the offence, or, if it was not then available, to the police station. The noble Earl said that there was no need for it to be produced to the officer, and that if the citizen concerned who is alleged to have committed an offence did not want to do so, he need not produce the licence at the police station. I do not understand.
The Earl of Avon: The noble Lord is very happily reinforcing my point, which is that there is no real change in what we are expecting, and that the fear which has been expressed that you could be asked to produce a licence under this system is not a real one. There is no real change. You can still deny having your licence and then take it to the police station at another time, to show that you have it. Perhaps I may develop my argument a little more, because there is quite a lot of it.

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Looking at the issue from the other viewpoint, the administrative angle, it cannot be denied that, on the face of it, for the driver to send his licence direct to the clerk, since it has to go to him ultimately anyway, would seem to be a saving in time and trouble for all concerned. This is not entirely the case. True, the police would no longer have to handle the licence. The work for the justices' clerk, however, would be increased: he would have a duty to scrutinise and interpret every licence that he received. We have, of course, already provided that a fixed penalty clerk will be able to send a licence back to the Chief Officer of Police, if he happens to notice that a fixed penalty notice has been issued in error, but this is quite different from requiring him to check every licence. So in this case, we would simply be transferring work from the police to the clerk.
Furthermore, since the police would not be acting as a filter at the roadside and ruling out those cases which are ineligible on points, the clerk would actually be receiving a great many more licences than he would under our system. I simply cannot see the point in his having to inspect and send back a great many licences which are ineligible, when the whole process could have been done by the officer at the roadside. I would also have thought that this would seem disappointing, time-wasting and pointless to drivers who had hoped to receive fixed penalties then and there.
The clerk will also have the additional work which will arise when people misunderstand the system: inevitably, some people will send in licences but no payment, or vice versa. What is the clerk then to do? There is likely to be strong pressure for the clerk to reply immediately explaining the mistake, so that a person could correct it before incurring the extra one-half penalty for administrative costs after 21 days, but this, in its turn, would place a burden on the clerks.
The amendment next suggests that where a person is ineligible for a fixed penalty notice, the clerk should return the payment to the offender and the offender would then be informed that the normal process of prosecution would be initiated. This, too, is not nearly as simple as it sounds. I am not quite sure whom my noble friend intends should tell the driver that he will be prosecuted instead, but the implication is that it should be the clerk. This, however, would be outside his proper role. A fixed penalty clerk is not the prosecutor; the police are. Where a person is ineligible, it would therefore be necessary for the clerk to return the payment and inform the police, who would then have to decide whether to prosecute or to use their discretion to drop the case. To make this decision, it would probably be necessary for the police to see the licence, so the clerk would have to send this to them with his original notification. If the police did decide to drop the case, they could return the licence to the driver. But if, as is more likely, they decided to prosecute, the licence would then have to be sent back to the clerk for him to send to whichever court would be hearing the case. I hope the Committee will see from this that this amendment, though apparently simple, is, in fact, likely to involve quite as much administrative work as what we have proposed, and probably more.
But my main anxiety about the amendment is more fundamental. The Committee is, I think, well aware
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of the background to this legislation—the review of road traffic law, which had as one of its main concerns the failure of the fixed penalty system to deal effectively with unlawful parking. The system has fallen into such disrepute—and we have discussed this a number of times—that people do not pay the penalty, in the hope that it will never be enforced against them. By doing nothing, they can escape the consequences of their illegal action. One of the most important innovations in the Bill is the introduction of what is called "contracting out"; that is, that the fixed penalty system will operate in any case where a fixed penalty ticket has been issued, unless the driver takes positive action to "contract out" of the system and ask for a hearing. If he does nothing, he knows that the penalty will eventually be registered and enforced as a fine. This is a crucial tightening up in the effectiveness of the system, and my noble friend's amendment would undermine it.
It would be all too easy for a person to accept a fixed penalty notice at the roadside, and then do nothing about it. The fixed penalty clerk would receive from the police a copy of the notice, but after 21 days, if neither licence nor payment has come along, he would then have to inform the police that there had been no response, and the police would have to issue a summons in the normal way. To the supporters of the amendment this may sound not unreasonable, but remember how many cases we are dealing with here: potentially some 800,000. For every case where the police have to revert to normal prosecution, the time spent issuing the ticket at the roadside, sending the paperwork to the clerk, checking the tickets issued against payments and licences received and informing the police of the result is wasted time; it would actually increase the cost involved in dealing with such a case. And this is intended to be a system which saves the police and courts' time.
Meanwhile drivers may feel encouraged by their experience as parkers to hope that the enforcement system will become so overloaded that it will not catch up with them, and will deliberately fail to follow up fixed penalty notices. So the vicious circle that we have seen on parking tickets begins. Even honest drivers may find that the need to do something positive to obtain a fixed penalty notice may tip the balance of advantage, and in many cases I fear that inertia would prevail. So a system which is designed to benefit all the parties in the criminal justice system may end up by being under-used. I stress "all the parties". I cannot believe that the Committee would wish this to happen.
All in all, therefore, I hope the Committee will feel unable to accept the validity of the apparent underlying purpose of this amendment. I cannot help but feel that my noble friend's apparently innocuous and calmly expressed variation on what we propose would have very serious consequences indeed for the effective working of the fixed penalty system. I look forward to hearing further discussion on this point.
Baroness Macleod of Borve: Having tried very hard to assimilate the eight pages of the Bill which are given to fixed penalties, and having listened to mn noble friend the Minister, the fog I am in is even thicker than it was before. Before he sits down may

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I ask my noble friend whether the on-the-spot fixed penalty notice will be given only for offences which carry neither points nor endorsement? There still are some, but there are not very many. It seems to me that if one has to go through the rigmarole of the fixed penalty notice by the roadside and then send away one's licence and everything else which my noble friend has described to us, it will take up a lot of people's time and, therefore, money, and there will be many differences between the penalties, the awards, the various criteria—however well the Ministry set them down—by which the clerk will adjudicate on somebody's licence. I am not in favour of it, but I wonder whether the Minister can tell me whether the object is that these offences should carry neither points nor endorsements if a police officer stops a person for a fixed penalty notice?
The Earl of Avon: May I put the Committee straight on that point immediately, because it is an important issue. It will cover both points and endorsements. That is why we are getting in 800,000, otherwise we could not hope to get in such a number. Once a police officer has decided—for instance, about speeding —that he wants to see the licence, if it results in too many points he will have to take it back up the tree because he will be unable to deal with it then and there by means of a fixed penalty.
Lord Brougham and Vaux: Having listened to my noble friend Lady Macleod of Borvc, I find myself in agreement with her. I have tried to go through the eight pages in the Bill which deal with fixed penalties. Having listened to what the Minister said and to his reply just now, I am even more confused. He is now saying that a police officer will look at the licence and then send the licence higher up because it has got so many points on it.
Viscount Mountgarret: I apologise to my noble friend Lord Lucas and Lady Macleod of Borve for the fact that I find myself totally unable to agree with the amendment which has just been moved. I should have thought that anything which would ease the procedure of justice through the courts in order to prevent the back-log of matters which ought to be regarded almost as de minimis but which have to be looked at by lawyers, ought to be welcomed. If a motorist commits a simple offence, to which this clause relates, it should be a comparatively simple matter to slap a ticket on the window and tell him to get on with it. I do not agree with my noble friend who has just spoken, about a constable looking at a licence and thinking that because the driver has got a couple of endorsements on his licence he will slap a ticket on him. That is totally wrong. I do not believe that officers in our police force think like that, and I do not believe that they would want to think like that. The fact of the matter is that other countries have a fixed penalty system. If you do something wrong, that is it and there is no argument about it.
Lord Brougham and Vaux: That is not quite the point I was getting at. I was getting at the police constable noticing that a driver has so many penalties
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already that he will send the matter higher up. It is not a question of dealing with it on the spot.
Lord Mishcon: If I am looking solemn at the moment it is only because I have heard a score and it does not fill me with excitement. That is the only reason why I am looking solemn.
May I just ask the noble Earl a question while we are trying to clarify our minds on this issue? In answer to my question on my reading of the Bill, I understand that if a police constable finds that the points on the licence before him do not add up to such an amount that if this offence was added to it, the court would have to suspend the driver, then the police constable can adjudicate in the sense that he can make it a fixed penalty offence. Am I right so far? The noble Earl has indicated that I am.
Does this not introduce an entirely new system which some of us may feel to be unjust? If I, the motorist, find myself confronted by a police constable who is alleging that I have committed an offence and I do not think that I have, if I go to court and the court finds I am guilty, then I get an endorsement. That means that not only do I not have a clean licence but also I have some points against me. However, if I "give in" to the police officer in spite of the fact that I do not think I have committed the offence, presumably I get no endorsement and I have nothing to fear over the points. If this be wrong, then I believe it ought to be made entirely and absolutely clear at this stage that at the time of the administration of the fixed penalty, there would be an endorsement clearly put upon the licence, either at that stage or subsequently—so that I am in the same position as if I had appeared before the court. What I have done is to get rid of an awful lot of administration and waste of time. Can the noble Earl make this point clear?
9.17 p.m.
The Earl of Avon: Basically, if one has a clean licence then one has nothing to worry about. If a police officer looks at the licence he can act on the spot. If one's licence has too many points, which will take one over the limit, then obviously the police officer cannot adjudicate. If one does not have one's licence on one or does not want to show it, then one can go through the procedure as per normal; one can still ask to go to court. This is an additional process to the law and it does not in any way stop anybody from taking the matter to the court, to have an argument about whether he is guilty or not guilty.
Lord Mishcon: I plead guilty to one thing right away; I have not made myself clear to the noble Earl, for which I apologise. I was asking about the endorsement procedure. Take it for granted, and the noble Earl would, that I have a clean licence; that I want to keep it clean and I know that if a matter goes to court I will have an endorsement. If I "give in" to the fixed penalty notice even though I do not believe I am guilty, will I or will I not have an endorsement on my licence? If I will, who will do it?
Lord Lucas of Chilworth: I wonder if I could just help the Committee? It is my understanding that notwithstanding what may be on the licence, if the offence is one

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which carries either an obligatory or a discretionary endorsement, then it does not matter what one says to the policeman because it goes to the higher authority. Perhaps I can just tell the noble Lord, Lord Mishcon, and my noble friend Lady Macleod of Borve that I want to move on to that aspect in a much later amendment. What concerns me now is the fact that sight of the licence may induce the policeman to do a number of things.
Your Lordships may perhaps have heard of people being stopped for an alleged offence and that during the course of the discussion the policeman may have said, "Just be a bit more careful in future". If, however, he has in mind that a fixed penalty might be better than a warning and asks for the licence and sees that you have already been a naughty boy and got nine points up, and, though we are dealing with a technical speeding offence, another three points are going to carry you to the limit and you will be disqualified, he may say, "Ha, this will teach him even more". That is really what lies behind this amendment.
Since I am on my feet, in a vain attempt to answer some of the questions, I must say that my noble friend Lord Mountgarret's support is disappointing. I think he talked about de minimis. We will come to that also. You see, there arc no degrees; that is one of the great tragedies in the system. We have argued this to my certain knowledge on three Transport Bills. Speeding is speeding. There arc no grades of speeding, apparently. We are not talking about de minimis at all. We are talking about an offence.
When my noble friend says that this fixed penalty notice will remove a lot of the aggravation and remove a lot of the work from the system that has failed to deal with the parking ticket, there is no reason why it should. If the policeman gives a fixed penalty notice, he does not take any cash. Your licence is clean, and you just get a notice to pay some money within x days. Similarly, if a parking warden puts a penalty notice on a windscreen, it says you will pay a penalty, I think it is £6, to such and such an authority within so many days. My noble friend says thousands have been getting away with it. They do not pay any regard to this. What makes him think they are going to pay any regard to the fixed penalty notice, the piece of paper, other than that, if they do not pay within the time, there is a half fee fine that will go on top when the authorities finally catch up with them? The only people who catch up with the offenders are policemen. It cannot be done by the clerk; he is not a prosecutor. On failure to pay, the matter goes back to the police, and the police take action. So I do not think that that holds water at all.
The noble Earl also spoke of the great problems of parking. We are not talking about parking alone; we are talking about offences involving a motor car; speeding is probably the main one, but it might be going up a one-way street; it might be failing to stop at a policeman's sign; it could be one of 40 things which are set out in Schedule 1. So it is not just a simple matter.
I do not believe that the vast majority of people are going to understand this. It is all very well to say here in Parliament, in the other place and in your Lordships' Committee, that it is fairly easy to follow. Some of my noble friends have not been able to follow it. I think it is very difficult. T do not believe this ends up
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at the end of the day with a driver choice. He can accept the penalty for certain things. He can pay up and shut up—the point the noble Lord, Lord Mishcon, makes. He can, for the sake of convenience, deny himself a fair shout in the court and just pay up and shut up, or he can go to court, if he has a clean licence, to defend his action. He will probably go for the former, particularly if he feels that the policeman has not decided that that is the penalty inflicted on the spot without prejudice to his previous record. This is what lies behind this amendment. It really is simple.
Viscount Mountgarret: May I come back in reply to my noble friend Lord Lucas, or would it he more convenient for the Committee if my noble friend the Minister would like to reply to what the noble Lord, Lord Mishcon, said earlier? I want to refer to my words "de minimis" —my noble friend Lord Lucas took me up on them. I am afraid that I stick by those words. The offences that arc listed under Schedule 1, which are suggested as being fixed penalty offences, are, frankly, de minimis. There is no argument about it. If one breaks the law, that is it.
I see no reason why an offender should not have a fixed penalty imposed upon him without going through all the ramifications and so on of going to a court of law. It is very silly. A great deal of valuable time and a great deal of the valuable experience of people in the courts will be taken up arguing about whether there was a breach of pedestrian crossing regulations or using a vehicle in contravention of street playgrounds. It is quite wrong. If you know what the law is, you stick by it. If you do not do so, you are dealt with accordingly. I regard the offences listed in Schedule 1 as being comparatively de Minimis.
The Earl of Avon: It seems a long time ago that the noble Lord, Lord Mishcon, and I crossed swords right at the beginning about the surrendering of the licence. Although he did not think that he was speaking on my side, I rather thought that he was—
Lord Mishcon: I was.
The Earl of Avon: Oh, good! I am glad to hear it. The noble Lord is quite right, of course. Under the present law the driver has five days to produce a licence. Let me try once again to explain about the fixed penalty.
Let us begin by saying that this is another option which is open, and therefore everything can go on which is going on at the moment. There will be no obligation on the driver to show the officer his licence before the officer makes up his own mind what he is going to do. In asking to see it, the officer should, under the Bill, explain why he wants to see it. He will have already decided in principle that the offence could appropriately be dealt with by fixed penalty, and the only reason for him to change his mind on seeing the licence will be the discovery that the driver is ineligible because of the points already on his licence—that is to say, that he will go over the limit on points. If he so discovers, he must then have the licence sent up to the fixed penalty clerk who will make the necessary endorsement.
In a case dealt with at a police station the driver will be under no obligation to show and surrender his

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licence and the officer, should he inspect it, will only be concerned to make sure that the driver is eligible to receive a fixed penalty and that means that he is not going over the top. I have tried to put the matter more clearly. I see that I still have not helped the noble Lord, Lord Mishcon.
9.28 p.m.
Lord Mishcon: The noble Earl the Minister has tried with his usual courtesy to answer me. If I am to blame—and I repeat this—for not making myself clear, then I apologise both to him and to the Committee. I had hoped that this was the question that I had asked. The Minister has said that fixed penalty notices can be issued in respect of endorsable offences. That is principle No. 1. Principle No. 2 is this: I have a clean licence. The question, therefore, of going over the points does not apply at all. I produce my clean licence. The officer smiles upon me and recognises me as being a good user of the road and says, I still allege that you have committed an offence: I am going to give you a fixed penalty notice". I, the driver with a clean licence, am confronted with the following problem. If I say, no, to the fixed penalty offence I invite a prosecution, a summons; and on receipt of that summons if I turn up in court and a magistrate does not find in my favour, I have for the first time in my life an endorsement on my licence. That is a very serious matter, for example, to someone who is earning his livelihood as a driver. On the other hand, if I surrender to the blandishments of the officer, in spite of the fact that I think the allegation is unjust, I then accept the fixed penalty notice. I think that that is an injustice if of course, and only if, I am told that if I take the fixed penalty notice, I do not get an endorsement. I ask the Minister to say that. If I do get an endorsement, I ask him to tell me from an administrative point of view who makes the endorsement. I have taken my licence back; the officer does not have it. Is he supposed, on the road, to write in an endorsement? That is the question that I have asked and to that question I have had no reply.
Lord Teviot: Before my noble friend replies to the noble Lord, Lord Mishcon, on the question of parking offences, they are usually fairly straightforward. You must know when you are guilty and when you are not, or usually you must. After all, there is a single yellow line which means that you cannot park between 10 and 6 on Monday to Friday or Monday to Saturday.
Lord Mishcon: I do not want to interrupt the noble Lord, Lord Teviot, but the hour is getting late. I have not been talking about parking summonses or notices. We have always had that; we have it now. I am talking about the new procedures.
The Earl of Avon: I wonder whether I may try to answer the noble Lord, Lord Mishcon, because I think that he was more or less right the whole way up his family tree, except about the endorsement. If you agree with a policeman on the street, he will give you a fixed penalty ticket. You send up your licence with that fixed penalty ticket and you will get the same endorsement as you would if you were found guilty
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under the other system. So I do not think that there would be any injustice. Even after you have received the fixed penalty, it is still up to you to contest it in a court if you so wish. This is another method that has been included.
Baroness Macleod of Borve: I am sorry, but the noble Lord, Lord Mishcon, gave the Committee to understand that he is always very good and carries his licence. Most people do not. Then what happens?
The Earl of Avon: It is no different from what happens under the present law. Under the present law the motorist has to produce a licence in five days.
Viscount Cross: Briefly, I support the amendment of the noble Lord, Lord Lucas, for the reasons that he has given. May I also ask whether the problem might not be solved by the police officer fining the offender on the spot?
The Earl of Avon: I think that that would be a terrifying complication which I should not like to enter into at this stage.
Lord Lucas of Chilworth: There is obviously still quite a lot of confusion here, and I think that some of the confusion may be eased as we progress. Certainly, fixed penalty notices can be issued for endorseable and non-endorseable offences. That seems to me to be totally and absolutely wrong. I regret to tell my noble friend Lord Avon that I am not totally satisfied with his answer. Quite frankly, I am tempted to ask the Committee whether his view or mine obtains.
On the other hand, we have in front of us another amendment, and my reading of that amendment is that it goes a good deal further than mine. Therefore, rather than have the issue prejudged—that is, the amendment of the noble Lord, Lord Underhill, prejudged—which it would be were Ito ask the Committee to decide, I think it would be fairer to the Committee if I ask your Lordships' leave to withdraw my amendment, and therefore the series of amendments, reserving to myself the opportunity of bringing it back at the next stage in the light of what we might discuss in this subsequent series of amendments to be moved by the noble Lord, Lord Underhill. In this way, it will in no way prejudice the debate in this matter. Under those circumstances, I beg leave to withdraw my amendment.
Lord Mishcon: Before that amendment is withdrawn, may I say that I have had another look at the Bill, and I know the Committee will pardon me and not think that I keep on intruding upon the discussions, because we have to get one thing absolutely clear. The noble Earl the Minister gave me the information that he had received from those who are briefing him. I know he would always want to explain things most clearly to the Committee, but I now find on looking at the Bill that the answer he gave is not truly accurate.
We are dealing with two questions of endorsement. One is discretionary endorsement and the other obligatory. I understood that the answer that I had been given was that in respect of all matters of endorsement this would be done in fact when the licence was

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sent in. That cannot be right in regard to a discretionary endorsement. I still maintain my position, that if I am the innocent motorist I stand the chance in court of the court exercising its discretion against me and endorsing, whereas if I give in to the police officer and say, "Here is the fixed penalty", I do not run that risk.
Why should I be able to escape from a risk on one count whereas the person who wants to go before the court cannot? Worse still, is it not a complete injustice—and I repeat this—that I should be tempted to give in to the officer, even though I do not think I have committed the offence, because I am anxious to avoid the question of what may be an endorsement in a discretionary case? If there is somebody who is able other than a court to put on an endorsement even though it be discretionary, I again ask the noble Earl if he would kindly tell us who is the person who is so authorised, and what things would he take into account on the question of discretionary endorsement.
The Earl of Avon: The point system included in these fixed penalties is only obligatory endorsements.
Lord Mishcon: But not on the question of points, I point out to the noble Earl. Forgive me for being such a pest, and I say that openly to the Committee, but I must get this clear in justice to myself and other members of the Committee who are not clear. I am on the point of a discretionary endorsement. If I go to the court thinking that I am innocent of the alleged offence, I find that I have a risk, in regard to certain offences, of the court endorsing my licence and exercising their discretion in that regard. If I give in to the policeman on the fixed penalty notice in regard to a discretionary endorsement offence, I presumably get no endorsement at all because there is nobody who can exercise the discretion.
Therefore, in spite of the fact that I think that I am innocent, I am tempted quite obviously to pay the fixed penalty even though I am innocent, because I know then that nobody can put an endorsement on my licence because there is nobody there to exercise a discretion. I am either right or I am wrong, and it has nothing to do with points.
The Earl of Avon: My understanding is that all discretionary endorsements must go to a court.
Lord Brougham and Vaux: May I back up the noble Lord, Lord Mishcon? On page 28 subsection (4) says:
" A constable may not affix a fixed penalty notice to a vehicle under subsection (2) above in any case where the offence in question appears to the constable to be an offence involving obligatory endorsement."
Lord Mishcon: The Bill says, if I may say this to the noble Earl, "obligatory endorsement". Therefore, the answer that he has given, I know by being briefed and therefore it is not his fault, is that you cannot have a fixed penalty notice if there is a discretionary endorsement. But the Bill does not say that. It only says it in the case of an obligatory endorsement.
The Earl of Avon: I think we are still all right, but we are doing it in different terms. It is only what my
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noble friend said: that is, on the fixed penalty, on the fixing. If I may, I should like to look at what the noble Lord has said because we are going round in knots at the moment.
Lord Lucas of Chilworth: It really seems to me, having moved the amendment, that we have received a lot of promises, we have a lot of talking to do, and I did suggest that we might want to come back to this. It seems to me a good idea if I beg leave to withdraw the amendment at this time.
Amendment, by leave, withdrawn.
9.40 p.m.
Lord Underhill Lord Underhill moved Amendment No. 21:
Page 27, line 29, at end insert—
("() Where a constable gives a person a fixed penalty notice under subsection (1), or affixes a fixed penalty notice to any stationary vehicle under subsection (2), of this section and the fixed penalty is paid in accordance with this Part of this Act before the expiration of the twenty-one days following the date of the notice or such longer period (if any) as may be specified in the notice—

(a) no person shall then he liable to be convicted of that offence or be treated as having been so convicted; and

(b) where that offence is an offence involving obligatory endorsement, no person shall then he liable to any disqualification or endorsement in respect of it under Part III of the 1972 Act or be treated as having received any such disqualification or endorsement.").

The noble Lord said: I hope that, having moved this amendment, we shall not find ourselves in the same confusion as we were with No. 20, which was also intended to be a paving amendment to this one. If No. 21 and its consequential amendments were accepted, on Report we should have to adjust the measure in the light of No. 20 so as to put everything in order. I shall, in moving No. 21, speak at the same time to Amendments Nos. 25, 41, 62, 63, 64, 65 and 66, which also entail the deletion of Clauses 33 and 34.
On Second Reading, it may be recalled, I said we should need to look carefully at all the clauses dealing with fixed penalties, as I had grave doubts whether fixed penalty notices should attract endorsements and penalty points, and that is the subject raised in this amendment, which would add a new subsection (3), the effect of which would be to restore the law to its present position so that the proper payment of a fixed penalty notice would not count as a conviction. It also provides that if a fixed penalty notice for an endorsable offence is properly paid, the motorist's licence will not be endorsed with particulars of the offence and penalty points.
The new subsection which the amendment proposes is based on the existing Section 80(2) of the Road Traffic Regulation Act 1967 which, with the rest of Section 80 of that Act, is repealed by Schedule 6 to the Bill. I will not read the whole of Section 80(2), because it covers 12 lines, but the amendment seeks to put all that back in to this measure. That would continue the present law where a motorist pays his fixed penalty points in the prescribed way and then his liability for that fixed penalty offence is not treated as having received a conviction or endorsement.
The purpose behind this part of the Bill, we have been told, is to simplify motoring offence procedures, and I believe the position would be considerably improved if all endorsable offences were dealt with by

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the issue and proper payment of a fixed penalty notice and did not attract endorsement or penalty points on the driving licence of the offender. In support of the amendment, I contend that any offence dealt with by a fixed penalty should not involve the expensive administrative procedures of endorsement, the levying of penalty points and the associated record-keeping envisaged in the Bill. Once a fixed penalty has been paid, that should be the end of the matter. I must emphasis, however, that if the offender comes before the court for non-payment of the fixed penalty, the penalty points procedure should apply as if the matter has been dealt with summarily in the first place. If the case comes before the court, the offender will still run the risk of having his licence endorsed.
In accepting the extension of the fixed penalty procedure, which we recognise will greatly ease the administration of the courts, I feel sure it will be clearly recognised that it is not a judgment about the appropriateness of the penalty to the offence; it is a rough and ready convenience—a point which my noble friend Lord Mishcon has been making clearly. Thus, the substance of this series of amendments is to remove from the fixed penalty procedure, if a notice is properly paid, all question of conviction, endorsement and penalty points. I will not go into the reasons for the consequential amendments which involve a certain amount of detail. The deletion of Clauses 33 and 34 would be entailed because they relate to the endorsement of licences without hearings and to licence receipts. Therefore, if Amendment No.21 were carried, we could not leave Clauses 33 and 34 in the Bill. I beg to move.
The Earl of Avon: Perhaps it would be helpful if I speak at this stage, and then get shot down from all sides. The effect of the noble Lord's amendment is that endorsable offences which were dealt with by the fixed penalty procedure would attract a fixed fine, but no penalty points. If the same offences were reported for prosecution and dealt with by the courts, they would attract a fine to be decided by the courts and the number of penalty points appropriate to the offence. The Government's proposal is that endorsable offences should attract penalty points, whether they are dealt with by the fixed penalty procedure or by the courts, and I should say straight away that we regard the noble Lord's proposal as being not merely a modification of our proposals, but as putting forward something which is fundamentally different.
The purpose of the fixed penalty system is to provide a convenient procedure for dealing with a case where both sides agree that it can be settled out of court. It is advantageous to the police and the courts because it saves time and work, and it is advantageous to the motorist because he knows what the penalty will be and he knows that the fine will probably be somewhat less than he would receive if he went to court. It is basically a procedure to help improve the administration of justice, but it also helps the motorist. All we are doing in the Bill is to try to bring about a further improvement by extending the procedure to a wider range of offences.
The noble Lord is proposing something slightly different. He is proposing a restructuring of the system of road traffic offences, which we carried out to some
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considerable extent in last year's Transport Act. He is proposing a two-tier system for endorsable offences, under which they would in some cases attract points, and in others not. The division is to be based not on any specific criteria, but solely on the method of procedure for dealing with the case. I believe that this whole approach is open to a number of objections. To start with, it would place unacceptable responsibilities on the police, because they would be deciding not merely whether a case could he dealt with out of court, but whether the motorist should, or should not, receive penalty points. I think that that would be wrong in principle because it would bring the police into the area of sentencing policy, and difficult in practice because it would make the roadside transaction a much more momentous one. For every motorist who was glad that he had been given a fixed penalty, there would be others who would be indignant that they had not.
I believe also that there could be problems later on. If a motorist were given a fixed penalty and later decided that in his opinion he was not guilty of the offence at all, he would be in a difficult position. If he accepts the fixed penalty, he gets no points. If he contests the case in court, he risks getting more points for the offence. In order to seek to establish his innocence he would, therefore, be forced to play a risky game of double or quits. Conversely, the motorist who is taken to court might feel that, while he was guilty of the offence, the seriousness of it was not such as to warrant penalty points. If such a defence were permissible—and I am not sure whether it would be—we should surely he in danger of increasing the number of contested cases in the courts and thus negating the benefits which the new system is designed to bring about.
Therefore, the Government do not want to agree with the concept of a two-tier system where the criterion for deciding the tier that an offence is in is based on the method used for processing it. We also have very serious reservations about some of the practical consequences. As the noble Lord will know, the overwhelming majority of offences to which the extended system would apply would be endorseable offences. They account for well over three-quarters of the 800,000 which could potentially be taken out of the courts. We envisage that in the great majority of these it should be possible for a fixed penalty to be both offered and accepted. If that is so, we should achieve our objective of helping to reduce the burden on the police and the courts, but that would not be at the expense of reducing the effect of the law and adversely affecting road safety, because penalty points would still be given in all cases.
I presume that the noble Lord, Lord Underhill, must be contemplating the use of fixed penalties on as wide a scale as we are, otherwise we should not achieve the same administrative benefits. But, if he is, then he would be removing endorsements from road traffic offences on quite a scale, and that could reduce the effectiveness of the law and have serious road safety consequences. I doubt very much, for instance, whether persistent speeding offenders are going to be effectively deterred by what amounts to no more than a monetary caution—and the richer they are, of course, the less effective would be the deterrent, which is something it would be difficult for your Lordships, perhaps, to propose.

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I think, therefore, that the noble Lord, Lord Underhill, is really inviting the Committee to take a slight leap in the dark. It is one which the Government could not recommend the Committee to take, and I am quite sure that many others, including the police, would feel likewise. The Government resisted these self-same amendments when they were discussed at an earlier stage in the Bill's proceedings in the other place. I hope that in my explanation I have made my remarks more clearly than I did on the previous amendment, and that the Committee will be with me in resisting this amendment.
Lord Mishcon: The Committee will realise the breadth of mind that exists on the Benches behind me, as well as the fact that this is a completely non-political matter, when I rise in order to say that I personally agree with every word that the Minister has said; and although, as he very well knows, I have the greatest of respect and, indeed, affection for my noble friend Lord Underhill, I do not myself think that this is a just or proper amendment, for the very reasons that the Minister gave.
But I rise not only to say that. I rise to say that the reasoning that the Minister so clearly expressed was the very reasoning that I tried so hard to express myself in regard to the quandary of the motorist on the discretionary endorsement. I still have not had a reply to that question—and I am so glad that even at this late hour your Lordships have the strength to nod your heads in agreement. I come back to that, because the reasoning of the noble Earl the Minister breaks down at this point.
If I go to court with my clean licence—forgetting all about the question of points—and the court has a discretion to endorse my licence apart from fining me, I have that deterrent; or, if you put it another way, I have the encouragement, even though I do not think I committed an offence, to say to the police officer, as this Bill is now drawn, "I will have to accept the penalty notice because if I go to court and contest this and I lose, the court can"—not must, but can—" endorse my licence, whereas you cannot. I am a driver, I am a chauffeur, I am a lorry driver, and I earn my living by having a clean licence; I must not run that risk. So you are getting from me £20 which I do not think I ought to pay, but I am going to pay it because, otherwise, if you report me, I am going to run the risk of having my licence endorsed". I repeat, this has nothing to do with points and nothing to do with the clause which the noble Earl the Minister referred to, because that deals only with obligatory endorsement.
Lord Lucas of Chilworth: Before the noble Lord, Lord Mishcon, sits down, would he not agree that this is exactly the point we tried to make last year? This is being done as a convenience to the courts, to relieve the burden. It really has nothing to do with anything else; it is to relieve that burden. Whether or not it does at the end of the day, only the years will tell.
Lord Mishcon: I rise for only a moment, I promise the Committee. I would not mind if this did relieve the pressure on the courts—and one knows how severe that pressure is in regard to some serious criminal
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matters. Therefore, if it relieved the court of a number of driving offences, I would be happy. If it relieved the administration of justice generally of a lot of work, I would be happy. What I cannot tolerate, however, is an injustice of the kind to which I referred.
Lord Underhill: The noble Earl implied that by this amendment I was endeavouring to introduce a new two-tier system. I said that what the amendment was seeking to do was to put into the Bill what is the present law in the Road Traffic Regulation Act 1967, Section 80(2). I said I would not read it, but perhaps I had better read it because that will let noble Lords know exactly what I am endeavouring to do.
" Where a constable finds a person on any occasion and has reason to believe that on that occasion he is committing or has committed an offence to which this secion applies, he may give him the prescribed notice in writing offering the opportunity of the discharge of any liability to conviction of that offence by payment of a fixed penalty under this section; and no person shall then be liable to be convicted of that offence if the fixed penalty is paid in accordance with this section…"
Under the existing law, under which fixed penalty offences apply, if it is paid within the prescribed period and in the proper way, any liability to conviction cannot be given.
What I am endeavouring to do in the amendment I have moved is to provide a similar provision, that in the event of a person paying in the correct way there should be no liability to endorsement or penalty points. The whole question is not of introducing something new but of continuing the present provision. I believe the noble Lord has made quite a convincing case on one particular point when he mentioned that so many cases could come under this heading, and I would certainly look at that.
I take the same view as my noble friend Lord Lucas that, at five minutes to 10 o'clock, to argue this any more would not get us a great deal further. In this case, the best thing for me to do is to read what the noble Earl has said and perhaps both the amendments proposed originally by the noble Lord, Lord Lucas, and myself may come back in different form, possibly looking at the whole thing afresh. I am sure the Committee is a little confused by one massive series of amendments and also a further series which deals with the same principle in effect, but tries to go further than the other. In the light of the explanations given and the confusion, I beg leave to withdraw the amendment.
Lord Mishcon: On that point, again with persistence —and I hope the Committee will not think it worse than that—before moving from Committee stage on this Bill and so that we know where we stand in our consideration between Committee stage and Report, I ask again whether I am correct or not, that someone will face an endorsement on a discretionary basis if he goes to court and there will be no provision for an endorsement on a discretionary basis if the penalty notice is accepted. If the Minister will be kind enough to answer that, we shall know where we stand.
The Earl of Avon: Looking at Schedule 1, the offences for fixed penalties are listed. The noble Lord will see that all the offences there are obligatory; there are no discretionary endorsements under the fixed penalty

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system. What I should like to do between now and the next stage of the Bill is to try to get out a piece of paper which sets out clearly what we are trying to do, so that I can circulate it to all interested. Obviously we can go on and on across the Floor. I think I have said what the noble Lord does not think I have said and vice versa.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): If Amendment No. 22 is agreed to, it will not be possible for me to call Amendments Nos. 23, 24 and 25.
[Amendment No. 22 not moved.]
10 p.m.
Lord Teviot Lord Teviot moved Amendment No. 23:
Page 27, line 33, after ("endorsement") insert ("other than an offence described in paragraph 3A of Part III of Schedule 4 to the 1972 Act").
The noble Lord said: In moving this amendment, with the leave of the Committee I shall at the same time speak to Amendments Nos. 27, 28, 29, 30, 31, 32, 35, 48, 49, 79 and 131, which also appear on the Marshalled List in my name.
Before I go to the text or main point of my amendments, I appreciate that the Committee will take all this at this late hour. I confessed earlier when I apologised to the noble Lord, Lord Mishcon, for making a social blunder, that I made a slight mistake. There was talk about being in a fog. It was more of a Scotch mist. When we come to Report stage some of these obligatory offences will remain contentious, I agree. This is not my amendment but I want to say this, especially with regard to matters such as pedestrian crossings. I think that we should deal with these matters one by one in a rather different way from that followed so far.
Now, with permission, I shall go back on to what I was going to say rather slowly, and I shall keep to my speech absolutely word for word, otherwise I shall get very lost. If noble Lords wish to interrupt me, they may do so because I shall be ready for them. The linchpin of this group of amendments is the proposed new clause, Amendment No. 113, in Part IV of the Bill. One might prefer to see this new clause incorporated in the Criminal Justice Bill, but I understand that in another place the Minister responsible for that Bill considered it would be more appropriate to the Transport Bill which the Committee are now considering. In support of that view, there is no doubt that all the amendments now being debated relate closely to Part III of this Bill.
In explaining the intentions of these amendments, may one first say that they seek to deter rather than to punish; but that the proposed penalties, seen as a package, are fitting to the crime. The proposed new clause has four objectives. First, it makes offences against traffic regulation orders, or traffic scheme regulations, subject to discretionary disqualification for driving; secondly, it allows use of fixed penalty notices under Part III of the Bill; thirdly, it ensures that the fixed penalty is at the rate applicable to endorsable offences; and fourthly, it precludes prosecution while the offence may be wiped out by payment of the fixed penalty.
Amendments Nos. 23, 27, 35, 48 and 49, to Clauses 26, 27, 29 and 30, remove relevant offences from the default payment procedure of Part III, thereby ensuring that court action is taken to bring into operation the deterrent of endorsement and possible disqualification.
Amendment No. 79, to Clause 48, relates to company owned cars. One does not want to get at a particular part of the community at this time of night, but the Committee may agree that the worst parking offenders are often drivers of company cars, who may regard penalties as a business expense. A company cannot
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be disqualified, so a method of acting against the individual responsible is a fundamental necessity. Amendments Nos. 28 to 32, to Schedule 1, are purely consequential on the provision making the relevant traffic offences liable to endorsement and disqualification.
So these amendments introduce a new class of offence, in severity somewhere between those directly involving human safety—which is what Parts III and IV of the Bill are all about—and venial sins of selfishness. This distinction can be justified because of the economic and social cost the offender places on the rest of the community and because of the indirect effects of such offences on road safety, particularly through the frustration they cause other drivers. We all have seen risks taken by drivers due to frustration. We may occasionally be tempted ourselves.
Under the Road Traffic Regulation Act 1967, local authorities are given power to make orders and regulations controlling traffic on specified roads in their areas. It is for these authorities with their local knowledge to determine the appropriate circumstances in which regulation is required in the interests of the local community. It is for Parliament to determine the broad framework within which these local decisions shall apply, including the penalties which may attach to offences.
One sometimes hears criticisms of restrictions placed on residential roads by the local councils. It seems to me that, if the penalty appropriate to trunk routes is a sufficient deterrent to keep them free of illegally parked or waiting cars, it should follow that councils would not impose unreasonable restrictions on subsidiary and residential roads. because they will recognise that the penalties are too onerous. This should help keep the traffic regulation policy in balance and prevent overkill with the new penalties. It is a matter of balance, as well as deterrence. While we must not allow the individual driver to act selfishly towards the great majority, neither should he be penalised for the responsible use of his vehicle. It is guiding this balance which is fundamental to these amendments which I urge upon your Lordships' Committee.
As has been said, Amendment No. 113, which is the proposed new clause, introduces a new category of offence. We live in an age when our cities are congested with traffic. There are massive difficulties in further improving the road network in the centres of these cities and, meanwhile, illegal parking of vehicles penalises other road users—indeed, the community as a whole—to an extent many hundreds, even many thousands, of times greater than the benefit to the individuals who offend in this way. It particularly affects users of public transport, since buses cannot deviate from their routes to avoid the obstructions and congestion which illegally parked vehicles cause.
There are many who would be pleased to rely on the public transport system, if it were able to provide a regular and reasonably swift service, but it is handicapped by illegal parking, misuse of bus lanes, and so on. People in our cities need a balanced transport provision ensuring adequate public transport for the majority, but

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those for whom the private car is essential should have the opportunity to travel over our roads and be provided with a reasonable allocation of parking space. The reasonable needs of delivery vehicles must also be recognised.
In saying that the motorist must have a reasonable allocation of parking space, it must be remembered that parking space and traffic volume are two sides of the same coin. If there is parking there will be traffic; if there is not, then drivers will be deterred and will seek to keep their vehicles away from the congested area, so easing the congestion.
There was a classic demonstration of this last week at the start of the deplorable railway strike—this is rather contentious; and one must add that all rail strikes are now potentially suicidal—when London was deprived of its underground trains and parking space was substantially increased. The centre of London was saturated with cars and the police had to turn back thousands of motorists on certain approach roads. The relevance of this is that an increase in the supply of parking space attracts vehicles which, if the supply were reduced, would stay away. While the penalty for illegal parking is too low, the supply of parking is effectively increased and further aggravates matters.
Another penalty of heavy parking is the obstruction caused by drivers trying to manoeuvre—may be where junctions of narrow roadways are restricted by badly parked vehicles or maybe by trying to squeeze into a limited space between two vehicles which are already parked, probably illegally. Last year, in evidence to the Transport Committee in another place, London Transport's chairman said that, if its buses could move as freely on weekdays as on Saturdays, there would be a £30 million reduction in costs and an additional £12 million in fares revenue—a benefit of £42 million in 1980. The figure would be much higher now and would have gone a long way to avoid the recent fiasco over fares in London.
That is just one example, but there was also an interesting, if rather extreme, leading article in last Monday's Daily Telegraph by Professor Mishan. This, "with remorseless logic"—to use the sub-editor's words—showed the massive economic and social costs of the car, compared to public transport. Public transport is, perhaps, the major and most obvious beneficiary of freer traffic movement, but delivery vehicles and essential car users would benefit, too. Heart disease is a killer and the disease of our traffic arteries is killing our national efficiency. That is why we must take appropriate action. The measures already included in the Bill will help, but can one believe that they go far enough?
It is my personal belief that the deterrent of possible disqualification from driving will be more effective than the new fixed penalty procedure, and even than wheel clamps, which I welcome. It is for this reason that urge these amendments, even though I recognise that in one respect they run counter to the policy of the Bill. Part III takes responsibility for most traffic offences away from our magistrates' courts and courts of
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summary jurisdiction. These amendments require the offender to appear in court. If he does not accept that it is fair and pays the fixed penalty, the question is whether the offender will pay. That we do not know.
I feel strongly that this is just as worthy of experiment as is the excellent trial of wheel clamps. The powers of the Secretary of State under Clause 28(2) will suffice for this purpose or, should they not, they could be extended to cover it. In either event, the time has come for positive action to protect the legitimate motorist, bus users, pedestrians and our own cities themselves from the modern equivalent of the highwayman—from that selfish and too large minority who now abuse our roads. I beg to move.
Lord Underhill: I have only two or three brief points to make. I am in full sympathy with the aim behind the amendment moved by the noble Lord, Lord Teviot, which is to endeavour to remove obstructions—in particular from clearways and urban highways—so that traffic can flow smoothly. All of us are in complete agreement that this is what we are aiming for, but, when I look at the new clause proposed by Lord Teviot's Amendment No. 113, which is the important amendment in the list of amendments which he has moved, it appears to me that the same criticism could be made as was made of the amendment which I moved. It appears that, if the fixed penalty is paid within the proper period, that finishes the matter, but, if it is not paid, there can be discretionary disqualification. This is going much further than what even 1 suggested. It appears to me to be one anomaly. Further, while the obstruction of clearways, experimental traffic routes and so on is something to be avoided, ought it to carry the possibility of disqualification? If it is serious enough for disqualification, I believe that the Committee ought to look at the list of offences which are in the 1967 Act. We may find there much lighter penalties for offences which are just as serious. The two points I have made are critical of the amendment, even though I agree with its general aims and objectives.
The Earl of Avon: I join the noble Lord, Lord Underhill, in his general welcome of the proposition which underlies these amendments, that illegal parking seriously disrupts the bus industry and that the bus operators could operate more economically and effectively in conditions free of obstruction caused by illegal parking.
My noble friend Lord Teviot has explained that the main purpose of these amendments is to provide a stronger deterrent against illegal parking. I hope he will agree that this Bill already takes several important steps to strengthen the deterrents to illegal parking. My noble friend has already mentioned the clause on wheel clamps. It has been a major flaw in the operation of the fixed penalty system in London in particular that court time has simply not been available to deal with all the unpaid fixed penalties issued for parking offences. The Bill tackles this fundamental problem by providing for unpaid penalties, plus 50 per cent., to be registered and enforced as fines without a court hearing, unless one is requested.

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My noble friend's amendment is based on a radically different approach which we believe is incompatible with that of Part III of the Bill. The amendment, having defined a group of offences which includes yellow line parking offences but which could also embrace certain moving traffic offences—for example, in bus lanes or one-way streets—gives the courts discretionary power to disqualify and obliges them to endorse licences on conviction.
As the noble Lord, Lord Underhill, said, and as the noble Lord, Lord Mishcon, will be horrified to hear, at the same time it provides a means whereby recipients of a fixed penalty for these offences may wholly avoid the risk of endorsement or disqualification. They could do this simply by paying the penalty. Indeed, they could receive and pay any number of penalties without risk of disqualification, because the amendment does not provide for points to be entered on the licence when a fixed penalty is paid. That amounts to a very strong and, I think, unjust pressure on the driver not to take his case to court, however good he may think his defence. It is quite unlike the alternative at present offered by Part III for endorsable offences.
A second objection to the amendments my noble friend has proposed is that they would put the clock back on two vital developments which have arisen from practical experience of operating the fixed penalty system. The first development concerns owner liability, which this Bill preserves, and which was introduced in the Road Traffic Act 1974 after police had found considerable difficulty in following up unpaid penalties left on vehicles in the driver's absence. My noble friend's amendments to Clause 30 and 48 would have the effect of dropping the presumption of owner liability for this group of offences. I am sure that is consistent with the intention of the amendment, as it would be a doubtful step to endorse or suspend the owner's licence for an offence committed by another driver.
But the approach would create major problems. Some 21/2 million restricted street offences were dealt with by fixed penalty in England and Wales in 1980. The present amendment would require all unpaid penalties issued for such cases to be followed up through the courts, as it disapplies the procedures for registering unpaid penalties as fines in Clauses 29, 30 and 31 of the Bill. Without any presumption of owner liability, it would be a mammoth task to identify the driver and summons him. This would involve the co-operation of vehicle owners. Experience prior to 1975 suggests that owners would not be co-operative, and the amendments impose no sanction on owners who do not assist the police to identify the driver. Nor do they help in any way to resolve disputes between owners and drivers as to who was responsible for a particular offence. Where doubt remained, I believe that magistrates would be inclined not to convict, knowing that endorsement followed. I think it is also likely that magistrates would be extremely reluctant to use a power to disqualify for parking offences. They already have such powers for offences which involve danger, such as leaving the vehicle in a dangerous position or parking on a pedestrian crossing. The validity of endorsement or disqualification for
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offences with a road safety aspect is widely accepted. But the present amendment would extend endorsement to many offences which do not as a rule prejudice road safety, although I accept that they are often anti-social and prejudicial to traffic flows. We should be very wary of adding to the present list of endorsable offences, and particularly when the offences concerned are numbered in millions.
The Government believe that the improvements to the fixed penalty system which the Bill already contains constitute a sounder and more effective way of increasing deterrents to illegal parking, by making it more likely that unpaid fixed penalties will be enforced. We believe the amendment would disturb the enforcement of fixed penalties for parking offences rather than assist it, and that it would distort the option of a hearing by bringing unacceptable pressure on the recipient of the fixed penalty to avoid being taken to court. I have replied to my noble friend in some detail and I hope he will do me the courtesy of reading what I have said. I hope that I have answered some of his problems.
Lord Teviot: I am terribly surprised to be getting up again so quickly. In reply to the point made by the noble Lord, Lord Underhill, if fixed penalties go further, then fair enough. He also felt that disqualification for obstructing a clearway was going it a bit strong. I believe that my noble friend also mentioned this. We have Transport Bills rather often, but we do not often have these sort of sections in Transport Bills. We are dealing with a major problem with congestion on the roads. I suppose that, directly, parking does not affect road safety; but it does due to frustration, as I have explained. I believe that we must look very much further than we are doing already. There is also this business about people paying. They jolly well do not pay. I shall not delay the Committee any longer, but I shall take my noble friend's advice and read what he said, he having read what I said. Perhaps at a later stage we can come back and deal with this matter all over again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Denham: I think we have probably reached as far as we can go tonight. What I have been trying to ascertain is whether any of these subsequent amendments have already been spoken to; we could get them out of the way for the Marshalled List next time. If the next amendment of my noble friend Lord Lucas is one that he still needs to speak to, perhaps we should adjourn before we reach it.
Lord Lucas of Chilworth: I regret to tell the Committee that I would have to speak to Amendment No. 24.
Lord Denham: I am merely seeking for elucidation. I was not trying to hustle my noble friend into anything he would afterwards regret. Therefore, I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to: House resumed.

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  ISRAEL-LEBANON DISPUTE: UN RESOLUTIONS
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