Sitting of 23 July 1982

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

  Airedale General Hospital, Keighley
  9.35 am
  Mr. Bob Cryer: I have pleasure in presenting to the House a petition on behalf of the health workers at Airedale general hospital in my constituency. It contains 1,000 signatures. The petitioners are not asking for an 18 per cent. pay increase similar to that which judges and senior civil servants recently received when they already had salaries of £25,000 a year or more. They are asking for a modest 12 per cent.
  Representatives of Airedale general hospital visited the House on Wednesday and asked me to point out that the offer made by the Government is inadequate and that it would give people with several years service a net increase of only £2 a week. I was provided with a wage slip which shows basic gross pay of £71·09 and net take-home pay of £50·75. That is hardly a living wage.
  I have therefore been asked to present this petition in an attempt to persuade the Government to make a reasonable offer to the workers whose services are widely appreciated. Airedale general hospital is a facility that is much appreciated by the people in my constituency and in the surrounding area.
  The petition reads:
  To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
  The humble Petition of the people of Keighley in West Yorkshire and elsewhere
  Sheweth
  That the claim for a 12 per cent. increase in wages and salaries by National Health Service workers who provide a highly important and widely appreciated service is an extremely reasonable one and that the arbitrary imposition of a wage limit is unfair and unacceptable.
  Wherefore your petitioners pray that your Honourable House will urge the Government to meet the pay claim by the National Health Service workers in full.
  And your Petitioners, as in duty bound, will ever pray, etc.

BUSINESS OF THE HOUSE
Ordered,
That, notwithstanding the provisions of paragraph 1 of Standing Order No. 18 (Business of Supply), the second part of the 22nd allotted day may be proceeded with this day and, notwithstanding the provisions of Standing Order No. 3 (Exempted business) and Standing Order No. 18 (Business of Supply), if proceedings on the Motion relating to European Communities Budget have not been disposed of by half-past Two o'clock, Mr. Speaker shall put forthwith any Questions necessary to dispose of them.—[Mr. Cope.]

Orders of the Day
  SUPPLY
  [22ND ALLOTTED DAY] SECOND PART]—considered
  SUPPLY

    European Communities Budget
    9.37 am
    The Financial Secretary to the Treasury (Mr. Nicholas Ridley): I beg to move,
    That this House takes note of the preliminary Draft Supplementary and Amending Budget No. 1 for 1982 and the preliminary Draft General Budget of the European Communities for 1983.
    This is the ninth debate on the European budgetary proposals in a series that goes back to 1975. It is an annual event when the House gives its views on the draft budget documents before the Government go to the Council to negotiate the final budget for the following year, in this case 1983. The Commission has put forward proposals for the draft budget next year and for the amending budget for this year. I have a certain amount to say about the latter as well as the former.
    We have explained some of the details of these documents to the House in a memorandum that the Treasury deposited on 2 July. I hope that hon. Members have had a copy. I realise that this is a fairly narrow subject—
    Mr. Nigel Spearing: Oh!
    Mr. Ridley—in that the budget deals only with corrections to the present year's budget and the plans for next year's budget whereas many hon. Members will want to debate the wider issues, particularly our budgetary contribution and matters that were covered at some length in last Wednesday's debate. I shall be happy to respond to hon. Members' remarks about those wider matters. I must at this stage confine myself to the details of the two documents.
    Mr. Peter Shore: Does the Minister accept that the budget is supposed to represent the results of the famous May 1980 mandate and that therefore the debate should cover the whole area of our interests with the EEC? I hope that, where relevant, the Minister will range widely over the issues.
    Mr. Ridley: I am not a bit surprised that the right hon. Gentleman should say that. I merely said that I would concentrate in my opening speech on the documents before us and, with the leave of the House, respond to right hon. and hon. Members later.
    We are discussing the Commission's initial proposals. They represent the first step in the process that leads to the budget. Next week the Council meets the Parliament and the First Reading of the budget takes place on 27 and 28 July under the Danish Presidency. I shall be the United Kingdom member of the Council. We shall take into account what is said about the documents today to bring the proposals as near as possible to what the House wants.
    Last year I acted as President of the budget council. We ended with a disputed budget. It involved a most unseemly dispute between lie Parliament and the Council. The agreement broke down on a number of issues, the principal

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    one of which was whether budget items should be classified as obligatory or non-obligatory. The treatment of items varies according to their classification, so the amount of the budget was affected by the Parliament taking a different view from the Council on classification.
    Statements were made to the House on 27 January and on 3 February. The matter was followed up in a debate on the Supply Estimate on 16 March when the hon. Member for Colne Valley (Mr. Wainwright) questioned the increased contribution which we put before the House in the form of a Supplementary Estimate. Those matters should be resolved.
    On 16 March I said that I hoped that the issue would be resolved in the discussions put forward by the United Kingdom Presidency, which the Belgian Presidency carried out in the first half of this year. I said:
    "It is our earnest hope that we can avoid these budget debates"—
    between the Council, Parliament and the Commission—
    "in the future and can work out a sensible formula for carrying out these tasks."—[Official Report, 16 March 1982, Vol. 19, c. 259.]
    Because the budget was not agreed we had to pay a little more than is allowable under the European Communities Act. I said that we would pay the extra amount into the EEC No.1 account so that it remained in our control. I said that we would keep the discussions going and in the meantime go the European Court for a resolution of the dispute, if it could not be sorted out by negotiation. I said that if there was no agreement we would seek the court's ruling. I am glad to tell the House that an agreement was reached. The text of the agreement is in the Library. The court action is be withdrawn. The agreement was signed by the President of the Council, the Commission and the Parliament on 30 June this year and was ratified by the European Parliament on 8 July.
    Sir Michael Shaw: I have heard rumours that, although the documents have been approved, a difference of interpretation has come to light about some of the important words in the documents. Are the language differences now resolved?
    Mr. Ridley: I doubt whether they will ever be resolved completely. European documents are not legally precise, like our legislation. Indeed, they are sometimes designed to mean all things to all men because otherwise they may not come into existence. There is some dubiety about the meanings of some phrases but a major degree of agreement is progress.
    The first two sections of the new agreement define the classifications of the various budget lines. The annex to the first two sections specifically reclassifies the 1982 budget as part of the agreement. Agreement on procedure for deciding the classification of new budget lines in future is included.
    The third section deals with interinstitutional collaboration on the budgetary procedure. There is an important agreement that Parliament will not adopt a budget until disagreement with the Council has been resolved by further discussion. That puts right one of the things that went wrong last year.
    The fourth section covers three aspects of the Council's continuing right to control and limit expenditure. It covers, first, the maximum rate by which non-obligatory
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    expenditure can be increased by the Parliament and the definition of that; secondly the setting of ceilings by the Council in regulations on particular lines of expenditure and, thirdly, the requirement that each item of expenditure shall have a legal base.
    I shall be happy to answer questions about the agreement. I hope that it will make an effective improvement to the budgetary process and will last for a considerable time. I am glad that during our Presidency we gave the initiative the push that resulted in agreement. It is an example of limited but important progress in Community institutions.
    There are two consequences of the agreement for us. The first is that the 1982 budget will now be implemented as published in the official journal of the Community. The second consequence is more complicated. It involves a notional assiette. I know that I am not allowed to use French words, Mr. Deputy Speaker, but I think that it means "plate". "Assiette froid" means "cold buffet". The meaning in this case is that the base from which the classification of the different items is to be calculated will be in accordance with the new agreement rather than on the basis of the 1982 budget. That means that, when considering the 1983 budget, we shall operate as though the classification agreement was in existence last year. The matter is complicated and I hope that I have made it clear.
    Mr. Peter Shore: Retrospection.
    Mr. Ridley: There may be said to be an element of deemed retrospection
    The preliminary drafts from the Commission do not reflect the two consequences because they were drawn up before the agreement. In the budget council we shall ensure that they conform to the two conditions that I have just described.
    On 16 March the House voted additional sums of £7 million for 1981–82 and £21 million for 1982–83. As I said in that debate, we were the stakeholders for the extra moneys. We paid them into the EEC No. 1 account which is held by the Paymaster General and under Treasury control.
    The agreement does not yet alter the status of the payments, but it paves the way, through the reclassification that I have mentioned, for the 1982 budget to be established on a new basis. That might be done through a rectifying budget now, or later in the year when other charges can also be taken into account.
    To pick up a point that I made in that debate, I can confirm that the balance of £131·2 million in the EEC No. 1 account at the end of 1981–82 was far in excess of the £7 million paid from the Supplementary Estimate. The same applied at the end of the first quarter of 1982–83, when £7·012 million was paid from the vote and a balance of £112·3 million was in the EEC No. 1 account.
    When a new level of budget is established through an amending budget, either the one that we are discussing or a subsequent one—there might be other changes since the beginning of the year as well as the effects of the classification agreement—payments into the EEC No. 1 account will be adjusted accordingly. That will discharge the Government's obligation fully to account for those payments to the House.
    The 1983 budget is only for one year and the Government note with regret the absence of a triennial financial forecast for the following two years. We would

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    much prefer to have a longer profile of planned spending so that the House could have some idea of the shape of things to come. We shall raise that matter in the Council.
    We must encourage the Commission, the Council and the Parliament to look at the allocation of resources in the longer term within a confined total and to start to talk the language of priorities in budget-making. That is absent from Community budget-making and it is a point that I have made many times in budget councils. We should be making value judgments about what should be increased and what should be decreased, just as we have to do at home.
    Finally, I should like to make a few points about the shape and content of the draft budget for 1983. The payments included in the 1983 preliminary draft budget show refreshingly smaller increases than in the past. Compared with proposals for 1982 presented by the Commission this time last year, the overall increase, excluding our refunds which are a separate financial transaction from this part of the budgetary process, is only 7·7 per cent.
    Some subsidiary figures show how, by more realistic estimating, the Commission has produced relatively modest changes. As between the preliminary draft budget last year and this year, administrative and related expenditure is only 4·9 per cent. up and the expenditure on agriculture is only 2 per cent. up, whereas the regional fund is 26 per cent. up, the social fund 32 per cent. up, and industry, energy and research are 53·5 per cent. up. Within that total increase of 7·7 per cent., there is a much more encouraging re-allocation in the Commission's proposals for the money.
    It might help the House if I gave some historical background to the figures. Apart from the cost of administration, which since 1975 has varied between 5 per cent. and 5·8 per cent. of the total budget, the weight of the main constituents has changed considerably over the years.
    In 1973, expenditure on the guarantee section of the European agricultural guarantee and guidance fund, represented nearly 80 per cent. of the European budget. Up to 1980 it varied between 70 and 75 per cent. From 1981, following high world food prices, it dropped to less than 62 per cent. It is estimated that it will not rise beyond 65 per cent. in the 1983 draft budget that is before the House. I stress that the estimates are highly vulnerable to factors outside our control.
    Since 1973 the social fund has grown from 1·2 per cent. of the budget to 5·8 per cent. in the 1983 draft budget. The regional development fund, which started in 1975 by taking 1·4 per cent. of the budget, now represents 6·4 per cent. of the 1983 draft budget.
    Research, investment and energy expenditure took up 1·8 per cent. of the budget in 1973, 2·3 per cent. in 1981 and 3·1 per cent. in the preliminary draft budget. Taken together, expenditure on investment, industry and employment will have risen from about 3 per cent. in 1973 to 12 per cent. in 1982. The proposals in the 1983 draft budget would bring the figure up to 15·3 per cent.
    Mr. Jack Straw: I am grateful to the hon. Gentleman for those figures, but will he acknowledge and accept that payments to the United Kingdom out of the regional and social fund do not result in any additional public spending over and above that laid down in the public expenditure White Paper?
    Mr. Ridley: The hon. Gentleman knows full well that if the United Kingdom did not receive those sums and, indeed, if we did not receive our refunds, the Government would not be able to maintain the level of public spending that they do. Therefore, I confirm what he says.
    I ask the House to approve the draft budget and to give the Government a mandate to negotiate the budget's approval and to give its views on how it would like it improved so that when I go to Brussels next week I shall have not only the confidence but the views of the House during those discussions.
    9.56 am
    Mr. Peter Shore: This is the second debate this week on European matters. On Wednesday we debated and voted upon an Opposition motion that stated the belief
    "that events have show that Common Market arrangements for the Budget, Agriculture, Fisheries and Food are contrary to the interests of the United Kingdom and that the Treaty of Rome cannot provide a sound and secure basis for long term fruitful cooperation with the United Kingdom's European friends and allies".
    Very properly, that debate covered a wide canvas—the totality of our relationships with the EEC, including, as the words that I have read out make plain, a specific mention of the present, to us intolerable, arrangements for the EEC budget as a whole and, in particular, the United Kingdom's contribution to it.
    But for that all-embracing motion and the vote upon it on Wednesday, we would today have tabled a specific motion reaffirming broadly the motion on the budget that we put down and voted upon almost exactly a year ago.
    I say that to make it plain to the Financial Secretary before he departs early next week for Brussels that he has no more support in his endeavours on the broad shape of the 1983 preliminary draft budget than he had for the preliminary draft budget for 1982, 12 months ago.
    I listened with great interest to the hon. Gentleman's speech. I note what he said about the late achievement of the British Presidency with regard to the classification agreement. We now know far more clearly than we did before what is to be classified as obligatory and non-obligatory expenditure. No doubt there will be dancing in the streets of Brussels and wild celebratory parties in Luxembourg and Strasbourg as a result of such an achievement.
    Mr. Spearing: At public expense.
    Mr. Shore: As my hon. Friend has said, it will probably be done at Euro-public and particularly British expense. However, it is a very modest achievement.
    The tedium of the budget procedures in the European Assembly, and of the procedures between it, the Commission and the European Council and the grotesqueness of the structures and arrangements of the budget will continue to command far more attention. I certainly share the Financial Secretary's concern that there is no triennial forecast this year. Some sense of perspective is required, particularly when, as we are well aware, the 1 per cent. VAT yield is moving towards the ceiling laid down in the February 1970 agreement, which authorises that part of own resources.
    The absence of a triennial forecast is linked to what the Financial Secretary said about the relatively low growth in the overall size of the payments budget this year. I do not necessarily say that that is deliberate, but it is a rather

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    surprising consequence both of the Treasury's explanatory memorandum of 2 July and of the words used in the introductory part of volume 7 of the major clutch of Commission documents before us. It is a consequence of the way in which the somewhat inadequate and incomplete accounts for the 1983 draft preliminary budget have been presented that the overall increase is understated, possibly to a significant extent.
    The Financial Secretary properly and frankly acknowledged that no sum was included for the refund to the United Kingdom. We do not yet know with absolute certainty what the sum is, but when it is included it will change the picture from the rather modest—as the hon. Gentleman said—increase of 7·7 per cent. to a higher figure. That must be pointed out.
    The preliminary draft budget for 1983—the principal subject for our debate—marks, most importantly, the continued and almost total failure of the Government to achieve the reform objectives that they set for themselves with such clamour and apparent fervour nearly three years ago.
    I shall recall the events. Having been defeated at the Dublin summit in December 1979, and having been driven to accept the temporary and inadequate compromise of 30 May 1980 in Luxembourg, the Government pinned their hopes of far-reaching and permanent change on the searching reappraisal of Community practices—the now famous mandate that was given to the Commission on that date. The Commission reported back to the Council of Ministers 13 months later, to be precise on 22 June 1981. It is remarkable that the House, which has had several opportunities to discuss European matters during the past 12 months, has not seriously debated the content of the Commission's report as a result of that mandate of 30 May. When we faced the Community budget debate this time last year it was at least plausible for the Government to argue and for the Commission to assert that the results of the mandate could not, in so short a period, be properly reflected in the Commission's preliminary draft budget for 1982, or in any decisions taken on the mandate report by the Council of Ministers. However, no such excuse is available today. The Commission has had a full year in which to reflect upon its report and to feed it into the budget structure. As for the Council of Ministers, we have had six months of creative British Presidency, ending on 31 December 1981, and two further summit meetings in which the conclusions on the mandate were a central part of the agenda.
    Therefore, this is the first post-mandate budget. It is the first budget of the new era and of the new Community dawn that the Government's alleged determination had forced and persuaded their fellow members in the EEC to enter. It was to be the start of a new pattern of expenditure and as a central part of it the CAP was to play a markedly different and less dominant role. This was also the age when changes were to be made in the absurd way in which member States finance the EEC budget. Above all, it was to be the beginning of a new period in which the United Kingdom, after the surrender of its interests by the right hon. Member for Sidcup (Mr. Heath) and his Government in 1971—when they agreed to pay an open-ended ransom to the EEC budget for the privilege of British membership—and after the failure of the Government of my right hon. Friend the Member for Huyton (Sir H.
    664
    Wilson) in the renegotiation of 1974–75 to retrieve that initial and major error, was to see a permanent, fair and equal financial relationship between the United Kingdom and the EEC.
    That was certainly what was hoped for. Alas, that was not to be. In the draft budget for 1983 we have before us a testament to the failure of the Government's attempts to renegotiate their unequal burdens with the EEC and a monument to the continued failure to reshape, in any significant degree, the totality of the EEC budget and the methods of financing it. I shall spell out why the 1983 draft justifies the title of a budget of failure.
    Mr. Hugh Dykes: Does the right hon. Gentleman's last remark mean that he would seriously welcome much more being spent on the social and regional funds in future?
    Mr. Shore: Given the choice between expenditure on the common agricultural policy and expenditure on other matters, there is no doubt, as common sense indicates, that that would be a better form of expenditure. However, as the hon. Gentleman might, in a sense, expect, I shall develop my remarks on that point.
    I turn to the subject of the continued dominance of the CAP. Next year, as the Treasury's explanatory memorandum makes plain, the EEC budget provides for expenditure of over £12,000 million. Of that sum, no less than £8,000 million is to be devoted to price support of European farm products. As we all know, the benefit of those vast subsidies does not accrue to consumers either in the United Kingdom or elsewhere in the EEC. Some part of it goes to European farmers, but a very substantial part is simply wasted. It goes in storage costs for the large surpluses, cut price sales, when those surpluses become unmanageable, to whatever countries will purchase them, after the Soviet Union, and, further, through the deliberate subsidising in the world market of Community farm products that would otherwise be uncompetitive.
    The preliminary draft budget for 1983 anticipates an increase in farm guarantee expenditure of about £500 million. According to the Commission, it will then account for 64 per cent. of the 1983 budget. It is true, as the Commission claims, that that is less than the 1980 percentage share, when the figure was just over 71 per cent., but the Commission fails to say—the House must recognise this—that the reduction, such as it has been, owes more to the hardening of world farm prices, and therefore the reduction of certain expenditure, than to any change in decisions about the CAP. One may doubt whether world food prices will continue this year and next to be as favourable from the point of view of the cost of subsidising CAP exports as in the two previous years. However, we are still accepting that broadly two-thirds of the total Community budget will be absorbed in agricultural expenditure.
    That is all the more amazing and all the more disproportionate at a time when recession in the industrial sectors of the Community, most grievously in the United Kingdom, has so noticeably deepened. That is reflected in the unemployment figures in the Community as a whole, which are disturbing and depressing. The last set of figures was published along with the papers that accompanied the most recent summit meeting. The figures should be familiar to hon. Members on both sides of the House. There has been an increase of two to three times over the past four to five years.

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    The Brussels Commission and all the institutions within the Treaty of Rome are patently ill-equipped to deal with the fundamental problems of slump and unemployment. Last year, in presenting the 1982 preliminary draft budget, the Commission wrote:
    "in drawing up the 1982 budget the Commission has sought particularly to enable the community to respond as effectively as possible to the demands placed upon it by the continuing economic recession."
    The same theme is pursued in this year's submission. Referring to what it called the
    "major reorientation of the community policies"
    which were supposed to be initiated through the 30 May 1980 mandate, the Commission states in the introduction to volume 7:
    "This year, however, the Commission is able to present a budget which represents a first step towards fulfilling the objectives of the mandate even though some important elements of that debate are still under discussion."
    I am afraid that the evidence for that progress towards major reorientation is thin and unconvincing. The Commission has proposed a substantial increase in the social and regional funds, which has been mentioned by the hon. Member for Harrow, East (Mr. Dykes) and the Financial Secretary.
    Even if approved by the Council of Ministers and the Assembly, the Commission's proposals for increased expenditure via the social and regional funds will, in 1983, be barely more in real terms per capita for the anticipated 10·5 million unemployed in the EEC than when unemployment was 6·8 million in 1980. Thus, in spite of the cosmetics and the commitment to a
    "major reorientation of the community policies"
    in 1983 the EEC will remain basically what it has been almost since its inception—a common agricultural community with a common external tariff surrounding a customs union.
    The 1983 preliminary draft budget takes no forward step towards changing the bizarre arrangements for financing the EEC, for the reason that no commitment to such a change has been made, and, like major CAP reform, it was virtually excluded from the terms of reference given to the Commission in the 30 May mandate.
    Of the three main taxes that make up "own resources", as hon. Members will discover when they look through either volume 1 or volume 7 of the documents, in 1983 Britain will pay nearly one-third of the total contributed through levies and premiums on imported food. Only one other country, Italy, pays half as much in levies on imported food as Britain.
    Of the second main tax, customs duties, Britain will pay, it is assumed, slightly less in 1983 than in 1982. However, we shall contribute more than 25 per cent. of the total revenue from customs duties. Only Germany will contribute more. As for VAT, the third of the own resource taxes, Britain will contribute just over 20 per cent. As the Treasury memorandum acknowledges, in total in our gross contributions we shall contribute no less than 22·4 per cent. of the total, about £2,700 million. As our GNP, as a percentage of the total EEC GNP, amounts to only 17·1 per cent. and that percentage reflects an overvalued exchange rate of the pound sterling, we are contributing more to the EEC budget than any reasonable calculation based on our capacity to pay would justify.
    So much for the gross contribution. What about our receipts and our resulting net payment? Here once again
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    we confront the failure of the Government to rectify the imbalance between the United Kingdom's contribution and the United Kingdom's receipts from the EEC budget. We are now heading towards the third anniversary of the Prime Minister's insistence that that problem must be solved speedily and on a permanent basis. It is three years since she told the rest of the EEC that she was not prepared to go on playing Lady Bountiful to the Community. It is three years since she insisted that the present inequitable arrangements had to be replaced by those that would have left us in broad balance with the EEC budget. It is three years since she insisted so vehemently that after all it was our money. The House knows that in the end she was fobbed off with a two-year temporary arrangement and the Commission mandate to which I have referred. That mandate yielded virtually nothing. An additional year has now been added to the two year temporary period. In her efforts to solve the problem earlier this year the Prime Minister succeeded only in entangling herself more deeply in the procedures and rules of the Community.
    In the absence of an agreement, the Prime Minister was obliged on 25 May this year to accept a further ad hoc one-year agreement for Britain's budget payment. In the debate on 26 May the Foreign Secretary told us that the Commission estimated that the United Kingdom's net contribution in 1982 would be £880 million. He said:
    "We have accepted a basic refund of £490 million, which, on the basis of the Commission's estimate, will make the United Kingdom's contribution, after refunds, one of £390 million."—[Official Report, 26 May 1982; Vol. 24, c. 942.]
    The Foreign Secretary went on to explain the formula agreed for that year should the £880 million net contribution be exceeded. This arrangement which was imposed on the United Kingdom came too late for the arithmetic to be recorded in the draft preliminary budget for 1983. As the House will have noted, in the relevant tables there is simply a gap for 1983 under the heading
    "Supplementary measures in favour of the United Kingdom",
    and it is partly that which gives that misleading impression of the relatively small rate of growth of the overall Community budget for 1983.
    What I find surprising is the lack of any serious discussion of the 25 May agreement in the Treasury's explanatory memorandum which, after all, was produced only on 2 July. We must know the precise figures now for the payment to the United Kingdom that has beets agreed for 1982, including by now the details. I had hoped that the Financial Secretary would tell the House more about this and also whether any new conditions had been imposed or were likely to be imposed in the new regulation that under these arrangements will have to be issued by the Brussels Commission.
    I should also like to hear the Government's explanation why the financial mechanism which, with the benefit of hindsight and experience, they renegotiated in 1980 has failed yet again and apparently will continue to fail to yield any return to the United Kingdom. I have no doubt that the Financial Secretary will assist us with an explanation.
    Mr. Ridley: The right hon. Gentleman will know that it was his own Government who negotiated the financial device to which lie has referred. On no occasion has it yielded one new penny of refund.
    Mr. Shore: The Financial Secretary has missed the point entirely. I agree with him that the financial mechanism which was negotiated as an attempt to undo the

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    damage done by the previous Government in 1971 failed to do that. Unlike a number of other people, I thought at the time that it would fail to do it, and I said so. But the hon. Gentleman has missed the point, because what is remarkable is that when, in the negotiations which led up to the 1980 agreement conducted by his own Government, measures were sought to assist the United Kingdom at least in the preliminary period before a permanent settlement could be found, the financial mechanism was renegotiated. A mark II financial mechanism, with all the authority, experience and expertise of the present Government, was devised. But mark II is no more successful than mark I was. Not a single refund has come through the triggering of that mechanism. Therefore, all has to be loaded on the fall-back fail-safe mechanism—the supplementary measures. But I am still waiting for the hon. Gentleman's explanation. Obviously he is not aware of what happened, and we look forward to hearing from him when he has had time to reflect on it.
    The details of the settlement for 1982 and the sums of money to be allocated for it in the 1983 budget are entirely secondary to the massive defeat that the Government sustained in their effort to obtain a lasting and sensible solution to the scandal of our unjust and disproportionate contributions this year.
    As long ago as 31 March 1982, the Prime Minister, reporting on the European Council Meeting, told the House that decisions on all aspects of the mandate must be taken together; that is to say, decisions on the budget, the common agricultural policy and industrial and social affairs of the Community. Because no satisfactory arrangements had been reached at the end of March on either the CAP, the industrial and social affairs of the Community or the total shape and finance of the Community budget, the Prime Minister made it plain to the House and to our fellow members of the EEC that there would be no British agreement to the agricultural price settlement for this year unless and until Britain's budget problem was settled. In short, Britain would use the veto on the agricultural price settlement until the 30 May mandate was agreed and a just and lasting settlement to Britain's budget problem was achieved.
    As the House knows, the British position was destroyed at the meeting of the Council of Agricultural Ministers in Brussels on 17 and 18 May when, consciously and deliberately, the Council overrode the British veto and simply declared that the veto itself, which had been in place ever since the famous Luxembourg compromise of 1966, simply did not apply. Thus the Government's bargaining power on Britain's budgetary contribution was destroyed at a stroke.
    Not only was our bargaining position destroyed. The central convention that had dominated the conduct of the EEC for the past 16 years—the central constitutional convention which was prominently displayed during the referendum campaign in Britain in 1975 and in the 1971 White Paper prior to the right hon. Member for Sidcup signing the Treaty of Accession—was destroyed with it.
    The following day, the Prime Minister herself said that the decision was "without precedent" and had serious implications. The Minister of Agriculture, Fisheries and Food told the House on 19 May:
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    "the Council had violated an accepted convention under which all previous price fixings had been adopted."—[Official Report, 19 May 1982; Vol. 24, c. 352.]
    The gravity of the decision and the implications for the United Kingdom have not yet been understood fully either in the House or in the country. Of course, the Foreign Secretary raised the matter, as he had to, at the Luxembourg meeting of the Council of Ministers on 20 and 21 June. There was little to comfort us when he reported back to the House on 22 June. He could not get that decision negatived, cancelled or reversed. Nor could he get any guarantee that the veto would not be overridden again whenever other member countries thought it right to do so. The best that he could tell the House was that
    "where … very important interests are at sake"—
    this is the old doctrine—
    "discussions must be continued until unanimous agreement is reached, and that Community business should continue to be governed by this principle. This position was supported unreservedly by two member States and by two others with minor qualifications."—[Official Report, 22 June 1982; Vol. 26, c. 155.]
    The Foreign Secretary refrained from saying which member States unreservedly accepted the British view. However, we know from the statement made by the Minister of Agriculture, Fisheries and Food the previous month which States they were.
    On the occasion when the offence was committed, we had the support of the Danes and Greeks. But that should give us little satisfaction, because the combined voting strength of the United Kingdom, Denmark and Greece is insufficient to prevent the other Community States from obtaining the qualified majority that the voting rules require. If they had had that voting power, the original offence could never have been committed. But it was, and it is plain that there is nothing, now that the 1966 convention has been broken, to prevent it from being broken again. All that we have is the report by the Foreign Secretary that there were two other member States which, with minor qualifications, broadly supported the principle of the national veto and the Luxembourg compromise.
    But this, too, is totally unsatisfactory. By definition, those two other unnamed States which supported our position in June with minor qualifications were among those States that voted in the first place to violate the Luxembourg compromise on 19 March. As the Foreign Secretary was candid enough to confess to the House, there cannot be any certainty about future conduct. He went on to say that he would have preferred a clear-cut result. So would we all. It is not clear to any of us what a clear-cut result or commitment can now involve. There is no possible way in which a clear-cut commitment to the doctrine of the national veto can be obtained without a change in the Treaty of Rome. There is a great irony in all that. It is now just over 10 years since, as Opposition spokesman on European affairs, I tabled an amendment to the European Communities Bill which would have enshrined in the European Communities Act 1972 the veto principle that we were all then assured was universally accepted and inviolate. We forced a vote. The amendment was defeated by only 13 votes on 13 June 1972. It is rather interesting to note who voted against it. The Financial Secretary voted against it. He is to preside over the budget council this coming week. He was not alone because his colleague the Economic Secretary voted in the same Lobby, the Chancellor of the Exchequer voted in the same

    669
    way, and so did the Prime Minister who has complained so bitterly about the lamentable results. I urge them to reflect.
    I should have thought that the remedy to the budgetary problems is clear. We have urged it upon the Government again and again over the past two and a half years. The only leverage that we have on the EEC countries is to amend the European Communities Act 1972 so that we can halt at will the outflow of British money, the Community's so-called own resource. We should then insist upon a proper net contribution to the EEC, one that is approved by the House. We have offered immediate assistance to the Government in both the framing and passage of such amending legislation. That is only the first part of a larger process of disengagement from the Treaty of Rome to which we are committed. For all the Prime Minister's bombast, the Government will not tread that obvious road to a solution. I invite the House to consider carefully where the present course is leading.
    The Prime Minister has come a long way since she insisted that it was our money. She has found that no mixture of threats or blandishments has yielded any lasting solution to the outrage of our budget contribution. She has only managed to obtain a temporary reduction and study. The mandate does not offer any solution. It devotes only two of its more than 30 pages to discussing the British budgetary problem. The rest of the document is given to the ambitions and fantasies of the Commission, seeking as always to enlarge its activities, to promote European union and to widen its competence into still larger areas of the affairs of member States.
    The solution that the Commission has in mind is not one that would give a permanent balance to Great Britain's payments and receipts to the budget, nor one that would demand any drastic curtailment of expenditure on the common agricultural policy, but a solution that would involve, in some unquantified and undemonstrated way, a new possible balance that could be struck if there were to be a vast increase in social, regional and industrial policies, and expenditure upon them, under which Great Britain might conceivably receive more than it now pays.
    There is the great paradox and disadvantage. Such a solution would involve a substantial increase in the Community's own resources. I warn the Government that that road is not one that they should even contemplate pursuing. The Opposition have had enough of these annual occasions when we can do nothing but express our opinion. We cannot make any decisions about the European Community's budget or our contributions to it. We have to continue these exercises, and we hope that the Financial Secretary, out of some primitive instinct for self-protection, will seek to advance the British cause at the forthcoming meeting of the budget council. We have little confidence in his capacities, although in the national interest we wish him such success as may be possible.
    10.35 am
    Sir Michael Shaw: I have listened, as always, with considerable interest and admiration to the speech of the right hon. Member for Stepney and Poplar (Mr. Shore). His most notable contribution was that of gloom. I assume that that was intended. There was a complete lack of hope that we could achieve what we are seeking in the Community. From that I am convinced that the Labour Party is bent on getting this country out of the Community as soon as it can. That being so, we are put
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    at a great disadvantage in our negotiations. When discussing the problems and how best they can be overcome to better not just our position but that of other countries of the Community, our influence must be restricted by the obvious divisions within the House.
    As my hon. Friend the Financial Secretary said, this is the ninth in the series of debates we have had on the preliminary draft budget of the European Community. It seems less than a year since we last discussed the topic. That is not surprising, because the last budget has been with us for a long time and is still not entirely resolved. We have been told that it is to be resolved in its original form. I am not clear whether any formal declaration has been or will be made or whether—as on one occasion—it will be accepted with no further comment by the Council. I should be interested to know whether that is so.
    We also have a first supplementary draft budget. In all probability, we shall have a second in the autumn. The 1982 budget has been a protracted affair. There was a time when such affairs took up a great deal of my political life, but nothing can be more boring than the endless recollections of someone who has been a professional in a certain area, so I shall try to keep my contribution brief.
    I congratulate my hon. Friend the Financial Secretary and the Government on their work during our Presidency. Although the debates in December on the 1982 budget ended unhappily, as my hon. Friend said, a certain positive good resulted. In substantial measure that was due to my hon. Friend's work.
    Under the 1975 amended treaty, which was ratified in 1977, the joint budgetary authority was set up consisting of the Council and the Parliament. Sooner or later they had to learn to work together. In the main, the years since then have shown the difficulties in achieving that desirable objective. In only one year was the budget agreed on time by the Parliament and the Council. I hesitate to say this, but it was the year in which I was the rapporteur for the Parliament. In every year since there has been disagreement and falling out. That cannot be good for the Community's future.
    My hon. Friend, when he was president of the budget council, saw the need for an agreed interpretation of treaty provisions. Every time that we came to an argument about what various sections meant, a clear decision on an agreed interpretation was fudged. I did not mind too much, as I reckoned that I could fudge as well as anybody, and more often than not the advantage lay with ourselves in Parliament, but things could not go on in that way indefinitely.
    In addition, there was not a proper conciliation procedure between the Council and the Parliament. Although I was hesitant in my view, my hon. Friend was right to persuade his colleagues in the Council to go to the Court to seek an official interpretation. That brought matters to a head, and agreement has now been reached between the Parliament and the Council. It was preferable to reach agreement than to go to the Court. The understanding must be honoured. It is much easier to take a flexible approach provided that it is agreed by both parties. In a sense, it is the old argument of a written constitution or one such as we enjoy.
    A joint declaration was made by the parties on 30 June. It may prove to be an historic declaration. It was made by the European Parliament, the Council and the Commission on measures to improve the budgetary procedure.

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    My hon. Friend raised the question of classification, which has been an annual problem. If paragraph I of the declaration can make it absolutely clear to all into which classification—non-obligatory or obligatory—items fall, it will take out a tremendous amount of annual argument.
    The arrangements under paragraph II are wise. They seek to sort out how new items of expenditure can be classified as quickly as possible so that the general movement of the budget procedure is not held up and serious differences do not remain between the parties.
    Paragraph III refers to "interinstitutional collaboration" in the context of the budgetary procedure. In the past, inadequate provision was made for the way in which the Parliament and the Council got together to thrash out differences of opinion. As far as it can, it makes sure that proper time is given not only for discussion between the two parties but for deliberation afterwards, so that their views can be taken into account before the final draft budget is put forward by the Council.
    Again, for example, in regard to the new rate of increase in non-compulsory expenditure, systems are laid down whereby meetings of the heads of institutions can be arranged to sort out differences as and when they arise, rather that to leave then to the end. On three or four occasions other matters are taken up in the document.
    I wish specifically to refer to fixing the limits of expenditure, the existences of lines in a budget and whether they provide a legal basis for expenditure. These matters are fundamental to the Parliament. I often disagreed with many of my hon. Friends in the European Parliament. Many felt that because there was a line in the budget, it was automatically an authority for the Commission to spend the money. That must be wrong. If money can be spent only by the creation of a regulation, whatever budgetary powers the Parliament may be given and may rightly exercise in accordance with the treaty can be nullified if the Council refuses to adopt a regulation.
    A compromise is built into the declaration—an acceptance of the Parliament's rights to a certain extent by the Council and an acceptance of the Council's point of view by the Parliament. The compromise shows that it is possible for true conciliation to take place between the two parties and it augurs well for the future.
    The last paragraph of the declaration deals with the financial regulation and the need for its early revision. How long it will be before that revision takes place? In December 1977, when I finally got through the revised financial regulation, I built into it a specific provision that the financial regulation should be reviewed every three years. I did that deliberately as I knew that with direct elections and, frankly, the fact that, thorough though my own review had been, it was impossible to pick up everything in one review, it would be necessary for the document to be changed from time to time. Therefore, I wished to force those concerned to reconsider it every three years. Five years have now passed and the document is still floating around the corridors of power waiting for people to make up their minds. When are they likely to do that and when is this likely to be adopted?
    On the European budget itself, convention has it—
    Mr. Spearing: Ah!
    Sir Michael Shaw: I know that the hon. Gentleman does not agree with convention, but convention has it that
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    the Council and the Parliament do not interfere in each other's budget. If such a convention is to last, each institution must appreciate the absolute necessity of showing that it is conducting its affairs with the utmost responsibility and internal discipline.
    It seems clear that mistakes have occurred, particularly in relation to the Parliament. The expansion through direct elections and the heavy additional costs involved have not been reflected in an appropriate updating of its financial system and the staff who run it. The inadequacies disclosed by the Court of Auditors show how right the Parliament itself and many others, particularly the British members, were to insist that the Court of Auditors be set up.
    Mr. Douglas Jay: As the hon. Gentleman is such an expert on the subject, can he tell us how soon that report will be published so that we can read it?
    Sir Michael Shaw: I cannot tell the right hon. Gentleman that, although rumours reach one as to what is in it. On the evidence so far published—the reaction of the Parliament—it is clear that there has been fairly far-reaching criticism. The most important aspect of that reaction has been that the President, Mr. Dankert, has taken this problem upon himself, and I praise him for that. That is vital, because the future respectability and influence of the European Parliament depend on its getting this right. Therefore, it is absolutely right that Mr. Dankert and whatever committee he cares to set up should take that responsibility. Having done that, he should then implement any recommendations made by whatever consultants he calls in to advise him on these matters. Above all, he must put at the head of the financial department of the Parliament a higher grade of official than it has had so far, because things have not improved since the old days.
    The amount of money passing through the hands of Parliament has increased enormously with all the expense of moving to different places and the greatly increased number of people involved. Unless credibility is built into the whole parliamentary system and the public are assured that matters have been put right and will be kept right, no one will take the European Parliament seriously. Having said that, I believe that Mr. Dankert has done the right thing, and I wish him good luck in what he has undertaken.
    Finally, too often there has been disagreement between the Parliament and the Council on the budget. Changes have been made this year which I believe will help to bring agreement at the end of the discussions. The declaration is an important move in that direction. As a result of those changes and agreements, and perhaps because a British member of the European Parliament is rapporteur for the 1983 European budget, I hope that once again we shall be able to reach agreement at the proper time—in December this year.
    10.59 am
    Mr. Ron Leighton: The Community budget is an extraordinary arrangement. Its effects are wholly perverse and it is completely unsuitable for Great Britain. Its grotesque system of revenue and bizarre use of expenditure are consistently and inevitably anti-British in effect. It is like no other budget I have ever heard of. Indeed, I find it difficult to regard it as a budget

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    at all. I believe that these matters were originally described as the financial regulations, which is a far better description.
    Other international bodies, such as the United Nations, are financed on the basis of ability to pay. Countries contribute according to their size and wealth so that there is some equity in the arrangements. In the financial arrangements of the EEC, however, there seems to be no equity or fairness and no reason or logic at all. It is a club of 10, but only two members pay any contributions and the others are beneficiaries. That seems a very strange way to run a club. Some of the richest nations in the world are net beneficiaries under this arrangement. How on earth can that be justified?
    When we use the word "budget", we think of our national budgets, which tend to be redistributive. We have progressive taxation. The rich are supposed to contribute according to their ability to pay and expenditure is based on some criteria of need. For example, some areas of the United Kingdom are richer than others and I am sure that a study of these matters would show that there are transfer payments between classes and between areas whereby the rich pay in more and the least well-off get more out.
    In the EEC, Britain is seventh in the prosperity league. We are told that we are one of the poorer Common Market countries. So surely, in any sensible, fair, logical or reasonable budget, the United Kingdom would be a substantial net beneficiary. Why should Britain pay any net contributions at all? What is the justification? Where is the logic or reasoning? So crazy and lunatic is the system that we became the largest net contributor. In my opinion, that was quite monstrous. Now, I believe that we are the second largest contributor.
    The Prime Minister said in her speech to the European Assembly on 16 December 1981:
    "The problem arose when one of the Member States, my own country, found itself bearing an unacceptable and increasing budgetary burden as a result of the combined effect of Community policies."
    The words she used were
    "the combined effect of Community policies".
    She was saying that Community policies together had had this effect on Britain.
    How did this situation arise? Basically, there are two reasons. There is the bizarre set of taxes to finance the budget. There are levies on food imports. There are duties on manufactured imports. Then there is a percentage of value added tax. Why was that mix of taxes dreamed up? Presumably, it was to influence the development of the European Community. Presumably, it was to encourage a diversion of trade. Presumably, it was to encourage self-sufficiency in agriculture—to have autarchy in agriculture; to have a siege economy in agriculture within the Community. Presumably, it was to encourage trade between member States and to penalise trade with the outside world. It is somehow thought to be reprehensible and non-communautaire to buy food from outside the Common Market or to import goods from the rest of the world. That seems to be the reasoning behind those taxes.
    If countries have the temerity, or are so delinquent or remiss, as to import food from outside, they will be fined—penalised. They will have to pay a levy or a tax for the sin of importing food from outside the Community, and of course, that money does not go to our Exchequer, but straight to Brussels.
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    Who does the policy hit? It hits us. As my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) said, we are the largest food importer in the world. So the policy directly harms this country. I assume that that was the purpose of the taxes.
    Britain, being a mercantile, maritime world trading nation, has found that this EEC straitjacket does not fit us. We still do most of our trade outside the Common Market. It is quite remarkable how the pattern of trade has not changed.
    Mr. John H. Osborn: Forty-three per cent. of our exports go to the Common Market, so what the hon. Gentleman is saying does not make sense.
    Mr. Leighton: What the hon. Gentleman says underlines what I am saying. If 43 per cent. of our trade—that is, under 50 per cent., if my mathematics are correct—goes to the EEC, it means that 60 per cent. goes to the outside world. I thought that that was what I was saying. Even after a decade in the Common Market, most of our trade is with the rest of the world. We are an internationalist country; we trade on a world-wide basis.
    I understand the hon. Member for Sheffield, Hallam (Mr. Osborn) getting a little confused, because sometimes the propagandists juggle with the figures. There is much statistical trickery. Often these professional propagandists do not compare like with like. They compare the EEC Six with the EEC Ten, and then they lump in Lomé, aggregate that, and then come up with a curious figure. So it is remarkable that the pattern of our trade has hardly changed since we joined the Common Market. Most of our trade, as we have all agreed this morning, is outside the Common Market. We are therefore fined and taxed because we trade in that way. That is why we pay more. It is completely inequitable and unfair, and, moreover, it is anti-British.
    Mr. Hugh Dykes rose—
    Mr. Leighton: No, I shall not give way. The hon. Member for Harrow, East (Mr. Dykes) always refuses to give way, so I hope that he will excuse me if, on this occasion, I continue.
    In my view, the mischief is compounded when we turn the penny over and look at what the budget is spent on. It is spent overwhelmingly on the common agriculture policy, financing food surpluses. It so happens that we do not have any—or rarely have any—food surpluses. So although we pay more, when we look at the purpose of the expenditure—financing food surpluses—we do not benefit. We pay more than anyone else and we draw out the least.
    We are told by "Europeans" that that is our fault. In other words, we should change and adapt ourselves, stop being internationalists, and stop importing food and goods from the rest of the world. We should seek to break off our relations with the rest of the world and deal only with the Continent. They are saying that if only we would be good Europeans, we would not have to pay as much. They are asking us to change our nature and history, and basically stop being British—to become, perhaps, an imitation of France.
    There is an irony here. If the policy were to succeed, and if infra-Community trade were increased, Community revenue would diminish to the extent that it increased, because if we no longer traded internationally there would

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    be no levies or taxes. If we traded only with one another, the revenue would diminish, and the process would be self-defeating.
    I quote an article entitled:
    "French doubts about Britain's ability to adjust to Community"
    It appeared in The Times, dated 22 January 1980 and said that
    "When Sir Ian Gilmour, the Lord Privy Seal, meets French Ministers in Paris tomorrow to sound out France's views on what Britain is seeking to obtain from the EEC at the European summit"—
    he would find—
    "continuing doubt, which the Dublin summit"—
    this was after the Dublin summit—
    "has done nothing to dispel, as to whether, in the words of a senior official, the EEC corset is not a little too tight for the British Prime Minister and whether a somewhat looser garment would not be more suitable … The fundamental issue is whether British consumer habits, British trade and British industry, based on continued dependence on third countries, which in turn accounts for the huge size of the British contribution, are not incompatible with an economic community as it is organised at present."
    Those were the worries of the senior officials of the Community and that is what the then Lord Privy Seal was told at that time.
    The Continentals want us to change and to become like them. The British want the Community to change. We continually talk of reform. Everyone said that we must get inside the Community and reform it. We have tried to do that for 10 years, but without success. Indeed, I do not see why the Continentals should change. It is their Community and it was established by them without us. Why should we be so arrogant as to think that we ought to change what they are doing, so that it suits us? Despite all the endless talk of reform, restructuring the budget and so on, we must face the fact that the Community has not changed and will not change. It does not suit us.
    Our budget problem has not been solved. There is a temporary, patched-up, bodged-up, ad hoc arrangement and the mandate of 30 May 1980 has come to nothing. The Prime Minister said in her speech to the European Assembly:
    "The Community agreed, on 30 May 1980, that the problem should be resolved … 'By means of structural changes'"—
    but here comes the interesting bit—
    "without infringing basic Community principles.'"
    How can that be done without infringing basic Community principles?
    We constantly hear that the CAP is to be reformed. The Foreign Secretary told the European Assembly last year, that the CAP was
    "an expensive and wasteful anomaly that must be corrected"—
    but, again, there was the qualification—
    "but not so as to undermine the principles of the CAP".
    How can we reform something without changing it? How much longer must we endure a budget that is dominated by one sector—agriculture—and is clearly detrimental to one nation—Britain?
    Is there a solution? We could scrap the taxes that form the budget and go over to a system of paying a percentage of GDP. Another approach that would find favour in some quarters would be to extend the budget and to make it up to 400 per cent. bigger. We would spend as much as we do now on agriculture and hand over even more so that our
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    industrial and social policies are also run from Brussels. I do not believe that that is on. Only a few slightly fanatical Tory Members—a tiny minority—would wish to follow that course.
    Mr. Spearing: While only a tiny minority in the Conservative Party wish to follow that course, it is the expressed policy of the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) and, presumably, of Alliance Members. That is their complete policy, but they try to hide it from the British public.
    Mr. Leighton: My hon. Friend is correct. It was only in the interests of brevity that I cited the Prime Minister rather than the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) who has not graced our debate. The right hon. Gentleman made a valedictory speech in which he set out the alternatives and explained clearly that the course that I have outlined was favoured by him and presumably, the SDP. That is one of the more persuasive reasons why no one should support the SDP.
    The most sensible solution would be to end the common financing of agriculture and the indefensible CAP and to return responsibility for agriculture to the member States. If the French or anyone else want to subsidise their less efficient farmers and to give them a good standard of living by charging high prices to the consumer, let them do so—but not at the expense of the British taxpayer.
    We should abolish the CAP. Why is it so important? I have never understood how the security and prosperity of Western Europe can depend on something as lunatic as the CAP.
    I have no confidence in attempts to reform the CAP. The Conservative manifesto for the last general election made the clear commitment that prices of goods in structural surplus would not be increased. In real terms, as inflation marched on, as it has under this Government, prices would come down, the laws of supply and demand would work and we would eliminate the structural surpluses That promise has been cynically broken under threats from the Common Market and we have just had another huge increase in CAP prices, which entrenches the policy.
    The only way out for us is to pull out of the CAP, to say that it does not suit us and will only cause endless arguments between us and the EEC, and to refuse to pay more than our receipts. It was the announced policy of the Prime Minister that we should break even. If we cannot get international agreement we shall have to take unilateral action.
    We should stop writing the cheques. We should intercept "our money"—it is not legally our money—en route to Brussels as a means of putting pressure on the EEC institutions. We were told that the way to exert pressure was to refuse to agree to the farm price settlement, but our veto was overridden. We have another card that could be played; we could refuse to pay the money.
    For the long term, I support the Labour Party policy, which had a five-sixths majority at our annual conference. A central point of our next election manifesto should be that we should agree, without recriminations and in an atmosphere of friendship and amity, to Britain's withdrawal from the EEC, which does not suit us and only causes trouble between us and our Continental friends.

  Royal Assent
  Mr. Deputy Speaker (Mr. Ernest Armstrong): I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts and measures:

  1. Aviation Security Act 1982

  2. Merchant Shipping (Liner Conferences) Act 1982

  3. Northern Ireland Act 1982

  4. Tees and Hartlepool Port Authority Act 1982

  5. Lloyd's Act 1982

  6. Cumbria Act 1982

  1. Pastoral (Amendment) Measure 1982

  2. Clergy Pensions (Amendment) Measure 1982

  European Communities Budget
  Question again proposed.
  11.20 am
  Mrs. Sheila Faith: I should like to apologise for the fact that I may have to leave before the end of the debate, which means I shall be unable to hear the reply of my hon. Friend.
  On all sides, there is some disappointment with the budget. We shall still be contributing £400 million. A long-term solution remains to be reached. I cannot, however, agree with the hon. Member for Newham, North-East (Mr. Leighton) that the budget is anti-British. It has to be remembered that we were late entrants to the Community. We knew that the farm price arrangements would not be to our advantage and that, as food importers, we would pay a disproportionate amount into Community funds.
  The Labour Party is committed to withdraw from the Community. This is because the Opposition have shown no ability to improve our situation. During the period of office of the Labour Government, in spite of renegotiation, our contribution to the Community increased every year from £31 million in 1973 to £947 million in 1979.
  The right hon. Member for Stepney and Poplar (Mr. Shore) talks of our failure to renegotiate. The Opposition's failure was monumental. On the other hand, almost immediately after taking office, the Prime Minister, showing her usual tenacity and skill, achieved beneficial short-term changes. It is, perhaps, understandable that the Labour Party should be so lacking in confidence in its own ability to negotiate that it has decided to withdraw from the Community in the improbable event that it wins the next general election. It is even more astonishing that elements in the Conservative Party should be so bogged down with food surpluses that they are unable to see the opportunities that would be lost and the dangers that we would face if we did not participate.
  The Labour Party looks to the Community as a scapegoat for our lack of competitiveness and productivity. It has not the will to tackle the basic problems of our economy and would be happy to see us deteriorate to the standards of eastern European countries. These countries are the natural allies of those who are far to the left of other members of the EEC. Rather than listen to the Labour Party, I shall listen to the industrialists in my constituency.
  I am privileged to represent a constituency where there is diversification. Most industrial sectors are represented, either in my own area or in the neighbouring towns of Burton and Derby. On my visits to factories, I hear different opinions on various matters. Those firms that are importers of commodities say that they would like to see a high pound. Those firms that are exporters say that would like to see a lowering of exchange rates. Without exception, all have stressed to me the importance of Britain staying within the EEC and taking advantage of a market of a quarter of a billion people.
  Our exports to Europe have increased much faster than our exports to the rest of the world. They have grown by 28 per cent. as against 19 per cent. to other countries. These figures cannot be disputed even by the hon. Member for Newham, North-East. If we left the EEC, 2·5 million jobs would be lost.
  Mr. Straw: Will the hon. Lady say on what basis she calculates that 2·5 million jobs will be lost? How does this

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  square with the assertion of the Minister of State, Foreign and Commonwealth Office, on Wednesday that only some thousands of jobs would be at risk?
  Mrs. Faith: I believe that 2·5 million is a conservative estimate. It is an opinion held by many industrialists.
  In the northern part of my constituency there is a strong textile tradition. This industry benefits from the multifibre arrangement, which gives better protection than any agreement that we could negotiate separately, and with less retaliation. United Kingdom employment training schemes benefit from the European social fund, which the Commission proposes to expand. This money has helped to retrain unemployed textile workers in new skills. It is gratifying that some transfer of resources from agriculture to the regional development and social funds has occurred. It will be most beneficial to this country. While agricultural spending is to increase by 2 per cent. the social fund will increase by 26 per cent. and the regional development fund by 22 per cent. Agricultural spending has fallen from 80 per cent. of the budget in 1978 to 64 per cent. in 1981.
  Agriculture is also a large industry, as large as any other, in my constituency. Dairy farming is predominant. My farmers complain that their incomes have fallen by 50 per cent. over the past five years. They have expressed satisfaction over a rise in farm prices of over 10 per cent. with no accompanying revaluation of the green pound. The effect on the retail price of food will not be great. It will amount to perhaps 1¼ per cent. to 1½ per cent. The effect on the overall retail price index will be of the order of a quarter of 1 per cent. My farmers are also pleased that the co-responsibility levy has been reduced, and that the proposed change to a higher levy on farmers with large herds has been dropped. This would have discriminated between farmers in this country. They welcome the fact that school milk subsidies have been increased to 112 per cent., so that local authorities will be encouraged to take advantage of cheaper school milk.
  Mr. Leighton: Will the hon. Lady explain why the farmers in her constituency are happy to pay a co-responsibility levy on milk, which, I understand, is intended to deal with a milk surplus, when we produce no surplus in this country? Why are farmers being taxed?
  Mrs. Faith: I think that they are happy that the co-responsibility levy has not been increased but has been reduced. They appreciate that this levy helps to promote plans for the sale of milk and milk products.
  No one can ignore the fact that food shortages will become a major problem as the population in the developing world increases. There can be no doubt that, at a time of grave world shortages, it is imperative that we should be self-sufficient in food. Since joining the EEC, Britain has become more self-sufficient in food and has saved imports of £850 million. Although the CAP may not be the best way of supporting agriculture, it must be borne in mind that there is no longer any easy method of securing cheap and plentiful supplies of food. It is estimated that national Government support to replace the CAP would cost £2 billion.
  It was unfortunate that a decision on food prices should have been forced through by the over-ruling of the Luxembourg convention. The link between farm prices
  680
  and budget contributions is surely realistic, because of the direct effect of one upon the other. Although it may not be possible for us to use the convention again in quite the same way, we must continue to support its use. The right of this veto was an important point that was put to the British people during the referendum campaign in 1975. I am optimistic that we shall have the support of Greece and Denmark on the matter. The veto was also an important condition of their entry to the Market.
  While some would say that the progress of the Community over important budgetary matters has been painfully slow, frustrating and difficult, it is a measure of the basic strength of the EEC that present day disputes are over such matters as fish, lamb, turkeys and farm prices. It is unthinkable today that any European country would consider taking up arms one against another. This would have seemed impossible 40 years ago. For this situation, we must thank the EEC.
  As the western States of America become more powerful, our interests do not always coincide with those of the United States. As America's most loyal ally, our voice is especially important in Europe. Because of our geographical position, it is ridiculous to think that we could manage without European co-operation. These particular budget negotiations have been difficult and frustrating but we must continue our attempt to obtain the best possible arrangements in the future. We cannot dispute the value of our membership.
  11.30 am
  Mr. Nigel Spearing: I am pleased to follow the speech by the hon. Member for Belper (Miss Faith) because it typified the illogicalities of those who propound our continued membership of the EEC. I shall attempt to describe some of the illogicalities.
  The hon. Lady said that we knew when we joined the EEC about the disadvantages that we would experience in respect of food. She might have heard about them, but I had not. The illogicality is clear. Those who claim that they knew of the disadvantages said that we could change the EEC when we joined. At the same time, they said that we would protect our own interests by the use of the veto. That same veto also protects other countries and prevents the changes that we have discussed in the past five years. The hon. Lady and her friends cannot have it both ways. A great publicity con took place at the time of our entry and some people—including the hon. Lady—continue to believe it.
  The hon. Lady also discussed employment and trade. She talked of a secure market of millions of people, but it does not exist. All that we have is a tariff-free potential in that market—and the manufacturers there have that potential in our market. Figures were published in written answers to the hon. Member for Southend, East (Mr. Taylor) last week. We are running a deficit in manufactured goods with the rest of the EEC of £3 billion a year. Before our entry we were in balance. How many jobs does that involve? We may begin to export oil, but producing oil does not usually create many jobs, while producing manufactured goods does.
  The hon. Lady said that 2·5 million jobs would be lost if this country were to leave the EEC, but she refused to provide a back-up calculation. She did what most hon. Members have learnt not to do—make a statement without any back-up knowledge or reason.
  Mr. Dykes: On a point of order, Mr. Deputy Speaker. Is not this debate about the preliminary draft budget?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): The Chair decides when an hon. Member is out of order.
  Mr. Spearing: I am coming to the budget, but if the hon. Member for Belper was in order—and she must have been—surely it is in order for me to reply to her arguments.
  I challenge the hon. Member for Belper and the whole of the European movement. She must tell us how 2·5 million jobs are involved. The benefit to Britain in terms of increased manufactures here would at least be on the cards if we withdrew. The Minister of State said last week that hundreds of thousands of jobs would be at risk, but I contest that.
  Mr. Straw: The statement that we extracted from the Minister of State, Foreign and Commonwealth Office, last week was important. I thought that he said that hundreds of thousands of jobs would be lost if we were to leave the Common Market. He corrected me and said:
  "I did not say that jobs would be lost. I said that they would be put at risk … Moreover, I referred to thousands of jobs, not to hundreds of thousands."—[Official Report, 21 July 1982; Vol. 28, c. 423.]
  That is in contrast with the wild claims of people such as the hon. Member for Belper, the CBI and the Secretary of State for Industry. The Minister of State has reduced the adverse consequences of withdrawal to thousands of jobs possibly being at risk. It is important to have on the record that statement from an ardent pro-Marketeer.
  Mr. Spearing: I am grateful to my hon. Friend. I suggest that the hon. Member for Belper and others turn their attention to other policies that put jobs at risk. We heard the other day that building the replacement for a ship that went down in the Falklands, even if men worked free of charge, would cost more here than elsewhere. If the Prime Minister insists on competition, our industry will disappear altogether. We should consider that rather than the risks of withdrawal from the EEC.
  I am surprised at the absence of Members from the Liberal/SDP alliance. We are discussing paying no less than £2,700 million in public expenditure to a body which members of the alliance believe we should belong to and who believes that its remit and power should expand, and yet they have not put in an appearance this morning.
  Mr. Jay: Would it not be rather unreasonable to expect the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) to be here as early as 11.30 am?
  Mr. Spearing: Hon. Members will have their own views about the right hon. Member for Glasgow, Hillhead (Mr. Jenkins). If he arrives, two empty Benches are ready for him to occupy.
  The Financial Secretary to the Treasury has views about public expenditure. He is usually against it on principle. He goes about his Department seeing what money is being spent and stopping it. We are here to scrutinise enormous sums. The Minister could cast a beady eye on many areas of expenditure.
  Contrary to public belief, the Opposition do not believe in public expenditure for the sake of it, or in increased public expenditure as a principle. We support public expenditure that is beneficial. It is possible for public expenditure to be not only beneficial but downright harmful. Most EEC expenditure in Britain is directly
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  harmful, not only to our people, but to the interests of the United Kingdom.. I hope that the Financial Secretary will agree that EEC expenditure is against Britain's interests.
  As my hon. Friend the Member for Newham, North-East (Mr. Leighton) said, the budget is not a budget in the normal sense of the word. Unlike the Estimates that we shall discuss next week, is almost impossible to know what the changes will be upon the budget for 1983 for the simple reason that the majority of the charges will be for agricultural support.
  The crops to be supported in 1983 are not yet sown. The crops being planted elsewhere in the world are not there yet. The price of the crops in 1983 is not yet known. Because the bulk of the EEC budget involves the differential between the cost of growing crops in the EEC and the cost of growing crops in many other places, it is impossible to decide what amounts will have to be drawn upon for supporting the prices. The budget is not in any sense a projection of expenditure, although we may have a broad picture of the expected income.
  A mechanism enables the EEC to top up its income in any way that it likes, within limits. The percentage of VAT take can be increased so that it can top up its income from levies and customs duties to the amount required to be paid out for any one year.
  I hope that when the Financial Secretary replies he will tell us what the percentage of 1 per cent. will be for 1983. It is an important figure and it is not given in the memorandum. In its twenty-sixth report, the Select Committee on European Legislation, &c. said that that
  "would leave some 2,944 million ecus (about £1,643 million) within the one per cent. VAT ceiling for later adjustments to the Budget."
  We all know that at some stage that ceiling must be broken. I return to what was said in that respect in the debate on Wednesday. I hope that the Treasury Minister will be able to give some guidance on Government policy on this matter. In the debate on Wednesday 21 July, the hon. Member for Faversham (Mr. Moate) pressed the Minister of State, Foreign and Commonwealth Office about further plans for raising revenue. The Minister said:
  "we do not believe that at present any such proposals would be justified."
  The Minister cannot say that such proposals would be justified at present because we are still within the 1 per cent. limit. However, if world prices remain down, we shall soon be pressing on that limit. It is an open secret that one of the proposals made by the Commissioner to member States is that we should raise more revenue. If we cannot do that by increasing the 1 per cent. VAT, we should do it by putting some form of import tax on oil.
  I raised that point with the Minister for Trade during the debate on 21 July. He would not allow me to intervene when he ostensibly replied to a question that I did not ask. He said:
  "The hon. Member for Newham, South asked whether the Community could impose any fresh taxes that would be binding on Britain without the authority of the House. The answer is clearly 'No'. That would have to be by the unanimous decision of the Council of Ministers, ratified by the House. I hope that will reassure the hon. Gentleman."—[Official Report, 21 July 1982; Vol. 28, c. 421–80]
  That does not reassure me one little bit. The Commission and the Council have the power to raise increased taxes without coming to the House at all. There is nothing in the treaty that says that such a proposal must be ratified by the House. All that it requires is unanimity in the Council or even only a qualified majority. If it

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  required unanimity, it would mean that our Minister would have to give his assent. Could he use the veto? It is questionable. First, we know that the veto is not there any more. At least, it is not there if certain people so choose. Even if it is said that it is in Britain's national interest that we should not have the tax, no doubt somebody would say that it was in our interests. It could be said that, if oil coming into the EEC is taxed, our oil in the North Sea would be of greater value. It could be asked how that could be against our interests. If the Genscher-Colombo plan, requiring written reasons for using the veto, goes through, we shall be caught.
  I gave the Minister notice that I intended to raise this matter today. I hope that he will tell me in his reply that the Minister for Trade was wrong, that the House has no power to ratify the agreement for such a tax and, under the Treaty of Rome, never has done. Of course, there is an informal arrangement for the House to debate it, but that is quite different.
  My right hon. Friend the Member for Stepney and Poplar (Mr. Shore) referred to the repayment that we now have for one year. May I draw the attention of the House to the nature of that repayment? Information was given to the House by the Treasury memorandum dated 25 March which kindly set out in a table the amounts for 1981–82. I notice that they are all going to public works—roads £242 million, water and sewerage £123 million, and telecommunications £290 million, a total of £903 million.
  As is made clear in the text, those projects are not chosen entirely by the Government. We are told that they are put forward by the United Kingdom for Community support. Many more projects were put forward than were passed. We see that they include the construction of a nuclear power station at Hartlepool, the A66 east-west link road and the A1 north of Newcastle in the Northern region.
  If we do not get money next year or the year after, what happenss to the atomic power station and those roads? Irrespective of their merits, do we stop building them, or will the Exchequer take responsibility for their completion? Does the Financial Secretary agree that the choice of these projects was not made by Her Majesty's Government or the House? The choice of where the money should go to is in the hands of Brussels. If the right hon. Member for Hillhead gets his way, he will pass even more money to Brussels and give it even more choice to decide how that money should be spent in Britain.
  Surprisingly, I want to disagree with my hon. Friend' the Member for Newham, North-East. Some hon. Members who come to these debates accuse other hon. Members of making the same sort of speech. They may come to the same conclusions, but I hope that they adduce different evidence. I want to introduce some new evidence today which may startle hon. Members. I hope that it will startle the hon. Member for Belper and her constituents.
  A large amount of money received by Britain from the EEC is disbursed by the Intervention Board for Agricultural Produce which produces excellent annual reports. The most recent report, Cmnd. 8589, tells us a great deal about what is going on. In 1979, it disbursed £353 million, but in 1981, the last financial year, it disbursed £630 million, all of which was paid by the EEC. Therefore, when my hon. Friend said that we did not have agricultural surpluses, and that therefore the EEC was not
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  paying us a great deal in that respect, he was a litle out of date. British agriculture is changing and is being disorted by the market prices imposed on us by the EEC.
  The figures in the report are startling. Last year, the United Kingdom Intervention Board for Agricultural Produce paid out no less than £155 million in support of cereals. There was an export surplus of 3 million tonnes from the United Kingdom. On 19 July I received a written answer which showed where those surplus tonnes went. East Germany and Poland received £1·5 million tonnes at a cost of £40 million. The right hon. Member for Brighton, Pavilion (Mr. Amery) would hop around at that news, as would the hon. Member for Southend, East. Indeed, I think that all Conservative Members would. I am sure that when the Financial Secretary looks at the grain growing areas of the Cotswolds and the areas that are being ploughed up which perhaps should not be, he would be astonished to know that there is a good chance of that grain ending up in East Germany at the taxpayers' expense.
  As my right hon. Friend the Member for Battersea, North (Mr. Jay) says, who knows but that it might be passed on elsewhere, perhaps to the Soviet Union. Therefore, Britain which is popularly supposed to be in grain deficit is now a big grain exporter. It may not be a great grain exporter in net terms because it has to import hard wheat from Canada for its bread, on which h pays levies. That was the situation in 1981. I wonder what will happen to the harvest of 1982.
  Mr. Jay: In addition, were not several hundred thousand tonnes of grain exported direct from Britain to the Soviet Union so that the total export of United Kingdom-produced grain to the Soviet and satellite countries was nearly 2 million tonnes?
  Mr. Spearing: I dare say that my right hon. Friend is correct. Certainly the total exported was 3 million tonnes and the cost of export subsidies to the intervention board was £90 million for cereals alone. However, there are other curious entries for cereals. There is production support for cereals that are manufactured into starch. It amounts to £9 million. Last Thursday, when talking about public expenditure, the Prime Minister had the effrontery to suggest that fewer teachers would mean more people being employed elsewhere. When she was challenged about efficiency, she said that they would just have to teach more effectively, or words to that effect. How many teachers would £9 million buy?
  If the Prime Minister and the Treasury want to reduce public expenditure, should they not consider some of these figures, instead of closing the Museum of Childhood in east London and doing nasty stupid things, paring and cutting out here, there and everywhere? The Government should have a look at these figures.
  It has been said that we do not have a surplus of milk. I am not so sure. Last year the intervention board spent £192 million on supporting milk in Britain, yet we still face the possibility of losing doorstep deliveries. There is something called the co-responsibility levy. I agree with the cut, but what a phrase that is. There is not much co-responsibility about it. It is one of those EEC newspeak words that mean the opposite of what they say.
  We support oilseeds to the extent of £57 million. There may be some justification for that, and I shall try to find out whether there is. However, that £57 million may well be spent to the detriment of others. For the first time we

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  have an extraordinary item before us. I refer to the perhaps modest sum of £108,000 which is to be spent on aid for grape must. Presumably that refers to the nascent British wine industry. Having got its cereal and butter mountains, Britain is now presumably having its own wine puddle, to which we are to contribute £108,000. The Treasury should have a look at that.
  Brussels repays the sums and people may say that as the aid goes to Britain it must be good. They say that it must be a good thing for the money to be spent on British agriculture. However, we all know that British agriculture is not in a healthy condition, despite the enormously increased income that it receives. Conservative Members should talk to their farmers about land and input costs that they are having to bear. The hon. Member for Belper should talk to them. They will claim that, although they are receiving enormous sums—for which we pay the cost by buying food—they are also having to pay out a great deal. Farm income is the difference between input costs and receipts. Farmers may complain most about the cost of rent and of interest. I have looked at the figures, but I shall not bore the House with the details. Broadly, in the 10 years since we joined the Common Market, land values have increased at least six times and perhaps more
  Mr. Jay: They have increased tenfold in some cases.
  Mr. Spearing: I shall be conservative and call it sixfold. I am also told that interest rates have greatly increased. I believe that they are roughly double what they were 10 years ago. My figures may not be exactly right, but they are not far wrong. If the cost of land has increased roughly sixfold and if interest rates have doubled, the cost of land as a factor in the production of agriculture may have increased twelvefold. I stand corrected; let the National Farmers Union give me the correct figure.
  Mr. Dykes: Get on with it.
  Mr. Spearing: The hon. Gentleman will have an opportunity to speak, but some of the factors that I have mentioned are not understood. The money that we receive from the EEC at our expense is going into the cost of land. People in the City buy land. As every farmer knows, they speculate on the value of land. The pattern of agriculture in Britain is being distorted, not only in terms of its husbandry and croppage, but in its pattern of ownership. The EEC adds to the imbalance of ownership.
  Mr. Dykes: That is not true.
  Mr. Spearing: If the hon. Gentleman wants to say that he should get up to intervene. I should be glad to give way to him on that point. I shall not cut short my remarks because of him. If he wants to challenge what I am saying about City capitalists, he should get up and do so. Every farmer in the country knows what is happening. The mechanism of the EEC has accelerated the pace. I do not say that it might not have happened anyway, but the EEC mechanisms acted as an accelerator.
  Due to certain allegations, the European Assembly has recently received some publicity. I shall not repeat those allegations because they are well known and involve travel costs and the use of balances held by officials. The money was possibly misused when it should have been left in the bank. I understand that there has been a leak from the audit board, which will produce a report in due course. The document is available only to Members of the Assembly. If I say anything inaccurate or unfair about the Assembly,
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  I shall happily give way to the hon. Member for Kensington (Sir B. Rhys Williams) if he wishes to intervene.
  Volume 2 deals with the European Assembly's expenditure. It contains some interesting information. I could not get a copy from the Vote Office and managed to get one only on loan—it seems that Sir Derek Rayner has also been in the Vote Office in the past few weeks. Chapter 37 covers grants to expenditure of political groups in the EEC. We call that short money. Under heading 3707 the sum is £2 million. Under heading 3706 about £1 million goes to other political activities, although we do not know what those activities are. Perhaps we shall discover in due course.
  Heading 3708 covers a contribution to the cost of preparations for the next European elections. About £3 million is involved. I am rounding up the figures and perhaps slightly underestimating them. Chapter 29 covers subsidies and financial contributions towards the cost of group visits, and there is about £1 million for that. Heading 2991 involves—I like these words—subsidies towards the costs of visits by "opinion multipliers" for the member States, and the cost is £200,000. However, those sums are modest compared with the sums involved in the main schedule at the front of the volume, which breaks down the broad costs. The hon. Member for Scarborough (Sir M. Shaw) was right: they are considerable.
  I shall summarise. In 1983, salaries and expenses of members will amount to about £20 million, of which travel and subsistence expenses account for about £7 million. The cost of staff will be £50 million and the cost of missions abroad £4 million. On the staff subheading, that adds up to about £75 million. Then there is the item relating to buildings and equipment, £25 million, and grants to certain institutions amounting to £7 million. Broadly, that is £130 million a year. Therefore, it would seem that for about 400 Members it works out, with backup cost and staff cost for Members, at a little over £250,000 per Member per year—an extraordinary figure.
  We know that the audit board is looking at some of the uses of the money, but the hon. Member for Scarborough mentioned that there is a convention that the Assembly does not question the expenditure of the Council and the Council does not question the expenditure of the Assembly. The House is obliged to him for drawing our attention to it. If it persists, how can anybody look properly at the Assembly audit figures, which he rightly says must be done?
  There is a limit to what we can do here. Perhaps the Scrutiny Committee or the Public Accounts Committee will be able to do something; I suggest that they should. But the Council of Ministers has a specific responsibility, because every year the Council has to agree a discharge certificate to the Court of Auditors. The only other body which can do that is the Assembly itself, so it will not be too worried. When the audit discharge certificate next comes before the Council of Ministers for consideration, will the Minister take particular care to see that it is not given the nod by the British Minister present unless and until we are satisfied concerning the audit of the EEC Assembly?
  Sir Michael Shaw: I do not want there to be any misunderstanding. There is, of course, full scrutiny by the Court of Auditors. That was not quite clear from the hon. Gentleman's remarks, although I think he understands it.

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  I wanted that to be absolutely clear on the record. A full audit takes place. That will be part of the report which, presumably, is made public, and it will be part of the general discussion.
  Mr. Spearing: I agree with the hon. Gentleman. The auditors' report comes out annually, but what happens then? Unfortunately, year after year in the past the auditors' report has been heavily qualified. An auditors' report of that sort in the City of London would cause a Department of Trade inquiry to be made. All that has happened so far is that the Treasury Minister or the Foreign Office Minister who sits in the Council does not do anything about it except to grant the discharge certificate, and once the discharge certificate has been granted that is it.
  The whole policy of the Government is based on controlling public expenditure, so I ask them to look at the matter and at all the other points I have mentioned. When it comes to looking at candle ends and doing very small nasty things, the present Administration are very good—or very bad from our point of view—but they take very little notice of what is happening to expenditure in the EEC. I suggest that the Government, in looking at public expenditure, should consider the profligate, counterproductive expenditure of the EEC, which is wide open to abuse. It is an expenditure which has been growing, is still growing, and has to be reduced and stopped. The only way we can do that is to cease to be a member of the EEC.
  12.4 pm
  Mr. Hugh Dykes: The hon. Member for Newham, South (Mr. Spearing) always tends to repeat the same points on these occasions. Today he strayed away from the immediate subject of the budget, although he made some interesting points in the second half of his rather lengthy speech. I hope that he will forgive me if I do not deal with some of those detailed points, because it would take too long and I know that several other hon. Members wish to speak in the debate.
  It was interesting that the Financial Secretary, at the end of his remarks, made a verbal exhortation to the House to approve the 1983 draft general budget and the supplementary budget, although the word "approve" is not in the motion, which is a "take note" motion. I welcome that verbal reinforcement, because I feel that in a fairly fundamental way the budget is making progress in the direction that we have wanted to see in recent years—towards a diminution in the agricultural spending ratio. Partly as a matter of reciprocity but also in its own right, it is beginning to produce for the first time considerable sums of money to be spent in desirable areas of industrial and economic regeneration in the weaker regions of the Community. It is doing so, alas, in part because of the weakness of our own economic system in the United Kingdom.
  Although funds such as the social fund, with its different purposes, and the regional fund are very small mechanisms, they are now beginning to be interesting and serious in terms of the deployment of money in future years. I hope that that process will continue.
  I am also glad that in relation to the United Kingdom the budget position is becoming reasonably satisfactory. I should like to enthuse once again on what the
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  Government have been able to achieve in that area. There is no long-term agreement yet, but, bearing in mind the complexities of the matters involved, it is remarkable that a very satisfactory refund configuration has been achieved as a result of very civilised, although tough negotiations in the past two years. The refunds for the current financial period will be extremely satisfactory.
  Like the hon. Member for Newham, South, I deplore the absence of Members of the Liberal/SDP alliance today. It is extraordinary that people who are supposed to take a close interest in the EEC are absent. I hope that we shall have a proper written explanation as soon as possible from the parties concerned for the convenience of the House so that we may know why the Members were not here. But the hon. Member should not feel too smug, because only four Labour Members have been present.
  It is interesting from a psychological point of view that we continually hear Labour Members talking about small amounts of money in some areas of the Community Buget, yet blandly, year in and year out, when the Labour Party was in office, Labour Members were quite calm about millions of pounds of deficits in the nationalised industries. Frequently they expressed the wish that those deficits should remain rather than be tackled by the Conservative Government who took over in 1975.
  It is striking to note the total amount of money spent by two successive Labour Governments from 1964 onwards on the wasteful and useless nationalisation of industries. It did immense damage to certain sectors, particularly to steel, involving billions of pounds at current prices, because prices more than doubled since those outlays. The Opposition thought that it was marvellous and wonderful and in the national interest to do those things, yet we are dealing here with a modest total Community budget, amounting to £12 billion between all the member States, including the very wealthy Federal German Republic, and the Opposition are deploring that expenditure as being evil and wicked.
  Perhaps we have common ground in the House in welcoming the fact that the agricultural ratio is falling, as my hon. Friend the Member for Be1per (Mrs. Faith) said, to about 65 per cent. this year. That is a notable achievement resulting from a common will in the Community to reduce the ratio from the traditional figure of about 80 per cent. I think that that process will continue, partly with the build-up of the rest of the Community budget and partly by exercising continued discipline in regard to expenditure. As the Financial Secretary rightly said, with great emphasis, the farm spending increases on this occasion were less than the rise in own resources.
  The hon. Member for Newham, South waxed lyrical about the apparent menace of British grain exports going to the German Democratic Republic and other Communist countries. I deplore that, but United States and Canadian grain is also going to the Eastern bloc and we have to ask the same question in that respect. When I was in Moscow in April, I noticed to my astonishment not that the bulk of the butter in the shops was Soviet butter—the Soviet Union cannot produce enough—or that it was EEC butter, which we all complain about when it is sent there as an unusable surplus; most of it was New Zealand butter. Yet the response of Labour Members was:
  "Poor New Zealand must sell some butter."

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  Why do Labour Members try to have it both ways? Why not condemn that if they condemn the sending of apparently unusable surpluses from the EEC to the Soviet Union?
  Mr. Spearing: I shall answer that point immediately. I have no objection to this country or any country sending grain to Russia, East Germany or Poland for a fair price related to the production costs and as long as it does not distort the agriculture of the country concerned. That is so with regard to Canada and New Zealand. However, in Great Britain there is a distortion of our agriculture and that is being done at enormous public expense and with subsidies. That is the difference.
  Mr. Dykes: I knew that it was a mistake to give way. The hon. Gentleman's contribution was as predictable as everything we have heard before.
  On the parameters of the Community budget, we can all agree that, unlike national budgets, it has the virtue of not having a built-in deficit. The receipts and payments should equal each other. That is so with the exception of the Ortoli facility and any outlays through the European Investment Bank, which are not part of the central budget. Therefore, there is no built-in deficit. I suppose that most hon. Members wish that to continue in future.
  Nevertheless, European enthusiasts such as I would say that since the European budget is a vital component of the cohesion, solidarity and future development of the European Community, surrounding the nation States, and, alas, the reality of the modern world is that national budgets seem to have deficits, even if we try to keep them under control, it might not be so shocking in future if the deficitary system in the European budget were to develop under proper discipline and control. However, the difficulty is that it is much harder to achieve discipline and control and correct auditing, as my hon. Friend the Member for Scarborough (Sir M. Shaw) said, in a communitarian system than in a national system. One has to bring together the habits and propensities of experts and accountants from different member States. We joined the Community later than its foundation. Therefore, we tend to have to accept the majority habits of auditors from other countries.
  However, that system might develop in future. I should be interested if the Financial Secretary would refer to this briefly. I refer to other sources of revenue. That area needs to be explored energetically by those with good will who, unlike the hon. Member for Newham, South, like the Community and being members of it, despite its faults, which are inevitable, as in any nation State.
  The alternative sources of revenue, which have been referred to in the debate, are the areas that appear to be, prima facie, the most interesting, partly because of the absence of any other brilliant ideas. The energy or oil import product based levy idea should be explored because, axiomatically and automatically, it would he of overnight benefit to this country, although it would be an extra charge on all the other member States and, I hope, eventual conclusion and recommendation of that area of study and research in the Commission and the financial section thereof is not imminent or looming because there is no sign that the 1 per cent. VAT ceiling will be attained in the near future. It is interesting how the ratio below 1 per cent. of about 0·85 per cent. appears to be steady at
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  the moment. I imagine that that is connected with the inflation of monetary receipts into the EEC budget more than any other factor.
  As a good European—I hope that that does not mean that I am not also a good patriot, as the two can go together—I would not be shocked or upset by the penetration of the 1 per cent. VAT ceiling as soon as may be. That would enlarge the aggregate source of revenue by definition. That would give us a chance, if we can hold down farm spending or allow it to increase less than the rise of own resources in future, as occured this year and last year, to develop a realistic and meaningful Community budget with desirable public spending.
  It is funny how the Labour Party hates Community public spending but loves national public spending. "Let us squeeze the taxpayer for national public spending but not for Community public spending": that is a strange dichotomy in the minds of members of the Labour Party.
  The country would benefit tremendously from the revival of the Northern region and the other outlying less developed regions and in Scotland where there is serious erosion of the economic base, alas, because of the severity of the recession.
  It is no good depending in future on national funds alone for those purposes as we shall have to have a much larger Community budget in future in order, in all practical terms, to get real convergence of economic and financial policy making, which has eluded us so far. It is not enough for us to rely on the will and determination of, unfortunately, a weak financial Council of Ministers. We must have the raw material, which is the money available, to build into a larger Community budget.
  The EEC budget is minuscule. It is a tiny proportion—1 per cent. or less—of the total gross domestic product, of the Community. Until that budget is significantly larger in future, allowing for the conventional year-on-year restraints on public spending and national budgetary objectives— I know that this is a difficult period when there are restraints and there is the need to reduce the rate of inflation—we shall not reach a realistic position. That might be anathema to the hon. Member for Newham, South because of his ideological obsession with the horrors of working with foreigners in the Community—
  Mr. Spearing: No.
  Mr. Dykes: —but it would be of great benefit to the hon. Gentleman's constituents, even in prosperous South-East London, to find that significant Community funds were beginning to flow towards us which would not go simply to the north of England and elsewhere. That would be the meaning and reality of a modern Community, of which we need not be ashamed or fearful and which can be built up and developed in future.
  I welcome this budget. It is a modest instrument in all comparative terms. I thank the Financial Secretary for what he has said and I look forward to his remarks when he replies. I hope that the Government will develop with confidence the need for a long-term refund arrangement, which will mean that we face an agreeable and satisfactory future of paying, on current figures, only £400 million to £500 million into the Community, which is a tiny price for desirable membership.
  12.18 pm
  Mr. John H. Osborn: Dealing with revenue, whether on the national, European or

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  regional scale, is almost as difficult as the problem facing a group of people who are running a company and who are trying to assess what is coming in by way of sales and the costs that have to be matched against those sales and whether they are running a deficit or surplus, a profit or a loss.
  I have attended a number of meetings at which works directors and others have been present. At those meetings there were charts, block diagrams, and the schematic and visual aids which can do much to convey the trends to those who are not in daily touch with the figures.
  I welcome the debate. Admittedly there are no charts, but I have heard hon. Members' points of view. Two Members of the European Parliament, my hon. Friends the Members for Cheadle (Mr. Normanton) and Kensington (Sir B. Rhys Williams) are present. My hon. Friends the Members for Harrow, East (Mr. Dykes) and for Scarborough (Sir M. Shaw) have also made contributions. I know from my period in the European Parliament—and we were all Members together—how much my hon. Friend the Member for Scarborough did as rapporteur to contribute towards framing the budget and what a tremendous responsibility that is on the rapporteur of the European Parliament.
  Three years after leaving the European Parliament, I must relate this debate to the pressures in my own region, and I wish to put forward that point of view. I also relate it to the fact that in the Assembly of the Council of Europe I shall be discussing not only the budget and costs of the Council of Europe but the problems of people living in Europe, relating their problems to those that are experienced in Britain.
  Obviously, the Prime Minister, the Foreign Secretary and the Financial Secretary have to face the blatant implications of the British opposition, wanting to withdraw as expressed by the right hon. Member for Stepney and Poplar (Mr. Shore) the terms put forward in today's debate or the one that we had last Wednesday. This is essentially a debate on the supplementary budget and the draft budget for 1983.
  To have had a presentation from the Commissioner responsible for this would have been of even more value, although I much value the presentation by the Financial Secretary because I know how much he has kept in touch with these matters. But Community expenditure is all-important. Mr. Tugendhat has been round the country to explain this to interested persons—sometimes the European Movement, perhaps sponsored by the local press, including the Sheffield Morning Telegraph—and meeting business men and others. Business men in areas such as my own perhaps have mixed feelings which are understandable, and I shall try to elaborate on them in the course of my speech.
  One of the difficulties in our society is perhaps the force of regionalism. Local loyalties are growing. This is true of Scotland, Wales and to an extent Northern Ireland. But it is also true in my area, Yorkshire, where regional pride is perhaps stronger than it was 10 or 20 years ago. There is also a degree of regional self-pity at a time of great difficulty in that area.
  The Community is made up of people with different languages, different cultures and different traditions. Therefore, the differences between regions are that much greater. But this also gives rise to rivalries and jealousies
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  if one group of people is doing better than another group within a country and across national boundaries. It must be accepted that social readjustment has to go on in Britain, which is dependent on between 33 and 36 per cent. of its gross national product being exported and with such a high percentage dependent on trade whether with the Community or elsewhere in the world.
  One factor which has been lost sight of, although my hon. Friend the Member for Harrow, East touched on it, is that the Community budget is less than 1 per cent. of the total EEC GDP and probably about 1·7 per cent. of the expenditure by all the member Governments. To listen to the hon. Member for Newham, South (Mr. Spearing), one might be forgiven for thinking that the Community budget by far dominated the funds involved in our own Budget. However, it is minuscule. Therefore, it must be kept in perspective, and I hope that that factor will be brought out in the debate.
  What has come out in this debate and the one last Wednesday is the Luxembourg compromise and the fact that Conservative Minsters in Luxembourg on three fronts—agricultural prices, the budget and, perhaps because we were preoccupied with them, the Falkland Islands—had to go through a very difficult period. I may say that in the Council of Europe I was one of the first to stress that.
  What is important is that, although Britain has had the remission—so that the total contribution is of the order of £400 million after the remission—our GDP per capita is the lowest in the Community other than that of Greece, Italy and Ireland. I have the latest statistics from the Library to demonstrate that. Therefore, when there is talk about Britain's contribution, it should be borne in mind that social changes have hit this country very much harder than any of us anticipated 10, let alone 20, years ago.
  I welcome the fact that the agricultural contributions of 10 years ago, which were about 70 to 75 per cent., are 62 per cent. at present and, according to the proposed figure, will be 64 per cent. and not more than 65 per cent. But I have to agree that for an industrial country to find that the Community spends so much on agriculture is a state of affairs that must be changed. All Governments have tried to change it in the past 10 years. I wish the Financial Secretary well, and I hope that the Commission will respond, let alone the Community, by taking the burden off Britain, bearing in mind especially that industrial pressures are very high at present.
  Within the House of Commons, let alone within the Conservative Party, with respect to those of my hon. Friends who are here at the moment, there is the attitude of those who come from the shires. My hon. Friend the Member for Belper (Mrs. Faith) represents a farming community. I cite an example which I have quoted before in the House. When I used to go to the races at Market Rasen in Lincolnshire, all the Rolls-Royces came from Sheffield, Nottingham, Derby and Leeds. Now they are the property of Lincolnshire farmers—and why not? Prosperity in the United Kingdom has moved from some of our industrial cities to agricultural areas because of self-sufficiency, and the production of food in a world with a rising propulation is such an important pressure on Britain and the Community.
  I want, therefore, to relate this debate, and my own contribution, to the problems of the industrial areas. In South Yorkshire, there is concern about the assisted status and about the fact that funds might not be going to

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  Sheffield and South Yorkshire, where I would wish to see them go. I raised this matter in the debate on industry last week. But I received an assurance from my hon. Friend the Minister of State for Industry, and I should like my hon. Friend the Financial Secretary to comment on it:
  "It is true that in general assisted area status gives easier access to European funds but we believe that European regional policy should work with the grain of national regional policy, not against it."
  We knew this five years ago in the European Parliament.
  "It would be counter-productive if our decision to concentrate regional aid in the areas of greatest need were undermined by the spreading of the funds we receive from Europe across the country. Nevertheless, in principle, there are possibilities, for instance in the non-quota section of the European Regional Development Fund, for aid to be given for specified sectors outside the Assisted Areas."
  In addition, my hon. Friend made reference to the fact that there are special arrangements for the social fund and EIB money.
  The European Coal and Steel Community's role was to help Belgium and France with the running down primarily of coal and then steel. There has been a tremendous impact on the British steel industry. This involves Commissioner Davignon. The industrial pressures on the city of Sheffield, with 12·5 per cent. unemployment when the national average is 12·4 per cent. and perhaps a bleak winter ahead, demand a greater expenditure from the regional and social funds. This involves unemployment payments from EEC funds and retraining. Perhaps in Brussels the Financial Secretary can look into whether that money is coming through quickly enough.
  I have already written to my right hon. Friends the Secretaries of State for Employment and for Industry expressing not so much complaints as concern from people who are dependent on these funds. This will be a serious problem for the Community. With 10·5 million people unemployed in the Community, more than 3·2 million in this country against 16 million in Western Europe, and perhaps 30 million in the OECD countries, there is need to make a close study of future trends.
  If I may digress for a moment, I listened to some hon. Members who had been on a recent IPU trip to Romania. They commented on the scarcity of petrol and the fact that farmers, mainly in State farms, could not afford to run harvesters, distribute grain and run tractors. One of the priorities that must be looked at over the next five years is the need to ensure that there is energy available for European industries and that the momentum of British and European agriculture continues. I hope very much that this will be borne in mind.
  When I was in the European Parliament I found—and those of my hon. Friends who are there now will no doubt support me in this—that the rural background to industry is so strong that perhaps the industrial pressures that Britain experiences are much greater than those in either France or Germany. I have tried to put that point across at the Council of Europe, and I hope that those of my hon. Friends who are MEPs will do the same with their German and French colleagues in the European Parliament.
  The Council of Europe is concerned about the level of unemployment and what action to take. It will relate the problems of the Community and Western Europe to those of the OECD countries. I hope that more thought will be given to the possibility of reducing the working week,
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  encouraging people to acquire skills, increasing opportunities for leisure by extra funding, and encouraging tertiary industries. I hope that the Community budget will reflect those aims.
  I was impressed by press articles relating to the compromise that was reached in May. In The Times of 26 May there is a passage to which I should like to draw the attention of the Financial Secretary. It says:
  "The right way for the Community to deal with this would be to come up with a system of financing which is fair to all the member countries. Its failure to do this has meant that the United Kingdom has been repeatedly cast in the role of complainant, demanding that the Community pay it a refund of a large pal of its budgetary contribution."
  On 1 July I learnt that there had been new ground rules to stop the annual squabble over who controls what in the European budget. That was mentioned in the previous debate. There are plans to diversify the sources of the budget, and that must be welcomed.
  I have read with interest Mr. Jackson's report to the committee on budgets of the European Parliament. I have received this report from Sir Henry Plumb. I hope that my hon. Friends will note some of the recommendations. Recommendation 3 states:
  "Reiterates its view that the central theme of the 1983 budget should be the fight against unemployment, making full use of all the appropriate instruments, in particular by means of a considerable increase in appropriations for the Social Fund and a significant increase in appropriations for the Regional Fund".
  That is what I was saying about Sheffield and other British industrial areas. I hope that my hon. Friends will concentrate on that recommendation. It is vital.
  The report also notes the evolution of proposals for research and development. There should be perhaps a higher level of Community expenditure rather than national expenditure on science and technology. That would make better use of our resources. I am sure that my hon. Friends will realise that that is as important now as it was five or 10 years ago. Perhaps the Financial Secretary would consider whether joint ventures on various projects would reduce overall expenditure and duplication of effort. I stress that point when dealing with research, development and industrial policy. Recommendation 20 of that report regrets
  "the proposed reduction in commitment appropriations for industrial policy".
  Will the Financial Secretary find out what the rapporteur meant by that?
  I return to two points that are close to my heart. The hon. Member for Newham, South spoke about levies on oil imported by the EEC. It was a point I made 10 years ago and to which I returned just after the Conservative Party was returned to power in 1979. A common energy policy is comparable to the common agricultural policy with implications in its financial sense as well as structure. I hope that Treasury Ministers and Ministers responsible for energy in the Community will look at that because it might balance some of President Reagan's anxiety about the trans-Siberian pipeline which has occupied Western minds for the past two or three weeks.
  I share the view of the House of Lords Select Committee that the full variety of energy sources should be harmonised. I do not know whether Britain can persuade the Community to use more of our North Sea oil and gas. I regret that the Labour Government were so possessive five or 10 years ago. My hon. Friend the Member for Cheadle knows how much our previous insularity is a cause for regret and the opposition that that

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  brought from German MEPs because this country would not work towards a proper commercial and trading relationship with gas and oil. I hope that the Community will work towards a European pipeline so that we might better share our resources. I hope that my hon. Friends on the Front Bench will press for that. I believe that that would be a proper expenditure of Community money, and that if the budget were increased to meet that type of problem—and included private finance—the Community could better work together to achieve its common interests. I should like my hon. Friends who are MEPs to know that I and my hon. Friends value their work in resolving European problems within the Community.
  12.37 pm
  Sir Brandon Rhys-Williams: When we hear speeches such as those of the right hon. Member for Stepney and Poplar (Mr. Shore), the hon. Member for Newham, South (Mr. Spearing) and other Labour Members on European matters, we must ask ourselves why they are persistently hostile to everything that flows from our membership of the European Community.
  The Treaty of Rome is a free enterprise manifesto. It is Western Europe's answer to the Communist world. Many Labour Members find it an uneasy treaty. They might prefer us to leave the treaty and might feel more at home in Comecon. But in the Western European democracies on the Continent many people of committed Communist persuasion and Socialists and Social Democrats see the overwhelming advantages of adherence to the Treaty of Rome. I hope that in due course the Labour Party will also come to terms with it. Almost all thoughtful people are convinced that if we withdrew from the treaty it would be disastrous for the country.
  In discussing the European budget, I should like to bring into perspective the figures in comparison with the British budget. In 1983 Great Britain is likely to be required to contribute £2,700 million gross to the European budget, but we must compare that with a tax base in the country of about £180,000 million. Our gross contribution equals about 1½ per cent. of the British tax base. I emphasise "gross", because a large proportion of the contribution comes back to us. In the coming year it seems likely that as a result of the special arrangements that our Community partners are agreeable to, the net British contribution will come down to about one-quarter of 1 per cent. of the British tax base. We do not want to pretend that that is not still a large figure, but it is important that the House should keep all the figures in perspective.
  If only hon. Members who devote so much ingenuity and intelligence to pursuing the details of the European Community budget would put the same amount of energy into pursuing the details of the British budget, which contains so many opportunities for saving public expenditure, they would do their constituents much more good. But they continue to hunt the European budget for tiny items where there has apparently been mismanagement or waste.
  As I said, we must not underestimate the importance of the figure if Britain is to make a net contribution to the European budget in 1983. However, what we should ask is not how large but how effective the contribution is. If Britain's money is put to effective use for the sake of the
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  Community as a whole, I do not believe that the British taxpayer would grudge it. But where my right hon. Friend the Prime Minister and the other Ministers who have taken up the cudgels are so right is that we cannot be satisfied that our net contribution is being put to effective use.
  That leads one immediately to a discussion of the CAP, which has been discussed by a number of hon. Members. It is an important preoccupation of the House. If we are to understand the attitude of our Community partners, we must appreciate that the CAP is not primarily an economic policy. It produces results contrary to strict agricultural economy, in particular the embarrassing surpluses, especially in dairy products. It is not defended by its enthusiasts mainly on the ground that it is a food supply policy to ensure that at any rate the population of Western Europe as the years go by will not be short of temperate-climate foodstuffs. But with the world population expanding at the rate of about 200,000 a day, it seems prudent in the long run to install a policy in the Western European democracies that is likely to continue to ensure that there are ample supplies of the temperate foodstuffs for our populations.
  The CAP is primarily a social policy that has been installed because of the drift off the land, particularly since the end of the war. Still today it is causing serious social problems in France, Italy, Germany and elswhere. We in Britain ruined our agriculture by free trade in the latter half of the nineteenth century. We caused appalling suffering on British farms. Large numbers of people were driven off the land. They mostly went abroad to America, Canada, New Zealand, Australia and so on.
  One hundred or more years later the painful readjustments that had to be made on the land have been forgotten, but on the Continent they have been happening in the past 20 years, although, happily, not on the same scale. People have not been going from France, Italy and Germany to other continents; they have drifted off the land into the towns. One has only to see the enormous social effort that has been put into building blocks of flats to house people who have come into the towns off the land to realise the strain that has been put on national finances by the dramatic change in the past 20 years in the structure of European agriculture.
  The future of agricultural prices and the population on the land matter to our partners in Europe in a way that members from this country can hardly understand because the agricultural element in our electorate tends to be very small and the adjustment still taking place on the Continent took place in this country long ago.
  One may therefore sympathise with the concern of our partners about the agricultural population. Some of them may occasionally be too keen in seeking advantage for their own electors to be entirely sincere—that is a feature of any democratic society—but I assure the House that for the most part their determination to defend the CAP is based on their insights into the situation of their own electors and they are not prepared to budge on this because they are convinced that support for agriculture on the scale provided by the Community must continue for reasons of humanity and social policy.
  Nevertheless, if we are to spend that amount of money on support for Community agriculture in transition, we must ask whether it is being spent effectively. I believe that it is not. The annual distribution of subsidies, which is all that is possible within the structure of the Community budget, does not tackle the fundamental problem, which

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  is the capital shortage on the poorer land with the marginal farms that are shedding population and causing the problems.
  The result is that because people do not have the resources to adapt the way in which they farm, they are forced to depend on the type of crop that gives the quickest return without the use of huge amounts of family capital. In other words, they go in for dairy products, which provide two crops per day, and they do not turn their land over to forestry, to take the other extreme, which provides only one crop in a lifetime and perhaps not even that.
  As a result, the Community economy produces embarrassing surpluses of dairy produce that we do not know how to prevent, while importing huge quantities of timber. Although at present this is outside the scope of the CAP, I suggest to the Government that it is one way in which we could successfully contribute to reform of the CAP and also recycle much of the money that we contribute to the budget and hope to get back from it to areas of Britain in need of support. Therefore, I hope that the CAP can be extended to forestry and that far more will be done to remedy the capital shortage on the land in the poorer areas of the Community, including those in this country.
  On the structure of the budget, we must ask how effective it is as an instrument of the collective will of the member States. In my opinion, there are two glaring deficiencies which reflect shortcomings in the Community itself. On current account, it is extremely tentative as well as being very small—less than 1 per cent. of the gross product of the Community. Worse than that, however, on capital account, the budget is barely in evidence at all. If it is impossible to make long-term plans, much of the money is bound to be wasted because it is long-term changes that are really needed in the structure of the European economy.
  Looking ahead to what can be discerned about the world economy in the late 1980s and 1990s, I must say in all seriousness that Western Europe is wrongly structured to face the competition from Asia, Latin America and elsewhere. We are not doing enough about this while we still can so that Western Europe may remain one of the richest areas of the world, depending on world trade in exporting manufactures, profits from services, and so on.
  Many people now express confidence that the next few months and years will bring a recovery of the economies of the Western countries with a new surge of investment in modern industries and so forth. There is a likelihood of that recovery', but will it be on the scale that is needed and will it achieve the changes that are required if Western Europe is to remain in front in the world's economic stakes?
  We are still following our own national economic policies, and our own prestige industries are being supported by national subsidies. We see subsidy policies for the public sector—and also the private sector industries—which should be reorganised, but which are not being reorganised on a Community basis, not just in this country but in virtually all member States. We see ourselves holding on to our frontiers. We still have customs delays and the form-filling which obstructs trade and prevents people taking advantage of the treaty that we have signed.
  What about the successes and failures of our attempts to adopt a Community posture on general economic management? Interest rates are still completely out of
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  kilter. There is no serious convergence on tax policy. Each member State has its own budgetary policy. Finance Ministers and central bankers all produce their own post-Keynesian brainwaves without any coherent policy between them. Tariffs are reintroduced and other obstacles to trade are discussed in an effort to protect the status quo. That is not the way to ensure that the economy that we pass on to our children will maintain the standard of living to which we are trying to accustom them.
  I come back to the budget. How will this little budget tackle the enormous problem? Is it large enough to be useful at all? I am rather doubtful about the "1 per cent. Europe". If we are to make a success of the Community and overcome the evident problems, "1 per cent. Europe" is unlikely to make rapid progress. I should not mind using the slogan "5 per cent. Europe". I do not mind being quoted on that, provided the quotation includes what I shall say next. Five per cent. Europe yes, but only when we have cleared away the nationalistic obstacles to the completion of the liberation of the internal market, and the creation of a united Community market for capital. On current and capital account, we have much further to go before we can begin to realise what was in the minds of the founding fathers when they drew up the treaty all those years ago. This budget, in my opinion, cannot give the lead to the restructuring of European industry, either by direct intervention or by the promotion of conditions in which free enterprise will make the most of the opportunities of the free, united, internal West European market.
  There is almost no reference anywhere in the Commission documents to the European currency system, the European monetary system, call it what we will. We must ensure that the European monetary system becomes a success and that it is changed in the ways that are necessary so that this country can join it. It is likely that some expense will fall on the budget if we tackle the reform of the European monetary system, as is urgently required. At the moment, it cannot cope with capital flows—certainly not on the scale of the London market—and it does not pro vide for orderly adjustment of parities.
  We read all too often of weekend conferences, with banner headlines heralding imminent changes. All too often those banner headlines in the newspapers are proved right. It is disturbing for trade when it cannot rely on the so-called fixed parities that are established in the European monetary system. Although I want Britain to join, I do not want us to join while the system is operating as unsatisfactorily as it is now. As London is the principal financial centre in the Community, we have a duty to propose ways and recommendations to our colleagues in the Community for organising the paper currencies so as to give the maximum confidence to trade and investment. We must admit that the post-Smithsonian experiment with national paper currencies has failed, and I personally hope that something will emerge to supersede the present chaos, in which Community member States—indeed, virtually all the member States of the International Monetary Fund—are trying to run their own paper currency systems.
  I do not want to go back to the gold standard, but to go forward to a benign measure of value and store of value, perhaps the energy standard or something of that sort. It will be some time before we get to that and in the meantime we must put some sort of shape on the currency chaos.

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  The budget is expressed in an artificial unit, which cannot be spent or stored, because it has to recognise the artificial character of the currency system. How can we make a success of our membership while this little budget is expressed in artificial terms and is so ineffectual in achieving what is urgently necessary?
  I should like to see the Community as a single purchasing power area, with, if necessary, national currencies that are maintained at true purchasing parity, so that traders can rely on price levels, profit margins and business trends in every part of the Community running in parallel, instead of being afflicted by currency changes that, in spite of the aspirations of the European monetary system, are not uniting the Community, but Balkanising it. No one can have faith in the reality of the paper currency structure that we have set up and with which we are trying to live.
  Even more important than using the budget to stabilise the paper currencies is the need to look ahead to the creation of a genuine Community market for capital. The achievement of the European Investment Bank is truly remarkable but the Commission papers before us contain only a trace element of the gradual emergence of a capital budget for the Community.
  In other words, the Community is still living in the Stone Age. All that we can do is to look ahead to the next crop and decide from one year to the next whether to plant it or eat it. I am sure that our forefathers used to worry over that problem. We are still worrying about it in relation to the Community budget. We cannot look ahead.
  The wonders of the European economy in the nineteenth century were achieved on the basis of ultra-long term plans. Disraeli borrowed the money to build the Suez canal on a 99-year loan. Where in the world could one borrow money today on that basis? Capitalism is dying out because people cannot see far enough into the future. We have joined a Community and signed a treaty that will enable us to put that right, but all that we are doing is quarrelling among ourselves.
  There may not be a change in the 1 per cent. ceiling on current account expenditure in the foreseeable future. I am prepared to be reconciled to that, partly because of the fact of German opposition, but also because of the opposition of the British Government, which is not misplaced. We are not sufficiently confident in the way that money is spent to be sure that if we went for 1½ or 2 per cent. Europe the money would be spent effectively.
  While we are thinking about the expansion of the current account in due course, let us instal a capital account that could enable the Community to get on with the jobs that must be done in the public and private sectors. Let us give all the encouragement that we can to the European Investment Bank, but let us also find ways of including in the budget systems that would allow the bank to enlarge its operations.
  I do not want to detain the House by going into that matter in more detail, but I hope that there will be occasions when we can consider ways in which the European Investment Bank could help to tackle the unemployment problem in Western Europe by expanding the scope of its activities.
  We all have a duty to press for the ending of the barriers against the movement of capital within the Community, which is damaging London, because we would gain so
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  much if we were members of a truly united European market for capital, and holds us all back and keeps us atrophied in a Stone Age budget that is able to look only a few months ahead.
  The solutions to the economic and social problems of western Europe are in our own hands. We must stop quarrelling among ourselves. We must learn from history. If we refuse to profit from the failures of western Europe in the 1930s, we shall be condemned to repeat those mistakes, and, ultimately, even to suffer the same sort of destiny experienced by Europe at the end of that disastrous decade. We cannot allow the Treaty of Rome to founder. Niggling complaints about the characteristics of the budget are not the right spirit in which Britain should approach its membership of the Community.
  1 pm
  Mr. Ian Lloyd: As always, my hon. Friend the Member for Kensington (Sir B. Rhys Williams) has made an interesting and perceptive speech. I am tempted to follow him down a number of roads. However, he has covered them so well that there is little need for me to do so. I agree profoundly with his analysis of the manner in which the attempt is made to re-erect and to re-create the barriers and the protective devices within our complex human system that we have tried to bring down, by one form of institution or another, and so prejudice much that is important in trade and economic affairs.
  There has been reference in this debate to the domination of agriculture in the budget. There is no doubt that agriculture still retains, through everything associated with the common agricultural policy, an extraordinarily dominating position in European affairs. Looking at community expenditure by sectors, one compares the 13,000 million units of account under the EACGF guarantee and the mere 596 million units of account, amounting to only 4 per cent. of the total or £300 million, spent on the sector that I wish to discuss.
  The budget concentrates on industries that might survive or continue in a different shape or form. The centre of the budget—the regional policy and the social policy—is concerned at the moment with the consequences of the structural readjustment of those industries or those economic sectors that are struggling to survive. They will become dramatically larger and more significant if the sectors that are yet to arrive covered by energy policy, research and investment, information and innovation, fail to arrive.
  There are some important lessons to be learnt and some questions that I should like to ask. The first arises out of energy research and development. A significant statement on page A/41 says that appropriations for commitment totalling 167 million units of account have been requested and that these are designed to
  "extend the energy budget into a substantial package offering a clear sign of the Commission's determination to seize its new energy options, as called for by Parliament."
  I follow energy matters closely. I have a good idea of what energy options are. I have been unable to discover anywhere in the document any statement of what Europe regards as its new energy options or to what energy options this sum of money will be directed. My eye was caught by the section on page A/43 dealing with demonstration projects. This states:

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  "Current programmes moreover should be extended to cover other areas, like wind energy, exploiting small heads of water and new original alternatives for oil"
  Does the Department of Energy know about and approve this programme? This is a matter that hon. Members should know more about. Appropriations for energy research show a large increase. It is interesting that the large increase is in direct contrast to the reduction in the comparable federal United States budget. It reflects an interesting contrast in philosophy on which the Secretary of State for Energy may wish to comment one day.
  On page A/44 of the document under the heading "Miscellaneous", it is stated that a large sum of 270,000 European units of account—about £135,000—is to be allocated to the Oxford Institute for Energy Studies
  "to open in Oxford in 1983 to promote research and studies into international energy problems."
  It is to be financed by OPEC, the Governments of western Europe with a contribution from the Commission. Its purpose is to
  "promote better understanding between oil-producing and oil-importing countries."
  The House will share the view that a better understanding between such important economic groups is desirable, but I wonder whether the creation of another international institute for energy is necessary. Dozens already exist all over the world. I think of the Ford and Miller institutes in America, and there must be many others in western Europe. What new contribution to thinking and analysis will be made by the new institute? I learn nothing about it from the document. It is the first time that I have heard of it and we should know more about it.
  Under the heading "Research, Science and Development", we are told that to carry out its task the Community must
  "contribute to the solution of major socio-economic problems such as"—
  and this caught my eye—
  "…achievement of increased agricultural capacity."
  That is an astonishing objective of science research and development at this time in the Community. Page A/50 of the same document states:
  "For agriculture, research projects specifically designed to reduce surpluses are planned."
  What is the Community doing? Is it indulging in research to increase agricultural capacity or to reduce surpluses? The House needs to know more about that.
  I endorse the general objectives under that heading because, as the document states:
  "The solution to these problems … relies on a high-level capacity for innovation. No single European country, however, has the human and financial resources to develop basic research and technology on a broad front covering all disciplines and all techniques."
  I endorse that conclusion. The document continues:
  "The absence of collective action at European level would curtail Europe's capacity in certain high-technology sectors."
  I endorse that. I compare it with two other issues that show the importance of an appropriate scale as well as relevance in research and development in the Community.
  In Committee the other day we heard that the Japanese are leading the world in the application of coal-fired electricity generation and that one of the reasons why the United States and western Europe is falling behind is that we are not capable or willing to innovate in the detail and on the scale of the Japanese. That is a mundane and conventional technology that we all understand.
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  Less mundane and more important is that last week there was a conference in London on the fifth generation computer. We were told that the Japanese Government are devoting resources on a prodigious scale to what they believe to be the most important technological innovation this century—the development of a computer that: will handle symbolic inference in the same way as they handle numerical data. If the Japanese get that right, they will lead the world in technology and its application. They will probably lead the United States and certainly western Europe. It is of the utmost importance that R and D resources are devoted to that.
  The next point that caught my attention was 'that biomolecular engineering is to be stepped up in 1983. That is probably the second most important of the new technologies that challenges the developed world. It is of the utmost importance that Western Europe should be a significant leader in that field.
  However, under that heading, we are told that there is to be a
  "rearrangement of the division of know-how and scientific potential between North and South."
  I do not know what that means or implies. I do not know how such a rearrangement could be carried out. We learn very little about it from the document and we should know more.
  I turn next to an item on page A/48 where it is said that
  "The aim of the new programme 'Basic technological research' is to give the European industry a technological base on which to become or remain competitive on the world market in the main sectors of industry".
  That is a vague and generalised statement. What is involved? How will the United Kingdom participate? How is it proposed that the United Kingdom should benefit?
  It concludes that
  "other measures to help in the industrial application of results must be envisaged".
  One immediately asks: What other measures? How are they to be applied in the United Kingdom?
  On page A/49 we again see a discussion on some important new concepts in the field of fundamental energy research. They are referred to, in the modern habit of acronyms, as "Super-Sara", "Lobi" and "PARR". That is the first time that have heard of those. We are told little about them. I should like to know whether the work of the Atomic Energy Authority will be duplicated. Will the judgment on Sizewell be affected? What are the implications of this for the whole energy scene in the United Kingdom? We have no answers.
  It is a significant decision that several projects
  "relating more specifically to fast reactors will have to be drastically reduced, if not abandoned."
  What lies behind the decision to abandon or reduce work on fast breeder reactors, especially in a context of continued French support for that work? Why has that been done and what is the thinking behind the Community's decision?
  I move forward to information and innovation policy on page A/50. Here we are told that there is to be
  "the development of advanced technologies and methodologies based on the new information technologies and the increased harmonization of European techniques and standards."
  As I implied earlier, that is crucial and I heartily support it.
  However, again I wish that we had been told a little more about what is implied by EUROTRA—yet another acronym for the new-generation European machine translation system—and by the extension of

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  "machine translation systems to other scientific and technical fields and to other language pairs".
  That is all very technical but it is of the utmost importance.
  Within the same sector of research and development we come, on the same page, to industrial and internal market policy. Here I noted a statement that I believe to be of great significance, especially in the light of what my hon. Friend the Member for Kensington said earlier. It says that:
  "To ensure the success of these measures the Commission must maintain and develop the internal market so that it can become a genuine European preference area for our industries."
  Does that mean that we in the United Kingdom have now, through the Commission and Parliament, committed ourselves to all that is involved in the European preference area? If that is so, it is the first time—I may be in some ignorance of these matters—that I have heard about it. There are considerable implications for our economy and I should like to know a little more about the Government's reaction.
  On page A/53 of the document we are told that the total Community expenditure on industrial development—which includes several regional and social components—is about 1,000 million units of account. Is that figure to be applied to the whole of Europe? I endorse what my hon. Friend the Member for Kensington has said. On a proper scale, it is about 10 per cent. of what the Federal Government of the United States of America are now spending on research and development of defence alone. Compared with what the Japanese spend the contribution to this immensely significant subject is minuscule.
  I looked for a general analysis from the Government on the European budget's significance. I looked at the three documents that were circulated. There was an interesting letter that told us very little. It commented on steel production monitoring, staff numbers, Community actions in the area of integrated operations and the social fund, but drew few conclusions. It even stated that the Commission had proposed the correction of various typographical errors. That is the absolute nadir of significance.
  On analysis, the document from the Treasury is nothing but a catalogue of what is already in the budget. There is no analysis, there are no conclusions and it tells us nothing. There is an even more bulky document from the Treasury, which is a comment on the European Council. It is described as the preliminary draft supplementary and amending budget. Again, it is virtually an abstract without comment. It is in no sense an analysis and it does not help the House to decide whether several thousand million units of account in general, and 500 million units of account on research and development are being spent in a way that is of national or European significance.
  A Committee in the other place argued that we needed to look at research and development differently. If ever the case has been made, it was made today by the way in which the document reached the House and by the way in which significant expenditure on science has been accepted virtually without comment. One important factor distinguishes us from France, Germany, Japan, the United States of America and Canada. Recently, France brought the Ministries of Trade and Industry under the umbrella of research. In both France and Germany there are Secretaries of State for Research, Industry and Training. Research is the first part of the title and the most
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  significant part of the Ministers' responsibilities is research and development. Apart from the Prime Minister, no one carries such responsibility in Britain.
  I have argued before, and argue again that it would not be right to ask the Prime Minister to attend the House today to comment, but some Minister should be here. However, there is no such person in the Government. Such responsibility is diffused throughout the governmental organisation and goes largely by default. It has been argued that a super tanker cannot change direction quickly and that someone standing in front of one will be run down because it takes the tanker five miles to change course. The largest supertanker is that of policy. In Europe, it is a disarticulated super tanker. It takes a long time to change course. The wheel is locked, the key is strongly guarded and the course is apparently decided by a committee. Even when the wheel is unlocked and someone is responsible for putting the wheel over, it takes about 10 years for the policy tanker to change course. The point that I came here to argue today, with specific reference to the European budget but with general reference to the handling of science, research and development in the United Kingdom, is that it is time that wheel was unlocked and that policy was put hard over. If we do not do so, not only the United Kingdom but Western Europe as a whole will fail signally to meet the challenges which have been described by my hon. Friend the Member for Kensington.
  1.20 pm
  Mr. Tom Normanton: I am particularly grateful to you, Mr. Deputy Speaker, for the fact that I have caught your eye at this stage in the debate, if for no better reason than that I follow contributions from hon. Friends who, in their own particular way, have adduced powerful arguments in support of their beliefs.
  I shall concentrate on a part of the Community budget which, as my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd) has already said, represents a very small proportion of the whole, but is one which I believe to be vital to the future of Europe and to Britain's place in Europe. I am referring, of course, to that part of the budget which is concerned with research and development, with science and with technology. I shall not repeat the points that I would have made had they not been made already by my hon. Friend the Member for Havant and Waterloo and other hon. Members.
  In the 1982 budget, such expenditure represented a mere 1·8 per cent. of the whole. It is not surprising that, when faced with the problem of the common agricultural policy or with the politically extremely important point of the net return to the United Kingdom from that budget, expenditure on research seems relatively insignificant, yet for us in the United Kingdom it is of crucial importance.
  In the 1983 budget, the proposals for research would result in an increase in expenditure and would bring the total expenditure on research to about 2·3 per cent. of the whole. It is in the interests of the United Kingdom that that increase should be made and that our representatives in the negotiations in Brussels, the Financial Secretary in particular, should support the proposals contained in the draft budget.
  I had intended to make a particular contribution on the 1 per cent. issue, but my hon. Friend the Member for Kensington (Sir B. Rhys Williams) spelt out the argument in such crystal clear terms that I need only say that I endorse what he said, and the way in which he said it, 100

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  per cent. It is fundamentally wrong that such a high proportion of the Community budget should be devoted to agriculture and that expenditure on research and technological activities, which could be of far greater economic and social benefit to the Community as a whole, and to the United Kingdom within it, is kept at such a tiny proportion. It is in our interests that expenditure on research and development in the Community budget should be increased in absolute terms and also as a proportion of the total budget.
  It is interesting to see where the extra money that the Commission is proposing to spend in 1983 is intended to go in relation to research and development. The information is contained in the plans and proposals of the Commission which were presented to the Council of Ministers at the beginning of June, and which the Ministers broadly endorsed at the Council meeting of 30 June.
  The proposals relate to seven sectors of Community activity: first, promoting agricultural competitiveness; secondly, promoting industrial competitiveness; thirdly, improving the management of raw materials; fourthly, the management of energy resources; fifthly, aid to the developing countries; sixthly, improving living and working conditions as that is, in the context of social policy; and, lastly, stimulating the efficacy and cost effectiveness of the Community's research and development potential. It is on that point that I want to make my contribution to the debate.
  The Commission's proposals for the budget show how those goals are reflected in terms of where the Commission wants to spend extra money. As we should all know, for some time the Commission has had substantial programmes of research in areas such as raw materials, energy, environment, health and safety. However, the Community has not done enough to promote industrial effectiveness or research in the member States on help to the developing countries. Both those areas should obtain a supportive response from right hon. and hon. Members on both sides of the House.
  I shall concentrate on items concerned with the improvement of European industrial competitiveness. It is upon that that our existence as a nation depends. There is no soft option to which we can escape. In this country we have always taken great pride in our industrial research, and rightly so, yet despite that investment we have not been able to translate that research into industrial productivity and competitiveness. That is conspicuously so when set alongside the successes in that context of Japan and the United States.
  However, that is not particularly a British phenomenon. I do not think that it should be described as such. Regrettably, it is to be found almost everywhere in Europe to a lesser of greater extent. Even in Germany, where industry's performance has probably been—I think that it would be true to say almost certainly—the best in the Community, it is abundantly clear that the efforts in research are too dispersed and small.
  Where do we in Europe fall behind our major competitors? We are not nearly as good as our competitors in the transfer to industry of basic research that is done in universities. There is a whole area of research into which both the Japanese and the Americans put substantial effort, with Government and industry working in the closest cooperation. We have neglected to do that in Europe. That
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  is why we are paying the price in falling behind, amongst other things, in our lack of competitive capability in world trade.
  That is the area where universities are deemed by industry to be too theoretical and academic and industry is seen by the universities to be too practical and remote. That is an area in which the Community proposes to make a contribution in the budget year 1983. That area cries out for action at Community level because we need high quality work, such as that at the University of Manchester, in which I have a long-standing interest, combined with equally high quality work done in many other highly reputable universities throughout Europe, in close cooperation with industrial firms. We have a long way to go to catch up. It may take us 10 years to do so. If we do not start on the course that is proposed by the Commission, we shall fall further behind.
  I draw to the attention of, and ask the support of my hon. Friend the Minister for, in his discussions in Brussels, the items on budget lines 7730 and 7731. They deal with the esprit programme for which the Commission takes 11·5 million units of account for 1983 to launch a major programme of Community information technology research. My hon. Friend the Member for Havant and Waterloo touched on that aspect of technological development where if we fall further behind it will be a disaster for Western Europe and an enormous bonus to the Japanese penetration of our markets. I know that that must be to the liking of my hon. Friend the Minister for Industry and Information Technology, and I hope that he will give that proposal his fullest support during the Brussels discussions. Information technology is one of today's glamour industries. It is very much in the public eye.
  I turn to something that is more mundane and less glamorous and yet, to mere mortals connected with industry, of greater importance and relevance. I refer to budget line 7378—the proposal for expenditure on basic technological research. The Commission is working on a new programme, and it is asking for money to start such a programme in 1983.
  The aim of that research is to help existing European industry by stepping up precisely that area of basic technological research that lies between the university and industry. Much of that research has a wide application to several sectors of industry. The proposal is to work through contracts to be placed in member States within institutions such as universities and industrial organisations. United Kingdom interests in both those areas would and should be able to secure a high proportion of the contracts available. We have an undoubted expertise that needs to be developed and reinforced in the industrial applications of lasers, computer-aided design, computer-aided manufacture, the technology of fine particles and the depositions of thin films, and the technology of services. That is the point and purpose of the Commission's proposals.
  From those somewhat advanced and sophisticated sectors I turn to the more mundane sectors, one of which is the clothing industry, which I know well. The clothing industry is one of a number Of industries which, under the Commission's proposals, will benefit significantly from the implementation of the programmes referred to and listed in the 1983 budget. Without that approach, European basic industries and many others will succumb to the competition of low-cost producing countries. Developing collaboration with industry in the sectors

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  concerned will help them become more efficient and more aware of modern techniques and methods of manufacture, and our economy will be better able to resist the desperately dangerous persuasive arguments of those who seek protectionist measures. Who can know whether that research will be successful? However, I am certain that a start has to be made in that direction. By the end of next year, I am sure that we shall be able to judge better whether this sector of research and development and its application to industry should be reinforced.
  I add a few words in support of a few other items in the budget. There is article 720, for preparatory actions of particular interest to small and medium size enterprises. We in this country have expended a considerable amount of energy and national resources in this direction. But many of the problems facing the medium and small companies in Britain are reflected across Europe, and therefore there is every good reason for drawing on that experience and the problems and difficulties. This is one of the purposes of that budget line.
  Budget line 7377 for new work in the most important new industrial sectors of development—biotechnology—is surely an area in which Britain has a contribution to make. But Britain also has a considerable amount to learn.
  Then there is line 7379, for a new programme for those aspects of steel research, including the translation of research into practical applications, which so far have been covered within the steel research programmes under the coal and steel treaty but have proved inadequate. Here is an area in which we can as a Community make a positive contribution to this troubled industry.
  All these represent areas of new departure for the Commission and the Community, and I believe that they should be encouraged wholeheartedly.
  I refer briefly to the joint research centres of the Community, of which there are four. One of them, since it was formed nearly 30 years ago, has gone through somewhat traumatic political and research experiences. Not long ago, it was regarded as the great scientific white elephant of Europe. In the past three or four years enormous efforts have been made to bring this Community institution up to date and enable it to meet the challenges which it has to face in order to survive. In terms of technology, Europe must also accept that it will survive.
  As a member of the energy and research committee of the Parliament, I have been associated with this move for more than nine years. I can say that without question the centre is now one of the finest research organisations in Europe in certain specialist fields. Undoubtedly it is expensive, because it has to embrace 10 member States, to deal in seven different languages and to suffer the imposition of the difficulties of finding agreement on its programmes at Community level. But in those areas on which agreement has been found—and my hon. Friend the member for Havant and Waterloo referred to the Super-Sara—there is no doubt in my mind and in the minds of other hon. Members who are serving and have served in the European Parliament that a major step has been taken by the joint research centre with the sole purpose of making it better able to contribute to the advancement of technology. That area deserves our support.
  I repeat that I do not argue for a major expansion of the Community budget. We must ensure that it is more
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  effectively balanced and cost-effectively implemented. The research and development and the science and technology elements are a minuscule part of the whole. What is being done is good and should be expanded. I commend to the House support for what is happening in that sector and the related items in the 1983 budget.
  1.40 pm
  Mr. Jack Straw: This has been a useful debate on an important subject, but the difficulty that hon. Members have had in attending the debate proves that it was unfortunate that the Government chose to organise it on a Friday late in July.
  My hon. Friend the Member for Newham, South (Mr. Spearing) mentioned the total absence of the two most unanimously pro-market parties—the SDP and the Liberals. In a debate on the central issue of our membership of the Community their absence is extraordinary.
  The hon. Member for Belper (Mrs. Faith) mentioned potential job losses if the country elected a Labour Government, as I am sure that it will, and we withdrew from the EEC. She followed the path of Sir Roy Denman and others last year, plucking out of the air ludicrous and totally unsubstantiated claims about the likely consequences of withdrawal. Last July Sir Roy Denman claimed that unemployment would rise to at least 5 million or 6 million. The CBI claimed that businesses and jobs would be put in jeopardy. The Government have started to consider more carefully the possible consequences, as I pointed out to the hon. Lady.
  No one in the Government is more passionately in favour of membership than the Minister of State, Foreign Office, but the most that even he would claim is that thousands of jobs may be put at risk, and not that millions would be lost or hundreds of thousands put at risk. If that is the most that he can claim, we can rest assured that the reality is that no jobs would be at risk.
  If the Government wish to challenge that claim they must produce a basis for calculation. I have repeatedly asked the Government and the CBI to produce a systematic study of the effects of withdrawal. As long as they remain silent we must assume that there is no basis for those calculations.
  It has been said that the European budget is minuscule. Those who claim that 25 billion ECUs or £15 billion or £16 billion is minuscule should have produced the same argument a week ago when we were discussing the genuinely minuscule amount in terms of our national Budget of £60 million that should have been given back to the unemployed. On any basis, the EEC budget is substantial, as is our contribution. If the Government wish to put that contribution into commission for the Opposition to discuss how it could be allocated for the benefit of our constituents, we shall be happy to do that.
  Earlier this month, the Treasury and Civil Service Select Committee produced a valuable report on budgetary reform recommending major procedural changes in the means by which the House considers the Government's revenue-raising and public expenditure proposals, to ensure that they are more fully debated before final decisions are reached and firm positions taken up. The report proposed a much greater and genuine integration between revenue and spending decisions. The House will no doubt have the opportunity to debate that report later this year, but it is widely recognised that the present

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  procedures for parliamentary and Cabinet scrutiny of the United Kingdom domestic Budget and the PESC White Paper are inadequate and require urgent reform.
  The procedures for scrutiny of our domestic Budget, however, could be described as perfection itself when compared with those operating in relation to Common Market expenditure. The document before us is described as a "Preliminary Draft Budget", but to call it a budget at all is to do violence to the English language. It is in fact a preliminary draft bill in the sense of an invoice or account rendered and shortly falling due for expenditure decisions made elsewhere within the labyrinthine machinery of the EEC.
  The Treasury's own explanatory memorandum is remarkably candid on this point when it says that
  "the Community budget reflects the financial consequences of Community policies agreed or to be agreed, and discussion of the PDB in the Council of Ministers is not usually the occasion for detailed discussion of, or decisions on, new policies."
  In other words, we are presented today with a bill for decisions made elsewhere and above all for decisions made in the Council of Agriculture Ministers with the Finance Ministers merely being there to pick up the tab.
  While this debate gives the British Parliament no effective opportunity to control the Common Market budget—that was lost in 1972 when the Conservative Party surrendered the sovereignty of Parliament over that expenditure—it gives us the chance to assess the progress made by the Government to meet their own objectives in relation to both the size and the structure of the overall EEC budget and the extent of our contribution.
  It has been made clear already today that, on any assessment, the Government's conduct of negotiations on the EEC budget has been a failure. There has been one false storm after another, one outburst after another of empty sabre-rattling rhetoric from the Prime Minister about standing firm, followed by one capitulation after another, culminating in the abject humiliation of this country on 25 May. On that occasion, not only was the national interest veto overridden but this country actually acquiesced to that in the destruction of the Luxembourg compromise, thus accepting the destruction and abnegation of the central condition upon which we entered the EEC in 1973—a condition that both pro-Marketeers recognised as central to our entry.
  The charge of failure is a serious one, but it has clear substance when the actions of the Government are set against, not the targets and intentions of the Opposition, but the goals that the Government themselves have set. In the first debate in the House on the European budget on 16 July 1979, the Government actually accepted an amendment moved by my right hon. Friend the Member for Llanelli (Mr. Davies). The House resolved that:
  "This House urges Her Majesty's Government, in view of the United Kingdom's massive and ever increasing net contribution to the Community Budget, to press for a fundamental reform of the budgetary arrangements so that Britain's contribution to the Budget is at least not greater than the receipts".— [Official Report, 16 July 1979; Vol. 970, c. 1096.]
  That was the mandate given by the House to the British Government three years ago, a mandate that they have lamentably failed to achieve.
  It was not only the House that set a target; it was also the Prime Minister. We all remember her Winston Churchill memorial lecture, given on 18 October 1979, when she said:
  "We seek a remedy which will restore a broad balance, and which will last as long as, but no longer than, the problem".
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  She also said:
  "I cannot play Sister Bountiful to the Community while my own electorate are being asked to forgo improvements in the fields of health, education, welfare and the rest. The imbalance is not compatible with the spirit of the Community".
  We can say that again. We can also say again that it is indefensible for the electorate to forgo improvements in health, education, welfare and the rest, while the British taxpayer has to finance the extravagance of the continental agricultural policy.
  The Dublin summit followed that lecture, and as we all know, that was a failure. In 1980, there was the agreement of 30 May of the Commission mandate. That led to a reduction in the contribution that would otherwise have been made. However, it is important to note that it was a reduction in the contribution that would otherwise have been imposed on us, following the terms agreed, not in 1975 by my right hon. Friend the Member for Huyton (Sir H. Wilson), but in 1971 by the then Conservative Government—terms which the present Chancellor of the Exchequer played such a prominent part in obtaining.
  When the Government seek to congratulate themselves on the partial and very temporary solution to the budget problem that they achieved in 1980, they forget that they were the authors of the problem in the first place. The Labour Opposition in the early 1970s, and in particular my right hon. Friend the Member for Stepney and Popular (Mr. Shore), spelt out exactly what the size of the burden would be 10 years later.
  In any event, despite the rebates, the contributions that the country has had to make over the past two years have been large by any standards. In 1980, we had to shell out £706 million, and last year, as the assiduous questioning of the hon. Member for Northampton, North (Mr. Marlow)—to his great credit—winkled out of the Government, the contribution was £397 million, not the £6 million which the Minister of State tried to claim. The Foreign Office practised the subterfuge of recording only contributions to the allocated budget, whereas if we take the gross payments to the Community budget, the allocated and the non-allocated budget, we discover that our net contribution last year was only £3 million short of £400 million. This year, assuming that the EEC estimates of our net deficit are correct, we shall pay £390 million. It is no wonder, therefore, that The Standard, which is a loyal supporter of the Government, headlined the decisions of 25 May as
  "Maggie's big climbdown on EEC bill".
  How different is the reality of what this Government have achieved from their rhetoric.
  Even worse is the fact that there is no firm deal for next year. There is only an agreement to seek a deal in November of this year. Moreover, the agreement for next year can take into account the actual size of the contribution, not only this year but over the previous two years. There are already strong signs that the fact that there was some shortfall in our net contributions in 1981 and 1982 will be taken into account by the Commission and the Council of Ministers in the decisions for 1983 The gobbledegook used to report the outcome of the informal meeting of Foreign Ministers on 25 May included:
  "Corrections to be made for 1980 and 1981 in the light of the actual figures will be taken into account when negotiating the subsequent solution."
  That is the solution for 1982–83.
  I ask the Financial Secretary to spell out how the rebate will work if, as is possible, the unadjusted net contribution

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  does not come out at the Commission's assumed level of £880 million or 1,530 million ECUs. I understand that a sliding scale will operate if our unadjusted net contribution is greater than that and that the same scale, of 50 per cent. on the first slice and 75 per cent. on the subsequent slice, will operate in reverse if our net unadjusted contribution is less than 1,530 million ECUs. We could end up with a substantially lower rebate than appears to be likely.
  The Government's failure to secure a lasting solution on the question of our contribution to the EEC budget is the result of two much more fundamental failures. The first is the failure to secure reform of the EEC budget as a whole, following the collapse of the 30 May mandate.
  When that agreement was reached Ministers used extraordinary and extravagant language to announce it as heralding a new beginning. The then Lord Privy Seal, the right hon. Member for Chesham and Amersham (Sir I. Gilmour) said:
  "In the long term, the most important part of the package is the commitment of the Council to review the development of Community policies and the operation of the budget … we have an unrivalled opportunity to bring about sensible adjustments to the operation of the CAP and to put the Community's finances on a sounder basis than ever before."—[Official Report, 2 June 1980; Vol. 985, c. 1045.]
  The Chancellor of the Exchequer was even more extravagant in a debate on the EEC budget. He said:
  "it is the view of the Government that that arrangement will turn out to have been one of the most significant and fruitful developments since we became members of the Community in 1973."—[Official Report, 2 July 1980; Vol. 987, c. 1543.]
  I wonder whether the Chancellor or the former Lord Privy Seal would repeat those claims today.
  As many of my right hon. and hon. Friends and I pointed out at the time, the mandate never made the promise that Ministers claimed had been made. It was fatally flawed from the start and the small print made it clear that it would never be possible to secure a fundamental reform of the budget or the CAP. The mandate said that the examination should proceed.
  "without calling into question the common financial responsibity for these policies … or the basic principles of the common agricultural policy."
  Unless the House can call those matters into question it will never be possible to secure fundamental reforms in the disgraceful and wasteful way in which the CAP and the EEC operate.
  Despite the report of Gaston Thorn in June 1981, there have been no serious or significant changes in the balance of the budget and there is no prospect of that. The Financial Secretary referred to some changes that had been made in the amount allocated to the regional and social fund. As far as they go—and as long as we are locked into this ludicrous system—they are welcome. However, not too much weight should be placed on that. Even the European Assembly has criticised the balance saying that the draft budget does not constitute a budget of progress. In the "Euro-speak" now being developed, it
  "regrets that the Commission's proposals for an increase in appropriations for the Social Fund do not differ in a truly significant way from proposals for increases in this sector in previous years' Preliminary Draft Budgets."
  and
  "reiterates its view that the central theme of the 1983 budget should be the fight against unemployment."
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  Of course, that has not happened. On present estimates, the amount going to agriculture next year will rise from 62 per cent. to 65 per cent. This underlines the fundamental failure of the 30 May mandate.
  Given the total failure of the 30 May mandate and the promise held out by the Government, and particularly by the Chancellor of the Exchequer, for major reforms in the overall EEC budget and also promises on the common agricultural policy that were a central part of the Conservative manifesto, will the Financial Secretary say what proposals the Government now have for securing further change? Are they to wash their hands of any possible reform of the common agricultural policy or of the EEC budget? If they intend to seek reform, as they are pledged to do, how do they intend to secure it?
  The second reason for the Government failing to secure any lasting solution on our budget contribution arises from the breaking of the Luxembourg agreement and the right of countries to exercise a veto where vital national interests, as they define them, are at risk. It is not only a case of the breaking of the Luxembourg agreement but the extraordinary acquiescence in its breaking by her Her Majesty's Government. Before the decision was made on 25 May this year, No. 10 Downing Street was briefing any journalist willing to listen that the Government would stand firm in the face of any attempt by the Nine to try to bounce a farm price review decision through the Council of Ministers without there being agreement on our budget contribution. The Sunday Times had a headline
  "Thatcher set for EEC row".
  The article stated:
  "Mrs. Thatcher is preparing for a new showdown with the Common Market over Britain's payments. She is determined to take the EEC to the brink of collapse once more if it does not settle her demands for a guaranteed extension of the special 'money-back' deal she won two years ago. Conservatives were alerted to the impending storm yesterday by Humphrey Atkins, the deputy foreign secretary".
  We know what happened to him.
  Another headline in January in The Times stated
  "Britain isolated after EEC talks collapse"
  followed by a report which stated
  "Britain prepared to freeze EEC business last night as talks among the foreign ministers of the 10 member countries, aimed at restructuring the community finances, collapsed".
  Two months later, the Prime Minister was still rattling her sabre. Not only were journalists briefed at No. 10. The right hon. Lady also spoke at a press conference after a full day of talks at Chequers on 19 March. One report stated:
  "The British Government will continue to block this year's EEC farm price review until a satisfactory solution is found to the long running dispute over Britain's contribution to the Community budget, Mrs. Thatcher said last night."
  Hon. Members know what happened. The Government went like lambs to the slaughter while the rest of the EEC rode roughshod over them. M. Cheysson was reported in The Standard on 25 May as saying that Britain had been forced to accept a far lower refund because it had no "weapons" left. That was why the French and remaining countries of the Nine tried it on. They tried to over-ride the Luxembourg compromise. Having got away with it, they stripped away and destroyed the one weapon that we possessed and the one weapon that we could have used.
  Not only did France, the constructor of the Luxembourg compromise, seek to force a change in the agreement, but the Foreign and Commonwealth Office was willing to accept that defeat. That is appalling. Many of us suspect that it was willing to accept the defeat because, as

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  federalists, Foreign Office Ministers have never liked the Luxembourg compromise and wish at the most for voting on a qualified majority.
  The gulf between the Treasury and the Foreign Office on European Commission matters is wider than it is on other issues. The Treasury is packed with closet anti-Marketeers. If the Financial Secretary does not know that he should look in the closets.
  I was surprised to hear nothing from the Financial Secretary about the Government's attitude to the Luxembourg compromise. He said nothing about whether we would seek to ensure that it was properly enforced, particularly by warning the EEC that we shall do what de Gaulle did in 1966 and adopt an empty chair policy until we have compliance from the other States.
  I am surprised that there was no reference to whether the British Government will accept an increase in the 1 per cent. VAT ceiling or any other increases in the so-called own resources available to the EEC. That is of fundamental importance to our negotiations and our future position in the EEC. None of us were reassured by the statement by the Minister of State, Foreign and Commonwealth Office on Wednesday. He was questioned repeatedly by the hon. Member for Faversham (Mr. Moate) about whether the Government still stick by what the Prime Minister told the House—that no revenue resources would be made available to the EEC. The Minister would not repeat what the Prime Minister told the House last year. All he said was:
  "At present there are no proposals for an increase in own resources, and we do not believe that at present any such proposals would be justified."—[Official Report, 21 July 1981; Vol. 28, c. 421.]
  He did not say that future proposals would be blocked. I want to hear the Financial Secretary say that they will be blocked.
  The Commission wants to increase the amounts of own resources. In a recent document it stated:
  "The Commission cannot accept that an artificial ceilng be put on own resources, and will propose that they be increased when this becomes necessary to achieve agreed objectives."
  That is the mandate given on 30 May 1980. What is the British Government's approach to an increase in own resources?
  The Daily Telegraph supports the present Government. On 27 May, two days after the fateful humiliation of Britain, an article on the leader page posed the following questions:
  "What is the Community now to become? What is to be Britain's role in it? Does Britain indeed have a role? An uneasy peace prevails but there is little faith it will endure. More so than at any time since its founding, the purpose, procedures and even membership"
  of the EEC are in question.
  "The bitter row over Britain's budget payments has vital significance for our own EEC membership but in the past few days it has also served to strip the Community of much of its belief in the way it operates and conducts itself."
  I could not have put the matter better.
  Let us concede that there was once some vision and hope in the Common Market. Although many Labour Members profoundly disagreed with it, that was why the House decided to go ahead with our entry into the EEC about 10 years ago. However, nobody can now say that there is any hope or vision left within the Common Market. What hope and vision was once there has now been replaced by demoralisation and despair.
  714
  The more that events unfold, the more it becomes clear that the Common Market is an ossified structure, incapable of change. It is a late twentieth century dinosaur. The more that becomes clear the more the British public will appreciate the harm that the EEC is doing to the United Kingdom and the more they will appreciate the Labour Party's approach, first, of an amendment to the European Community Act and secondly, for a disengagement from this extravagant, inefficient and wasteful madness. That is the only sensible basis for our relationship with Continental Europe.
  2.10 pm
  Mr. Ridley: Having listened to the concluding tirade of the hon. Member for Blackburn (Mr. Straw), I must report that there is only one topic on which the House has been unanimous in the debate, and that is our tearfulness at the absence of the right hon. Member for Glasgow, Hillhead (Mr. Jenkins).
  The point that has bothered me all morning was raised by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). He asked what was the reason for the Labour Party's continuing hostility towards and vendetta against the Common Market. He said that it was because it was a free market organisation. I do not know. Perhaps one day Labour Members will take time off from the tedious repetition that we have heard today to give us the answer. We have heard nothing new at all—only ample additional evidence of their hostility.
  We have had a grudging acceptance by the Opposition of that which is good. We have had nothing but condemnation and criticism of the agreement of 30 May 1980, but at least it was a damned sight better than anything that they ever did.
  The Opposition showed a grudging attitude to the mere £490 million, or whatever was agreed on 25 May this year—peanuts. They showed a grudging dismissal of the agreement of 30 June. It was described by the right hon. Member for Stepney and Poplar (Mr. Shore) as if it was of no importance whatever. Everything was dismissed.
  It is like driving a car in rather tricky country when the back-seat drivers—there are plenty of them—want to go home. The Opposition are not helping Britain's interest in Europe. They are being a dead weight upon those who are trying to solve the difficult problems.
  The Labour Party paid lip service to the fact that this was a debate on the 1983 budget and the rectifying 1982 budget. However, after a brief reference, it was off into the good hunting country of the mandate and the CAP and people's dislike of them.
  Every one of my hon. Friends who contributed to the debate made constructive and helpful speeches, designed to assist the Common Market and the Government to solve the problems to which we are assembled here to address ourselves. Indeed, my hon. Friend the Member for Kensington raised a fundamental point, as did my hon. Friend the Member for Sheffield, Hallam (Mr. Osborn).
  We are talking of between 1 per cent. and 2 per cent. of the European Community's gross domestic product and a similar proportion of the domestic product that we put into Europe. It was suggested that it should be at least 5 per cent. and that barriers should go. That may be the way that we shall go in future. However, the figure must be even higher than 5 per cent. if it is to be seen as a means of redressing our budgetary imbalance. Unless we spend an enormous sum on social and regional policy, we cannot

  715
  redress that imbalance. However, if Europe could take over growing areas of national expenditure and do it much better than the individual nations, that might be a way of furthering the cause of Europe, and I would agree with that.
  The debate has highlighted the fact that it is not only we who decide. It takes Ten to agree. That is why progress tends to be slow. This may be a disappointing year for my hon. Friend the Member for Kensington, because there has been an increase of only 7·7 per cent. in the draft budget compared with last year. I take issue with the right hon. Member for Stepney and Poplar on a mathematical point because he said that that was distorted by excluding the refunds for 1983. However, last year's figures contained the refunds for 1982. If one takes the 1982 and 1983 draft budget figures and includes the refunds in both, the increase is less; only 6¾ per cent. to 6½ per cent.
  Mr. Shore: A moment ago the hon. Gentleman complained that our questions were irrelevant to the budget. However, my question was entirely relevant. I did not quite understand the hon. Gentleman's reply. He gave the figure for the budget increase between 1982 and 1983 as 7·7 per cent. I pointed out that there was no entry for the British refund in the 1983 draft budget, and I asked him about that. He cannot say that once the figure is taken into account—at the minimum, it must be £300 million or £400 million—the increase in 1983, once adjusted, can be less than 7£7 per cent. However, that is apparently what the hon. Gentleman is saying.
  Mr. Ridley: The right hon. Gentleman must compare like with like. Excluding refunds, the increase, is 7·7 per cent. Including refunds, the increase is 6¼ per cent. to 6½ per cent. The right hon. Gentleman also complained about unemployment and asked what the budget was doing to assist. No one would pretend that the sums involved will make much of an impact on European unemployment. However, he pointed out that in the past four or five years unemployment in Europe has doubled or trebled and has now reached 10·5 million. I hope that he will bear that in mind when we hold our debates on the economy. It is a clear sign that unemployment is a European problem.
  An argument developed about unemployment in Europe, particularly between my hon. Friend the Member for Belper (Mrs Faith) and Opposition Members. The argument showed that figures can be bandied about. My hon. Friend said that unemployment would increase by 2·5 million if Britain left the Community.
  The hon. Member for Blackburn was keen to quote, partially, my hon. Friend the Minister of State, Foreign and Commonwealth Office about his figures. I wish that he had completed the quotation, but he was merely being careful. It might help to complete it. My hon. Friend said:
  "Even more certainly, quotations from industrialists investing in Wales and Scotland especially make it clear that they have brought those jobs to this country because of our membership of the Community."—[Official Report, 21 July 1982; Vol 28, c. 423.]
  There is not one hon. Member who argues that employment would increase if we left the Community. We have debate after debate on unemployment and then on the European Community. Nevertheless, Opposition Members fail to link the fact that the policy that they
  716
  advocate one day about leaving the Common Market is bound to make the problem of unemployment infinitely worse the next day. The Opposition are inconsistent.
  Mr. Straw rose—
  Mr. Jay rose—
  Mr. Ridley: I shall not give way, because there is little time left and there are many questions to answer.
  My hon. Friend the Member for Scarborough (Sir M. Shaw) made an excellent speech. I thank him for the sensible comments that he made. I should have liked to be able to answer all his points, but in the time available I shall try to deal with what he said about the financial regulation. He told us that he managed to get it introduced when he was the rapporteur. He asked why it had not been reviewed. The answer is that the Commission presented its proposals for the amendment of the financial regulation early in 1981, but the European Parliament has to be consulted about it. The Parliament began its consideration of the proposal in 1981, but it has not yet finished its consideration and given its opinion. As the Parliament has not delivered an opinion to the Council, the Council cannot comment on and implement it. That is a pity, because it clearly should be done.
  The hon. Member for Newham, South (Mr. Spearing) asked me about the other possible resources which would be available if and when the VAT ceiling was reached. The percentage represented in the draft budget by the 1 per cent. VAT ceiling is 0·7945, so there is still 0·2 per cent. to go. In money terms, that is more than £;1 billion, which is a considerable amount of leeway, even at this time.
  I confirm that the Government do not see any need at present to consider alternative forms of revenue for the Commission. Nobody will say that at no time in future will it be necessary to look at the problem again.
  The hon. Gentleman asked me about a fuel import levy. I shall be dealing with that very shortly. Clearly, such a revenue to the Community would be of very great assistance to the United Kingdom in dealing with our net contribution. It would be foolish of me to turn it down flat for ever and a day. My point is that, as there is no need for additional revenue, we do not need to address our minds to it, and we shall certainly not agree to such a levy at this time.
  The hon. Gentleman asked whether the Commission could introduce a levy on imported fuel on its own responsibility. He knows, of course, that the Commission—
  Mr. Spearing: The Council.
  Mr. Ridley: I think that the hon. Gentleman asked about the Commission, but perhaps not; it is not an important distinction. If the Commission proposed such a levy, it could get it accepted only with the unanimous agreement of the Council. I believe that the Luxembourg compromise would hold and that it would not be possible—[Interruption] I do believe that. It is not simply a question of a member State saying that it is in its national interests to object; it actually has to be in its interests to do so. I do not think that anyone could claim that imposing a fuel levy was not in a nation State's national interests.
  This House ultimately has control. If it mandates the Government, by a motion which it has passed, to object to a new levy, whether of that sort or not, the Government are bound to act in that way. They may not win the vote.

  717
  The trouble is that Labour Members do not win votes, and probably never will again, as their numbers dwindle and diminish. That is what they are complaining about. If the House were to press the Government and carry a vote against them, the Government would not ignore the House, which is the source of all their authority.
  The hon. Gentleman also asked about the Court of Auditors report. Several of my hon. Friends asked about the possibility of failing to give it a discharge until it had investigated the European Parliament's affairs and they had been acceptably put right. The convention that has been mentioned by my hon. Friend the Member for Scarborough and others operates in that case. The European Parliament does not look into the Council's expenses and the Council does not look into the Parliament's expenses. It must be a feature of a responsible, though not a sovereign, Parliament that it should be responsible for its own cleanliness in its financial dealings. To have the Council try to look into the Parliament, breathe down its neck and crawl over it, would be as humiliating as if the Government constantly spent their time trying to investigate how the House of Commons Commission spends its money. As parliamentarians we must be responsible for our own housekeeping. The same goes for Europe.
  With regard to the discharge of the auditors' certificate, it is not only the Council, but the Parliament, that has to put its name to it. I think that the hon. Gentleman will agree with this. My hon. Friends the Members for Cheadle (Mr. Normanton) and Kensington, who are Members of the European Parliament, will take back the message from the House that we would like to see the Parliament's financial propriety in its own dealings put beyond any doubt, with more power put in the hands of the Court of Auditors to achieve that.
  My hon. Friend the Member for Sheffield, Hallam and others of my hon. Friends, particularly my hon. Friends the Members for Havant and Waterloo (Mr. Lloyd) and Cheadle, spoke meaningfully and forcefully about the need for more money to be spent on joint ventures in research and development, industrial innovation and the improvement of competitiveness. I gave the figures showing what is in the draft budget. Money for joint ventures on research and development has risen from 2·3 per cent. to 3·1 per cent. of the total budget. Funds for research in this draft budget have risen by more than 50 per cent. compared with last year. Those are valiant efforts by the Commission to meet the points made by my hon. Friends. I have taken a detailed record of the budget lines that my hon. Friends have advocated. That is the sort of
  718
  helpful advice that we like to get out of these debates. When I go to Brussels I shall do what I can to reflect those views and priorities.
  In the detailed assessment of different programmes, be they agricultural or industrial, my right hon. Friends the Secretary of State for Industry and the Minister of Agriculture, Fisheries and Food will decide the British Government's priorities, but I shall make sure that their attention is drawn to what my hon. Friends have said.
  The hon. Member for Blackburn asked me a specific question about the refunds for 1982. There is a risk-sharing agreement. If we go over 1,530 million ECUs as our net contribution, defined by the Commission, there is no additional refund until we reach 1,580 million ECUs. From 1,580 million ECUs to 1,730 million ECUs, the refund is 50 per cent. of the excess. Above 1,730 million it is 75 per cent. of the excess. On the downward risk-sharing path, the arrangements will be broadly similar. They have not yet been fully agreed. They are still under discussion, as are the means by which the refund will be paid by our nine partners, who have not yet come to a final agreement.
  I am grateful to all right hon. and hon. Members who have contributed to the debate—those behind me who have tried to improve the European budget, and those in front of me who have tried not to have a budget at all.
  Question put and agreed to.
  Resolved,
  That this House takes note of the preliminary Draft Supplementary and Amending Budget No. 1 for 1982 and the preliminary Draft General Budget of the European Communities for 1983.

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

    COMPANIES
    That the draft Companies (Accounts and Audit) Regulations 1982, which were laid before this House on 6th July, be approved.— [Mr. Berry.]
    Question agreed to.
    Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.)

    HOUSING
    That the Housing (Payments for Well Maintained Houses) Order 1982, a copy of which was laid before this House on 6th July, be approved.—[Mr. Berry.]
    Question agreed to.

  Raoul Wallenberg
  Motion made, Question proposed, That this House do now adjourn.— [Mr. Berry.]
  2.30 pm
  Lord James Douglas-Hamilton: If he is alive today, Raoul Wallenberg will be celebrating, if that is the right word, his seventieth birthday in 12 days' time. That makes him approximately the same age as the Leader of the Opposition and, as we know, that is an age which does not preclude all types of activity.
  Without making odious comparisons, it can be said of Raoul Wallenberg that humanity owes him an enormous debt, and that can be said of hardly any other living person this century—if, indeed, he is alive.
  In 1944 and 1945, whilst acting as a Swedish diplomat in Hungary, he repeatedly confronted the SS commanders taking persons of Jewish origin away to be murdered, and he claimed that they were Swedish citizens. As a result, when Soviet forces took Budapest, about 120,000 persons of Jewish origin were alive, this being far and away the largest Jewish community remaining in East Europe at the end of the Second World War. I doubt whether it can be said about any other man this century that he played a key role in saving the lives of somewhere in the region of 100,000 people.
  The facts are plain and unmistakable. Raoul Wallenberg showed qualities of enormous courage and relentless persistence. He is, with justice, regarded as one of the great heroes of the twentieth century. A recognition of this fact is that only two men this century have received honorary American citizenship. One was Sir Winston Churchill, for the role that he played in destroying the Third Reich. The other, on 6 October 1981, was Raoul Wallenberg, for his part in saving the lives of some 100,000 people.
  It was on 17 January 1945 that Raoul Wallenberg was taken into custody by the Soviet authorities in Budapest who, ever since, have refused to release him.
  I raise the question of his fate today for a number of reasons. First, to this day the Swedish Government do not regard Raoul Wallenberg as being dead. The ambassador in London, Mr. Per Lind, has confirmed that the Swedish Government would welcome support in connection with Swedish intervention in an international forum.
  On 15 April 1981 the then Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Blackpool, South (Mr. Blaker), answered questions from my hon. Friend the Member for Ilford, North (Mr. Bendall), my hon. Friend the Member for Essex, South-East (Sir B. Braine) and the hon. and learned Member for Leicester, West (Mr. Janner) with these words:
  "we shall do everything that we can to back up the Swedish authorities by supporting their representations. Also, we have told the Swedish authorities that we shall put them in touch with British subjects who may be able to help by giving evidence in support of the search"—[Official Report, 15 April 1981; Vol. 3, c. 310.]
  Secondly, I have received a letter from Raoul Wallenberg's sister, Mrs. Nina Lagergren, written on behalf of the Raoul Wallenberg Association, welcoming the inititative to raise inquiries about her brother in the House of Commons with deep gratitude. In this connection it is relevant that one of Raoul Wallenberg's cousins, Annis Bonsor is a British citizen, and my hon. Friend the Member for Nantwich (Sir N. Bonsor) will be able to
  720
  represent her views. As it is, quite a number of those whose lives were saved by Raoul Wallenberg came to Britain after the Second World War, and many of them went on to settle in North America and in Commonwealth countries.
  Thirdly, the Church of Scotland, of which I am a member, greatly admires and respects the work carried out by Raoul Wallenberg. On a much more limited scale, Miss Jean Haining also tried to save people from being murdered in Hungary during the war. She was sent to Auschwitz, where she was murdered, and this year the Moderator of the Church of Scotland, the Very Reverend Dr. Andrew Doig, took part in the service unveiling a memorial to her in Budapest.
  It is relevant that, when Raoul Wallenberg went to Budapest, his mission was known to the British Government who even supplied him with names of British citizens and contacts so that he could protect them.
  I turn to Raoul Wallenberg's fate. On 16 January 1945 the Soviet Deputy Foreign Minister informed the Swedish ambassador in Moscow that the Russian military authorities had taken measures—as he described it—to protect Raoul Wallenberg and his belongings. On 8 March 1945 the Russian-controlled Kossuth radio broadcast that Wallenberg had been murdered. On 18 August 1947, the Deputy Foreign Minister, Andrei Vyshinski, said that Raoul Wallenberg was not in the Soviet Union and was unknown to the authorities. Vyshinski suggested that he had probably died in Budapest in 1945. That was untrue, as Soviet authorities later admitted.
  Wallenberg was seen by a large number of witnesses, and in 1957 the Soviet Deputy Foreign Minister Andrei Gromyko wrote that a search of prison archives had revealed a hand-written report dated 17 July 1947 from the medical head of Lubyanka prison to the Minister for security services, Abakumov. The note said:
  "I report that the prisoner Wallenberg who is known to you, died suddenly in his cell last night."
  Gromyko said that later Abakumov was sentenced to death and shot.
  Gromyko's reply to the Swedish Foreign Minister contradicted Vyshinski's earlier reply. Gromyko made it all too clear that Wallenberg was well known to the Soviet authorities, and alleged that he had been killed in 1947. since then Raoul Wallenberg has been seen by many witnesses. I have 90 pages of evidence prepared in Sweden which reveals that witnesses had seen him in Russia. Many returning prisoners of war confirmed that they had seen him. During the 1950s many more witnesses spoke of seeing Wallenberg in prison, and said that he had been interned because the Russians regarded him as a spy.
  So much evidence was accumulated that in 1960 two Swedish supreme court judges assessed it and came to the same conclusion about the sightings. They said:
  "The statements contain a large amount of information, the correctness of which it has been possible to check and they support each other. In our opinion, according to Swedish law, the present Report must be considered to make it probable—though it does not contain full evidence in this respect—that Wallenberg was alive at least in the beginning of the 1950s and at that time in prison in Vladimir."
  The judges' considered assessment carries infinitely more weight than the unconfirmed reply of Gromyko.
  In 1961 there was further evidence of Raoul Wallenberg's detention in the Soviet Union. Professor Svartz was told by the Russian professor Myasnikov that he knew of Raoul Wallenberg, who was in a mental

  721
  hospital. The Swedish Prime Minister wrote to President Krushchev, who became angry with Professor Myasnikov. The next time that Professor Svartz saw Professor Myasnikov the latter withdrew his statement and said that he did not wish to discuss the matter.
  In 1978 news reached Sweden that a Russian Jew called Jan Kaplan had met a Swede in the Butyrka prison in 1975 who had been in prison for 30 years. Jan Kaplan passed that message out through several different sources, and the Swedish Government took up the matter. They were referred to Gromyko's reply, but no serious attempt was made by the Soviet Government to investigate the detailed evidence of sightings of Wallenberg.
  It is significant that when the Swedish Prime Minister asked Soviet Prime Minister Kosygin to investigate all information and requested that a Swedish representative be allowed to speak to Jan Kaplan, that request was turned down. The Russian leadership gave the impression of being anxious that the facts of the case should remain hidden.
  I am glad that the hon. and learned Member for Leicester, West (Mr. Janner) is with us. He led a deputation to the Soviet embassy some time ago and I understand that he received a very unsatisfactory reply. I hope that he will catch your eye, Mr. Deputy Speaker.
  In those circumstances it is understandable that many of the witnesses did not wish their names to be published on the grounds that if they were there might have been serious recriminations against their families in the Soviet Union. Indeed, 1,200 pages of Wallenberg documents remain secret so that there should be no persecution of relatives in Russia.
  In 1979 the American Government, with the approval of the Swedish Government, raised the matter directly with the Soviet Union. 1 hope that today the Minister will make it clear to the Swedish Government that he, too, will join the American Government in giving whatever help he can to discover the whereabouts of Raoul Wallenberg and to obtain his release if he is alive. Already at the Madrid conference Britain has raised the matter in an international forum and no satisfactory reply was received. Can the Minister assure the House that the matter will not be allowed to rest? As the Swedish Foreign Minister said on 13 May 1979:
  "We always assume that missing citizens are alive, until we consider that convincing proof of their death is found. We must not give up."
  Raoul Wallenburg was a person of the deepest humanity and a great man in his own right. If the Russians should ask why we are so anxious about the fate of that one man, the reply must be that even if he had not been a person of great consequence he would still be entitled to justice and to freedom if he was alive.
  I do not know for certain that he is alive. I do not even know with certainty how long he might have survived in Russian hands, although I am very much aware of the detailed evidence from witnesses to the effect that they saw him for many years after Gromyko said that he was dead. But whether he is alive or not, the struggle to draw his case to the attention of the world is of major importance to remind us, first, of the vital truth that a genuinely good man can achieve immense victories even in the most adverse circumstances, and secondly, that whatever their claims to Socialism and to justice, the Soviet Union is a country in which individuals can disappear without a trace and the full facts be systematically withheld for ever more.
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  One might argue that, by acting as a symbol of prisoners of conscience, Raoul Wallenberg continues to serve humanity as he did all his active life. Nevertheless, I very much hope that he is still alive and that our efforts might do something to secure his release. In any case, the forces of totalitarian injustice must be reminded that, try as they may, the individuals who suffer at their hands will not be forgotten.
  2.42 pm
  Mr. Greville Janner: The House owes a considerable debt of gratitude to the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) for raising yet again the case of Raoul Wallenberg, that extraordinary hero of humanity.
  In a recent visit to Hungary I met some of the 100,000 people whose lives he saved by his extraordinary bravery. Travelling almost anywhere in the world where there are survivors of Hitler's catastrophe one finds among Jewish communities people who say that it is due to Raoul Wallenberg that they now live.
  It was another tragedy that he should disappear into the Soviet Union. His life and death, if there be one hereafter, are one of the great mysteries of the postwar world. We have only statements from the Soviet authorities that have been proved to be untrue, combined with a series of sightings and statements, each one of which on its own is almost unreal and unreliable, but when woven together form the cloth of reality that shows that this man is probably alive. Those who value his work and appreciate his heroism will not be prepared to accept the fact of his death unless it is proved in a way that has not so far been done.
  I am sure that the House would wish the Government to do everything possible to convince the Soviet authorities that the case will never be forgotten until it is solved, to ask them for the good name of the Soviet Union to produce evidence that the family of Raoul Wallenberg can accept about what has happened to him, to release him if he is alive and to prove his death properly if he is dead.
  In the recent Wallenberg hearing in Stockholm, we heard the evidence of people who loved and knew him and whose lives he saved. His case will not be forgotten in the House and I thank the hon. Member for Edinburgh, West once again for taking the opportunity to raise the matter today.
  2.45 pm
  Sir Nicholas Bonsor: I extend the personal thanks of the English branch of the Wallenberg family to my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) and indeed the hon. and learned Member for Leicester, West (Mr. Janner) for their kind words in support of his case and for raising the matter in the House today. I have little to add to what has already been said.
  With the assistance of the Swedish Government, my cousin's family has striven for more than a quarter of a century by every means available to it to discover the fate of Raoul Wallenberg and, if he still lives, to secure his release. As the House will know, all those efforts have been to no avail. If indeed he lives, I trust that even now in the few closing years that may remain to him, the Russian leaders will relent, give him back his freedom and send him home.

  723
  If Raoul Wallenberg is dead, as many of us fear, and if no further word is heard as to his fate, let the Soviet leaders be warned of the consequences. Their system of government is founded on violence, nurtured and fed by human sacrifices such as his, and sustained only by fear. Until that system has been utterly destroyed and its leaders with it, the name of Raoul Wallenburg will live on in the West as a beacon and a shining example to those who follow in his footsteps and who will continue his fight for freedom and justice until they are restored in all the countries of Eastern Europe, including Russia itself, which now suffer the tyranny of Soviet rule. The Soviet leaders will rue the day they deprived Raoul Wallenberg of his liberty and trampled on the principles and standards that he represented.
  2.47 pm
  The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): I congratulate my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) on raising this subject today. It is particularly appropriate that we have had the benefit of the contributions not only of my hon. Friend the Member for Nantwich (Sir N. Bonsor), who is related to the Wallenberg family, but of the hon. and learned Member for Leicester, West (Mr. Janner), who participated in the hearings in Stockholm in 1981 which brought to light further information regarding the fate of Raoul Wallenberg.
  It is particularly appropriate that the House of Commons, which has centuries of experience in supporting the cause of liberty and freedom, should on this occassion salute not only the memory but the achievements of Raoul Wallenberg. As my hon. Friend the Member for Edinburgh, West made clear in his eloquent speech, Raoul Wallenberg directly and indirectly helped to save the lives of up to 100,000 men, women and children. Anyone who has read the information available about his activities in Budapest in the closing days of the war cannot be other than intensely moved by the personal risks that he ran and the enormous and successful efforts that he made, the dramatic consequences of which allowed such a large number of his fellow human beings to survive at a time of great danger.
  It is all the more tragic that such a man, who deserved the grateful thanks of the whole world, should have simply disappeared into the inner recesses of the Soviet prison system from which he has never emerged. His history is tragic but it is also noble in that the spirits of many thousands of people have been uplifted not only by his achievements in the closing weeks and months of the war but by the symbol that he has been for them in the years since his disappearance in 1945.
  Reference has been made to the accumulating evidence and alleged sightings over the years suggesting the Raoul Wallenberg certainly survived for a considerable time after the end of the war and may even be alive today.
  It is important to emphasise that two clear facts are now established beyond doubt and accepted by all who take an interest in this matter, including the Soviet Union. One is that Raoul Wallenberg, despite claims by the Soviet Union in the immediate years after the war, did survive the war.
  724
  He was not killed during the last stages of that conflict, but survived for at least two years, until 1947. That is not disputed by anyone, including the Soviet Union.
  Equally, it has not been disputed since at least 1957 that during at least those two years Wallenberg was a prisoner of the Soviet Union, held in Soviet prisons. It is important to emphasise that those two factors are not in doubt or in question, even by Moscow. They are important because it shifts the whole onus to the Soviet Union to satisfy the family of Raoul Wallenberg and the whole international community as to exactly what happened to the man who was in their control for that time, and who may still be in their control.
  It is clear from the evidence that has accumulated over the period that the Soviet Union has failed to discharge that heavy onus on it, and has failed in a number of ways. It has yet to povide a satisfactory explanation of why Wallenberg was arrested in the first place. His contribution in defeating the objectives of the Nazis in Hungary was so outstanding and obvious to all who lived in Hungary at that time that for such a man to be arrested is something that requires an explanation which we have not yet properly received. The fact that it is accepted that, at the very least, until 1947 he was kept a prisoner of the Soviet Union has not been fully explained.
  The assertion in 1957 by Mr. Gromyko, the Soviet Foreign Minister, that Wallenberg died in 1947 is based on an alleged piece of paper that suddenly emerged in the inner recesses of the Soviet prison bureaucracy and which, as far as I am aware, has never been authenticated, and the reliability of which we are of course not in a position to test.
  The saddest aspect is that if the Soviet Union could deny any knowledge of Wallenberg's whereabouts and existence right up to 1957, what credence can we give to the assertion, in and since 1957, that he died some 10 years before that? Clearly the onus is on the Soviet Union to provide the international community and the family of Raoul Wallenberg with conclusive evidence, and it has failed to do that.
  Her Majesty's Government do not know whether Wallenberg is alive. We have no firm evidence to suggest conclusively that he is alive, but equally, we have no evidence that would lead us to assume that he has died. The evidence that has emerged on frequent occasions over the years consistently points to at least the possibility that he has survived those many years of incarceration. That is important in considering this question.
  My hon. Friend asked what assistance the United Kingdom Government could give. From a technical point of view, we have no strict locus, in that Raoul Wallenberg is a Swedish citizen who had no direct relationship with this country. However, we never for a moment thought that that was sufficient reason for not interesting ourselves in the case. It is a case which has shocked the conscience of the world and in which every freedom-loving Government must involve themselves and do what they can to help the Swedish Government in their efforts to secure knowledge of Raoul Wallenberg's fate and his release, if he is still alive.
  We shall continue to look closely at any new evidence that may emerge and that may point to his whereabouts and fate. We have assisted the Swedish Government over the years in contacting people in this country—British citizens and others—who may have been former inmates of Soviet prison camps and who may be in a position to help the

  725
  Swedish Government in their efforts. In addition, as my hon. Friend said, at the Helsinki review conference in Madrid November 1980 the British delegate spoke in favour of the Swedish attempts to open the issue and bring pressure on the Soviet Union to clarify the circumstances and give a proper answer to the questions that have been constantly raised.
  I give the unqualified assurance that we shall respond as helpfully and constructively as possible to any initiative taken by the Swedish Government in which they feel that we could perform a useful role with others in the international community in seeking a resolution of this great tragedy.
  Although the background to the Wallenberg case is unique, his fate is not. Over the years, tens of thousands have disappeared in the Soviet Union. Few have had the international reputation of Raoul Wallenberg, which has maintained the interest of the world in his case, but we should not forget that the nature of the Soviet system has had consequences of the sort graphically described by my hon. Friend the Member for Nantwich.
  Throughout the realm of human rights, the concepts of personal liberty and freedom which all hon. Members, whatever their political views, take for granted have been neglected in the Soviet Union. Some of the cruder brutalities of the Stalinist system have disappeared, but major erosions of the quality of life and personal liberty remain.
  Perhaps the Soviet Union believed that the Western world would gradually lose interest in the fate of an individual who disappeared as long ago as 1945. Public interest in issues often fades after weeks or months and especially after years. It is remarkable that, far from interest in Raoul Wallenberg having declined over the years, the reverse is true. Interest in the man and his fate is probably greater today than at any time since the war.
  726
  The decision of the United States Congress to award Raoul Wallenberg honorary citizenship, the Stockholm conference attended by the hon. and learned Member for Leicester, West, this debate and others in many parts of the world are proof that the cause of Raoul Wallenberg, what he stands for and his achievements during his short active career as a diplomat have had a major impact.
  Mr. Greville Janner: Is the hon. Gentleman aware that it is proposed to hold a major Wallenberg exhibition in London in the autumn? Will he assure the House that if the exhibition takes place, as is hoped, under the auspices of an all-party and interdenominational group the Government will do what they can to help that exhibition and to bring forward even more evidence to commemorate the life and, if necessary, the name of a great man?
  Mr. Rifkind: The Government will respond as sympathetically as they can to any new initiative, in this country or elsewhere, in which it is thought that British involvement and encouragement might assist. It is right to continue to recognise that this is primarily a matter for the Swedish Government, but we shall not hesitate to do anything that is thought to be useful or appropriate.
  I thank my hon. Friend the Member for Edinburgh, West for doing the House and the issue a great service by renewing our interest. The Government believe that the fate of Raoul Wallenberg is not only a demonstration of the basic inadequacies of the Soviet system, but that, irrespective of the wider issues involved, Wallenberg as an individual made such a major contribution to a humanitarian cause and achieved so much in saving the lives of so many of his fellow human beings that we should be doing less than our duty if we did not do all in our power to discover his fate and, if he is still alive, to ensure his release, for his sake and for that of his family.
  Question put and agreed to.
  Adjourned accordingly at one minute to Three o'clock.

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Preamble
The House met at eleven of the clock: THE LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Lincoln.

Royal Assent
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts and Measures:

Aviation Security Act,

Merchant Shipping (Liner Conferences) Act,

Northern Ireland Act,

Tees and Hartlepool Port Authority Act,

Lloyd's Act,

Cumbria Act,

Pastoral (Amendment) Measure 1982 (No. 1),

Clergy Pensions (Amendment) Measure 1982 (No. 2).

NHS: Industrial Action and Waiting Lists
Baroness Gardner of Parkes: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what effect the recent industrial action in the National Health Service has had on waiting lists for non-emergency surgical cases.
Lord Lyell: My Lords, any disruption of services which denies patients admission to hospital must inevitably lengthen the time they have to wait for operations and other treatment. It is also bound to increase the numbers on in-patient waiting lists and will cause hardship to people who have to wait longer for relief from pain or illness. We do not yet have statistics to show the precise effect on waiting lists of the strikes so far.
Baroness Gardner of Parkes: My Lords, I would thank my noble friend for that Answer. Could he confirm that it is very hard to differentiate between emergency and non-emergency cases, and that in many cases the patient is to be admitted for investigation of a condition which may appear non-emergency but may very well be emergency? Did the noble Lord see the report in the Sunday Times of seven women with lumps in their breasts who normally would have been admitted within 24 hours to St. Thomas' Hospital, but who instead were placed on the waiting list? One became so distraught that she was considered to be an emergency on psychiatric grounds and was later admitted. Is it not possible that all those women could really require emergency treatment and are not getting it?
Lord Lyell: My Lords, as I am sure my noble friend will appreciate, emergency and non-emergency classification is very much a clinical judgment of the doctors and specialists concerned. With regard to my noble friend's second point, indeed we have noted the article to which she refers.
Lord Wallace of Coslany: My Lords, will the noble Lord not agree that even before this regretted action waiting lists were already very long? Secondly, would he not agree that even at the present time the pattern is very varied throughout the country; that in some cases the action is causing minimal delay? Finally, bearing in mind the present situation of already existing long waiting lists, will the Government withdraw their freeze on new appointments of medical staff?—they are at the moment held back.
Lord Lyell: My Lords, as far as the noble Lord's first supplementary question is concerned, waiting lists are coming down; the latest figure which we have available is 620,000. That was in September last year. Your Lordships will be aware that during the last major disruption of this type, during the winter of 1978–79, waiting lists rose by 70,000 in three months. We do not have the figures of the effects on the waiting lists of the disruption so far.
So far as the noble Lord's second question is concerned, any action of this type, as I stressed in my first answer, is regrettable. Happily, we are able to confirm that this action is patchy; in some parts of the country there are more staff out on strike or taking industrial action than in others. So far as the third question of the noble Lord is concerned, no, we shall not.
Lord Wallace of Coslany: My Lords, did I understand the noble Lord to say that the Government will not stop their freeze on new medical appointments?
Lord Lyell: My Lords, it is rather a specialised question. I think perhaps I had better write to the noble Lord. We shall not withdraw.
Lord Richardson: My Lords, is the noble Lord aware, when he said that the decision as to whether a case was an emergency or not was a matter of clinical judgment, that in all cases it is indeed a matter of clinical judgment, and that the judgment is not taken for reasons other than clinical or by people other than those qualified to take that judgment?
Lord Lyell: My Lords, we are very grateful for the question from the noble Lord, who, of course, knows far more than anybody in your Lordships' House about clinical judgments and the terrible decisions that have to be taken as to whether a case is an emergency or not. It is regrettable that any decisions might be taken by people who are totally unqualified to give a proper decision as to whether patients should or should not be admitted.
Baroness Faithfull: My Lords, may I ask my noble friend the Minister if the situation is not very serious in mental hospitals, when they are having to deal with section cases for compulsory admission under the

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Mental Health Act? Would he not agree that the doctors are doing splendid work in doing work which is not rightly theirs?
Lord Lyell: My Lords, so far as my noble friend's first question is concerned, I am afraid I have no specific figures of mental patients. Perhaps I could ascertain the answer and possibly write to her. I did not quite catch her second question.
Baroness Faithfull: My Lords, my experience and knowledge is that many of the doctors are standing in for the staff because, of course, the patients must be cared for and, therefore, must we not congratulate them for doing this?
Lord Lyell: My Lords, if, as my noble friend says, doctors are caring for patients in the absence of staff, then we certainly give our unqualified congratulations.
Lord Davies of Leek: My Lords, when figures are given for waiting lists, can the noble Lord tell us whether outpatients are included who normally go for a check-up once every two, three or six months? Are those people included in the waiting lists?
Lord Lyell: My Lords, I am afraid that I do not have the length of the waiting as regards the figures which I gave—namely, approximately 620,000. That was the situation last September. The only classification which I have available this morning concerns the different types of treatment for which these patients were waiting—general surgery, orthopaedic surgery, ear, nose and throat and those types of classification. I do not have classification as to how long patients have been waiting.
Lord Auckland: My Lords, serious as the situation is in the teaching hospitals, would my noble friend not agree that in the non-teaching hospitals, particularly in rural areas, the situation is still more critical? Will he ask his right honourable friend to pay special attention to these hospitals, where there is often a shortage of staff in any case?
Lord Lyell: My Lords, certainly I shall be very glad to draw the attention of my right honourable friend to my noble friend's comments.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that I did not quite understand the result of the answer he gave to the question on clinical authority to decide emergency cases? Is the final decision about whether a case is an emergency that will be allowed through taken by the medical man, or is it taken by the non-medical man, such as the porter or any such person? Who makes the final decision as to whether a case is an emergency?
Lord Lyell: My Lords, I understand that my noble friend wishes me to give a ruling. I understand that the judgment about whether a patient is or is not an emergency is given according to clinical parameters. The question of whether the patient is or is not admitted to the hospital I do not think necessarily, in the final outcome, has anything to do with the judgment as to whether the patient is or is not an emergency.
Lord Campbell of Alloway: My Lords, is my noble friend aware that the practical and effective decision is taken in the street, at the gates, by the pickets?
Lord Harmar-Nicholls: My Lords, that is what I am asking.
Lord Lyell: My Lords, regrettably it seems that the final judgment as regards entry of the patient into hospital—the patient may well be an emergency case and that will certainly be decided by the clinical specialist concerned—is not always taken by the medical specialist.
The Lord Privy Seal (Baroness Young): My Lords, I can see that this is a matter of great interest to the House, but I think your Lordships would recognise that we have now spent nine minutes on this Question. Therefore, I think that we should move on to the next one.

Museum of Childhood
11.15 a.m.
Lord Strabolgi: 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 reject the suggestion in the Rayner Report that the Museum of Childhood in Bethnal Green should be closed.
The Earl of Avon: My Lords, the recommendation of the recent Rayner Report was that admission charges should be introduced at the Museum of Childhood in Bethnal Green with a view to covering the museum's recurrent costs and, if that were to prove impossible, that consideration should be given to closing down the museum.
When my right honourable friend the Minister for the Arts announced the publication of the Rayner Report on 27th May he said there was to be a period of consultation about the recommendations which would last until early August. Decisions will be taken when consultations are complete.
Lord Strabolgi: My Lords, while thanking the noble Earl for replying to my Question, may I ask whether he is aware that this museum houses the biggest and best toy collection in the country and that it is of worldwide importance? Is he further aware that it provides an important service in any area where there are not many cultural amenities? Finally, is he aware that this proposal has been received in Bethnal Green and elsewhere with a sense of outrage?
The Earl of Avon: My Lords, I am indeed aware of all the three points that the noble Lord makes, and I am grateful to him for stressing them today.
Lord Beaumont of Whitley: My Lords, is the noble Earl aware that the Rayner Report did not, in fact, touch on any of the matters dealing with the local

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population and their effect in the locality? Will the Government, therefore, not make up their minds on this particular matter until they have taken that factor into the equation, which was so unreasonably left out?
The Earl of Avon: My Lords, I undertake to make sure that my right honourable friend does indeed take local considerations into account.
Lord Renton: My Lords, is my noble friend aware that it is well worth making a pilgrimage to Bethnal Green, accompanied by one's children or, as the case may be, one's grandchildren, to visit this fascinating museum and it would be a great pity if children, especially, were made to pay any charge to enter it?
The Earl of Avon: My Lords, I take note of my noble friend's point.
Lord Jenkins of Putney: My Lords, is the noble Earl aware that there is just as much all-party opposition to the closure of the children's museum in Bethnal Green as there is to the proposal not to proceed with the Theatre Museum? Is he further aware that the idea of introducing charges would be peculiarly repugnant in this delightful museum which is devoted to children?
The Earl of Avon: My Lords, I do indeed recognise the all-party support against the proposal in this House, as I did during the debate on the Theatre Museum. I shall, of course, bring all these remarks to the attention of my right honourable friend.
Lord Donaldson of Kingsbridge: My Lords, very briefly I should like to add support from this Bench. Is the noble Earl aware that the excuse given for this recommendation is that there have to be priorities? Will the noble Earl not agree that priorities for doing something new have to be considered in an entirely different way from priorities concerning destroying something good which already exists?
The Earl of Avon: My Lords, I take the noble Lord's point. My own fascination has been to study what is actually in the museum and I entirely agree with him.
Lord Strabolgi: My Lords, is the noble Earl aware that the Government are on record as saying that they do not propose to introduce entrance charges to the Victoria and Albert main museum in South Kensington? Why should the people of the East End have to pay to go into their museum while those in Knightsbridge and the smarter parts of London go in for nothing?
The Earl of Avon: My Lords, perhaps I might refer the noble Lord, Lord Strabolgi, to the Government's position on charges. The Government do not intend to impose charges for general admission to the main collections, nor to change the well-established practice of charging for entry to some outstations. But it would be open to new trustees to make proposals on these matters.

The Israeli-Palestinian Dispute
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the statement of Dr. Issam Sartauri, PLO representative in Paris, confirming the reported statement of Mr. Arafat in The Times interview, that the PLO has agreed "in the most unequivocal manner the right of Israel to exist on a reciprocal basis … in sovereignty and within secure borders", they will now urge the United Nations Security Council to initiate negotiations for a settlement of the Israeli-Palestinian dispute.
Lord Skelmersdale: My Lords, the statements by Dr. Sartauri and those reported to have been made by Mr. Arafat appear to be a constructive step towards the mutual acceptance of Palestinian and Israeli rights. But we have not seen evidence that they can be taken as fully authoritative. We do not consider that the time is right for a successful initiative in the Security Council.
Lord Brockway: My Lords, is not this Question tragically significant because of the assassination this morning of the deputy head of the PLO? Can the Minister say whether these specific statements now supported by the PLO acceptance in New York of Resolution 242 do not provide the opportunity of reconciling Palestinian self-determination with Israeli security? Should it not be seized immediately and comprehensively, not only to contribute to a solution in the Middle East but to end the disastrous conflict in the Lebanon? Does not the fact that there are now in New York the Foreign Ministers of Syria and Saudi Arabia as well as representatives of the PLO, make a meeting of the United Nations Security Council possible and promising?
Lord Skelmersdale: My Lords, I said in my original Answer that I do not think the time is now right for a successful initiative in the Security Council. I must tell the noble Lord, Lord Brockway, that the reason for this is that Israel remains totally opposed to dealings with the PLO. However, this does not amount to a veto.
As to the events in Paris overnight, for the second time this week I was both sickened and saddened by a terrorist attack. Although the Paris police have not yet confirmed the identity of the victim, he is believed to be Fadel el-Dain, the deputy director of the PLO's Paris bureau for the last two years. If so, he will be the twelfth PLO official to be assassinated since 1979. I note that the PLO are as liable as anyone else to terrorist attack.
Baroness Gaitskell: My Lords, is the Minister aware that the terms which the PLO set for accepting the state of Israel are deeply offensive to Jews all over the world and to the Israelis? They simply say that Israel can have autonomy—that it can be free—by permission of the PLO. This is utterly unacceptable to Jews everywhere.
Lord Skelmersdale: My Lords, I think that the noble Baroness is reading more into the situation than actually exists.
Lord George-Brown: My Lords, as one who had something to do with the drafting and the ultimate passage of Resolution 242, is the Minister aware that if—as is reported in the papers—the PLO at any level in New York have indicated to Mr. Habib or to any other official that they are now ready to accept that resolution, it would mean that something for which we have been pushing ever since it was passed is now a matter of great significance? If the noble Lord has no direct knowledge of this, would he ask our representatives in New York without delay to seek an authoritative statement that the PLO will now accept that resolution?—because, if so, much then becomes possible.
Lord Skelmersdale: My Lords, I am glad that the noble Lord, Lord George-Brown, has picked up my point on authoritative statements, and with his experience I had no doubt that he would. I should like to make a remark which, in fact, I should have made to the noble Lord, Lord Brockway, but I regret that in my answer to his list of questions I omitted this one. We have, of course, long pressed the PLO to proceed by peaceful means, accepting Israel and renouncing terrorism. If they were able to take this step in a clear way and so begin a dialogue with the United States, that—and I agree, with the noble Lord, Lord GeorgeBrown—would be a most welcome development. However, rumours of the PLO recognition of Israel emanate from Beirut. So far as we know, they were not discussed at the recent talks in Washington to which the noble Lord, Lord Brockway, referred.
Lord Beloff: My Lords, does my noble friend the Minister not think that it is not very helpful to the cause of peace to pick out and put on your Lordships' Order Paper quotations from the press which, by the time they are discussed, may have been overtaken by other statements?—in this case, a day later a statement from the State Department that they had no knowledge of such an agreement. Would it not be better to confine our discussions of these matters to occasions when the subject can be thrashed out in the light of information afforded to us officially?
Lord Skelmersdale: My Lords, in a measure I agree with my noble friend. However, as I understand it, the purpose of Question Time—and without the little red book to hand it is difficult to be precise—is to elicit the views on particular matters that concern noble Lords and to get the Government's response. I hope that this morning I have been able to achieve that aim.
Lord Gladwyn: My Lords, do the Government think that the recent utterances of Mr. Begin on the question of a Palestinian state conflict in any way with Security Council Resolution 242?
Lord Skelmersdale: My Lords, I am unaware of recent utterances by Mr. Begin on this particular point, so I am afraid that I cannot answer the noble Lord.
Lord Annan: My Lords, would the noble Lord agree that many Members of your Lordships' House welcomed his first reply to the Question put to him? Would he not also agree that it is a total delusion to imagine that, when Mr. Habib has been negotiating for seven weeks in Beirut, this matter can, in a flash, be settled in the United Nations? Would he also agree that at this time we should not forget the Lebanon, which, unfortunately for that wretched country, did not have the power which the wise King Hussein of Jordan had to expel the PLO from its territory?
Lord Skelmersdale: My Lords, I am in total agreement with the views just expressed by the noble Lord.
Lord Caradon: My Lords, would the noble Lord the Minister not agree that, quite apart from statements by one side or the other in the dispute, which are of course important, there is an obligation on this country in particular, and also on the Security Council, to seek a settlement of this problem based on the principles which have been accepted ever since the noble Lord, Lord George-Brown, put forward his proposals in 1967? Is it not, therefore, necessary that this country in particular, having a special responsibility, should in the Security Council seek a settlement of the dispute going back to the basic requirements of a settlement, rather than spending time arguing about the exact wording of the statements from one side or the other?
Lord Skelmersdale: My Lords, the noble Lord has very much more experience in these matters than I have. However, it is most essential to lay one's groundwork before the subject comes up for discussion in the Security Council. This is what Mr. Habib with our support and the support of our EEC partners is seeking to do.
Lord Ardwick: My Lords, is the noble Lord aware—
Baroness Young: My Lords, once again I recognise that we are discussing a Question that is of great interest to your Lordships, but I think that it would be the wish of everyone that we should move on to the next Question.

Architectural Heritage: Central Thames Area
11.30 a.m.
Lord Wynne-Jones: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps they propose to take to protect the architectural heritage of the central area of the Thames within a 3-mile radius of the Palace of Westminster.
The Earl of Avon: My Lords, it is the responsibility of local planning authorities in the first instance to make plans, adopt policies and prepare design briefs

1083
which ensure that important sites receive the attention due to them. Local planning authorities also have the power to determine which parts of their area are of special architectural or historic importance and to designate them as conservation areas.
Lord Wynne-Jones: My Lords, I thank the noble Earl for his Answer, partial and unsatisfactory as it is. Can the noble Earl say whether it is the intention of the Government, not separate individual local authorities, to favour some overall plan which covers various local authorities and deals with the area mentioned in my Question?
The Earl of Avon: My Lords, we of course covered some of this ground in this House only 13 hours ago. There are already 120 separate conservation areas within three miles of Parliament which are designed to protect the best of our architectural heritage. One of the factors we must bear in mind is that to spread resources more thinly by blanket coverage would lessen considerably the value of conservation areas generally. The Government are determined to see that the proper architectural heritage of our country is kept.
Lord Elwyn-Jones: My Lords, has the Secretary of State power to call in planning applications in areas of great importance from the heritage and general amenity point of view?
The Earl of Avon: Yes, my Lords, indeed he has.
Lord Elwyn-Jones: My Lords, why is it not more frequently done in the case of the Thames, which is rapidly being turned into a kind of culvert with great buildings piling up on each side of it?
The Earl of Avon: My Lords, I am grateful for the noble and learned Lord's point. I only wish that he had been here last night to hear just how many times the public inquiry provision had been used.
Lord Beaumont of Whitley: My Lords, will the Government consider how their reaction to this particular suggestion can be brought into line with their determination last night to take through the special development order? If you are going to bring in special development orders on sites of this nature in this area, should you not also consider carefully the possibility of a whole defence of the whole area?
The Earl of Avon: My Lords, as I said last night, Vauxhall Cross is a special instance and this is by way of a first time case—the first time for a specific property of this nature in London. Therefore, we shall see how that one goes. On the noble Lord's sequence of questions, I think without reopening the debate of last night I cannot go much further.
Lord Kilmarnock: My Lords, can the noble Earl tell the House whether the Government accept in principle the idea put forward last night by the noble Lord, Lord Duncan-Sandys, for a special commission to consider the whole Thamesside area?
The Earl of Avon: Yes, my Lords. As I said to my noble friend last night, we will indeed consider the suggestion he put forward.

Employment Bill
Lord Denham: My Lords, on behalf of my noble friend Lord Ferrers, I beg to move the Motion standing in his name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order: Clause 1, Schedule 1, Clauses 2 to 22, Schedules 2 to 4 —(Lord Denham).
On Question, Motion agreed to.

Derelict Land Bill
11.34 a.m.
The Earl of Avon: 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.—(The Earl of Avon.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 1 [Powers of Secretary of State]:
The Earl of Caithness The Earl of Caithness moved the following amendment:
Page 2, line 43, leave out ("80") and insert ("90").
The noble Earl said: In moving this amendment, I would apologise to the Committee because it was printed incorrectly in the first place. This is a small amendment but is of major importance. It deals with the question of why the Government are not supporting and encouraging wholeheartedly private applicants, nationalised industries, and statutory undertakers in their efforts to reclaim derelict land. My noble friend Lord Avon said on Second Reading, on 16th July at col. 591:
"It is part of Government policy to try to regenerate the inner urban areas so that land is not taken at the expense of green fields".
If that is the policy, then why do not the Government actively pursue it to its conclusion?
They are happy to give a 100 per cent. grant to local authorities and the English Industrial Estates Corporation which, incidentally, has been partly financed from private funds since July 1980, but when it comes to private applicants the grant is limited to 80 per cent. One might have expected that treatment from another party, but hopefully something better from this Government. There is considerable derelict land available for reclamation which is in non-local authority ownership, but incentives and parity are needed to release this land. Why should these owners enter into a project with a probability of a built-in 20 per cent. loss? Why are the Government deliberately discriminating against the private owner who

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has the added disadvantage that he has to borrow money at probably higher rates of interest than local authorities can from the banks, the insurance companies, or the market?
Under the present policy, the private sector will have to pass on the additional costs following reclamation to the eventual buyer or user. In most cases these costs cannot be passed on. The result is that the land will not be reclaimed and another green field site will be chosen for development. The present policy will mean a continuation of loss of good agricultural land, which is running at an average of 45,800 acres a year. It will mean that the derelict land bank will only increase and consequently so will the inner city problems.
I had hoped that this Government would not be a party to such a policy. I would have liked to try to amend the increase of the rate of grant from 80 per cent. to 100 per cent. but the Government set themselves against this in another place, and so I hope that they will accept my very reasonable compromise of 90 per cent. After last night, I am no longer sure that all noble Lords wish to see derelict land improved, but I hope that most noble Lords will and that they will also wish to see a situation where the private sector can play its part constructively and take a lead in these matters. The Government hope that they will do so will, alas, be in vain unless they change their present proposals. I beg to move.
The Earl of Avon: I understand my noble friend's concern that the private sector, which in this case includes the nationalised industries, should receive the maximum aid possible to help them to go in for the reclamation of derelict land which they themselves own without having to involve local authorities. The Government want to encourage this new opportunity not only for its own sake but also for the sake of the local authority programme. In so far as the non-local authority sector can take on land reclamation directly, to that extent the task will not fall upon local authorities. They will thus be able to devote grant-aided expenditure on other schemes. We have set out specifically to encourage the private sector by introducing these grants.
I do not pretend that in the immediate future this effect on local authority programmes will be more than marginal. The noble Earl referred before in our earlier stages of this Bill to the "paltry" £1 million provided this year compared to the £45 million for local authorities. But until we can be clearer on what the future take-up by the private sector is likely to be, this start which the Government are suggesting should, I believe, be properly modest.
I appreciate the care with which my noble friend has presented his case, which he put very cogently. I also appreciate his ingenuity in tempting me with 10 per cent. rather than a complete percentage rise. However, his concern is to promote this take-up by the private sector to a degree which nevertheless will leave some incentive to carry out work with the self-interested virtues of sobriety of judgment and economy of outlay. This is the kernel of the matter and exactly what preoccupied the Government when they decided that 80 per cent. struck the right balance and that this
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was the highest rate it was considered now correct to go to.
As I said on Second Reading, the Government are prepared to look at the rate again in the light of experience over the next 12 months, and this will be done. If any of your Lordships have the opportunity during this time to encourage the private sector to take advantage of these grants, that would help in the review. I hope my noble friend Lord Caithness will accept that this is a reasonable way to proceed and will be prepared to withdraw his amendment on that understanding.
Lord Elwyn-Jones: My noble friends and I agree that it is desirable that reclamation of derelict land should be tackled both in the public and private sectors. We have noted the increase which has already been proposed by the Government, from a 50 to 80 per cent. grant in this area, which we think is a good stimulus and should be a sufficient stimulus in assisted areas and derelict land areas to encourage private developers to take more seriously the development opportunities in derelict land areas which exist, while—to use a phrase of the noble Earl on an earlier occasion—providing for the most economic use of public funds in this private sector territory. I listened with admiration to the ringing phrase about the desirability of combining sobriety of judgment with economy of outlay. Those words will add the noble Earl's name to those who propound distinguished observations in your Lordships' House. We think 80 per cent. is about right.
The Earl of Caithness: I am grateful to the noble and learned Lord, Lord Elwyn-Jones, for his limited support. Clearly the support is there, although I should have hoped he would have come a little further down the road with me. I am also grateful to my noble friend for his reply, which I anticipated, although I had hoped it might have been a little more generous. A start was made by the Government two years ago when they introduced a 50 per cent. grant to private applicants. That failed because the private applicant had to start a scheme with a 50 per cent. built in loss. He now has the encouragement of having to face only a 20 per cent. loss. Can the Minister confirm that he will look at the matter within 12 months if there is no take-up of the grant by applicants? We shall by then be running towards a general election and I fear for the future, should this party not be re-elected, and for private applicants in particular, who are desperately keen to grasp the nettle of reclamation of derelict land but who might not be able to do so with another party in power.
The Earl of Avon: I am pleased to confirm what I have already said, that in the light of experience over the next 12 months the Government are prepared to look at the matter again. I am sad that my noble friend should be so pessimistic about our chances. I feel I shall be here for at least another six years.
Lord Harris of Greenwich: I rise simply to point out that the party represented on this Bench propose to adopt a most reasonable approach to this question after the next general election, so the noble Earl need have no fears.
The Earl of Caithness: Is the party on that Bench adopting a reasonable approach now? If so, they must support me. In any event, I am grateful for my noble friend's comments and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Remaining clauses and the schedule agreed to.
House resumed: Bill reported without amendment. Report received.

Criminal Justice Bill
11.45 a.m.
Further considered on Report.
Lord Sandys Lord Sandys moved Amendment No. 86A:
After Clause 54, insert the following new clause:
("Deferment of sentence. 1973 c. 62
. Section 1 of the Powers of Criminal Courts Act 1973 (which gives a court sentencing an offender the power to defer passing sentence on him) shall have effect subject to the following amendments—

(a) in subsection (1), for the words from "to have" to "sentence" there shall be substituted the words "or any other court to which it falls to deal with him to have regard, in dealing with him";

(b) the words ", subject to subsection (8A) below," shall be inserted after the word "and" in subsection (2);

(c) the words "deal with" shall be substituted—

(i) for the words "pass sentence on" in subsection (4);

(ii) for the words "pass sentence on" in subsection (4A); and

(iii) for the word "sentence" in the second place where it occurs in subsection (5); and

(d) the following subsections shall be substituted for subsection (8)ߞ

"(8) The power of a court under this section to deal with an offender in a case where the passing of sentence has been deferred thereunder—

(a) includes power to deal with him in any way in which the court which deferred passing sentence could have dealt with him; and

(b) without prejudice to the generality of the foregoing, in the case of a magistrates' court, includes the power conferred by section 37 or 38 of the Magistrates' Courts Act 1980 to commit him to the Crown Court for sentence.

(8A) Where, in a case where the passing of sentence on an offender in respect of one or more offences has been deferred under this section, a magistrates' court deals with him by committing him to the Crown Court under section 37 or 38 of the Act of 1980, the power of the Crown Court to deal with him includes the same power to defer passing sentence on him as if he had just been convicted of the offence or offences on indictment before the court.".")
The noble Lord said: My Lords, this amendment, with which it would be convenient to discuss No. 124ZA, gives effect to an undertaking given by the Government on Report in another place in response to an amendment which had the support of the Parliamentary All-Party Penal Affairs Group. Section 1 of the Powers of Criminal Courts Act 1973 gives the courts the power to defer passing sentence on an offender for up to six months from the date of his conviction. This is a
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useful power which enables the court to take account of an offender's behaviour after conviction where something points to a material change which might affect its decision about the appropriate sentence, such as the prospect of employment or marriage or where the offender has promised to make voluntary reparation. This may, for instance, lead a court eventually to give a non-custodial sentence where a custodial sentence might normally have been called for.
The effect of the amendment is to remove the present restriction in Section 1(8) of the Act on the power of magistrates to commit an offender to the Crown Court for sentence following a period of deferment. This provision was inserted in the Act by means of Schedule 12 to the Criminal Law Act 1977, following a decision by the Court of Appeal in R. v. Gilby. There has been consistent opposition to that decision, not least from the Magistrates' Association and the Justices' Clerks' Society, and it was argued strongly in another place that the present restriction inhibits magistrates' courts from ordering a period of deferment in cases where the eventual outcome might be a non-custodial sentence but where, if the offender did not respond to deferment, the right course might be to commit to the Crown Court for sentence, thus leading to a potentially unnecessary use of custody.
We agreed to give further consideration to this after consulting with the Lord Chief Justice, who concluded that magistrates should be given power to commit to the Crown Court for sentence in these circumstances, and that Section 1 should be amended accordingly. This new clause is the result. Amendment No. 124ZA simply repeals the now redundant provision in Schedule 12 to the Criminal Law Act 1977. I commend the amendment to the House and I think it will be widely welcomed.
Lord Elystan-Morgan: My Lords, we on these Benches greatly welcome the amendment. It gives magistrates' courts a highly desirable degree of flexibility, and previous to the decision of the Court of Appeal in R. v. Gilby, it was widely assumed that they had in fact enjoyed that power. We feel that the case for it is overwhelming, in that much may have elapsed from the time the court is originally seized of the matter to the end of the period of deferment, and for those reasons we greatly welcome it.
Baroness Trumpington: My Lords, I echo those feelings of gratitude to the Government. I am sure I speak on behalf of the members of the All-Party Penal Reform Group when I say how pleased we are about the amendment being made. If proof were needed of the flexibility of this Government, and in particular of the Home Office, for a sensible suggestion being taken up and implemented, this is it.
On Question, amendment agreed to.
11.50 a.m.
Lord Avebury Lord Avebury moved Amendment No. 86B:
Page 60, line 9, leave out ("Schedule") and insert ("Schedules 2 and").
The noble Lord said: My Lords, I beg to move this amendment and, with your Lordships' permission, I should like to speak also to Amendment No. 86C,

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and in doing so to give the noble Lord the Minister another opportunity of demonstrating the great flexibility of the Home Office and of providing a further example of the purpose of the Bill, which he repeated on several occasions under questioning by my noble friend Lord Wigoder the last time that we were dealing with it. He then said that the main objective that your Lordships have to tackle is a reduction in the prison population. In this pair of amendments I am concerned with a reduction in the prison population of persons who find themselves there as a result of the powers in the Immigration Act 1971.
The amendments seek to amend the Immigration Act 1971 so that bail would be provided in all circumstances where a person is liable to be detained, except of course where he is detained prior to examination by an immigration officer at the port of entry, and not just to the cases where the person has a right of appeal to the adjudicator of the tribunal. As the Act stands at present, bail is limited to those circumstances where a person has exercised the right of appeal against a decision by the Secretary of State or an immigration officer. A person detained normally has 14 days after the date of the decision to exercise that right, but in the intervening period of two weeks he has no right to apply for bail.
An immigration officer, or the Secretary of State, has power under the Act to grant temporary admission or release to persons who do not qualify for bail, but as those of your Lordships who have dealt with immigration cases will know, this system has serious disadvantages. The only conditions that can be attached are conditions as to residence and to reporting to the police, and that might be one of the reasons why the power is fairly sparingly exercised. We all frequently have people offering to come forward with sureties and other guarantees that they will comply with conditions, and of course they have to be told that this is not within the powers of the Secretary of State. There are no provisions whatsoever in the Act for a person so released under temporary admission to be subject to any other conditions, or for sureties to be provided. Therefore the amendments strengthen the terms upon which a person detained under the Immigration Act can be released, and add to the confidence of the authorities that it would be safe to do so.
I do not want to weary the House with a long list of examples of cases where a person is not able to apply for bail, but I should like to mention only one case, of which the noble Lord might be aware. It is that of Mr. Abdul Qayum Butt, who has now been in the Ashford Remand Centre for upwards of six weeks, having been detained after refusal of admission as a result of an exclusion order issued by the Secretary of State. Mr. Butt is awaiting attempts by the representative in London of the United Nations High Commissioner for Refugees to find him somewhere else where he can settle. This is an extreme example of the kind of thing that we face. Mr. Butt, who has committed no offence against our laws, and who, on the Home Office's own admission, is a refugee within the meaning of Article 1 of the convention, nevertheless finds himself occupying a place in one of our penal establishments for a virtually indefinite period without the right of habeas corpus, without the right to appeal
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to a court for bail, or the right to make representations for his release pending a complete solution of his case, other than those that are made unofficially through parliamentary channels to the Secretary of State. That example could be multiplied indefinitely, and I think that your Lordships can see how wrong it is that people should be detained in penal establishments in this manner, without any right of access to the courts, or to a tribunal.
The amendments provide for an adjudicator to consider a bail application unless the matter is one on which the detainee has a right of appeal to, or an appeal pending before, or has had an appeal determined by, the tribunal. In such cases an application can be made to the tribunal for bail; and there is an amendment to paragraph 29(4). Where bail can at present be granted under the Act, applications are considered by the ajudicator or tribunal, depending on the forum to which the detainee has right of appeal, and, your Lordships might think that in those circumstances when we are extending the right to apply for bail it would be proper also to provide that the person should apply to the adjudicator or the tribunal.
As the Act stands, there is no presumption of a right to bail specifically stated. As your Lordships know, the Bail Act 1976 sets out such a presumption in criminal cases, and it seems right that it is of even more importance to provide for such a presumption where a person has not committed any criminal offence. That point has been dealt with in the amendments by inserting the word "shall" instead of the word "may" in paragraph 29 (1) and (2). Paragraph 30(2) sets out circumstances in which bail can be refused; and that has been left unaltered. Indeed, the paragraph has been strengthened by inserting an additional head, (f), which makes it clear that the adjudicator, or the tribunal, as the case may be, can refuse bail if it is concluded that the detainee is likely to fail to answer to his bail.
It might be argued that it is wrong to grant bail to a person who is an illegal entrant, who has, for instance, just been apprehended on a beach, or a person against whom a deportation order has already been signed. I think that the answer to that is that the circumstances which resulted in detention are not in themselves the deciding factor. The real question that has to be determined is whether the person would abscond if granted bail. Clearly it would be a brave adjudicator who would grant bail to an illegal entrant with sand on his shoes. On the other hand, there are a number of cases at the moment where the Secretary of State has given temporary release to persons against whom he has already signed deportation orders, and clearly in such cases the Secretary of State must have satisfied himself that the deportee would not go to ground.
Similarly, an adjudicator ought to be able to grant bail in such circumstances where he can be likewise satisfied. Again, it should be emphasised that the bail system provides for more stringent conditions attached to release, as well as providing for surety. So the kind of conditions that are imposed by magistrates in appropriate cases include curfew, limitations on movement (such as not going into the West End) surrender of passports—and, by the way, under the

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Immigration Act there is no authority for an immigration officer to retain a passport—and so on.
Paragraph 30(1) has been deleted since it seems to negate the right to bail in deportation cases, because in all deportation cases where there is a right to bail under the Act the Home Secretary has the power to give directions for removal. I believe that it is generally agreed among those who have to deal with these matters that the sub-paragraph is badly drafted and is inconsistent with the other provisions. I beg to move.
Lord Campbell of Alloway: My Lords, I should like to say a few brief words in opposition to the amendment. The noble Lord, Lord Avebury, who has vast experience in these matters, at once recognises the problems of mandatory bail in the circumstances related to the gentleman to whom he referred. If he is allowed free, he tends to be difficult to find, much to the expense and inconvenience of the executive. The noble Lord also very fairly recognised that the effect of the run of the decisions of the courts is that the illegal entrant, in effect, has no rights. In these circumstances, is not the balance about right, and ought not the amendment to be rejected?
Lord Elton: My Lords, these amendments came somewhat late before your Lordships and changed their guise in one respect even later. However, their principal effect to which I shall address myself appears now to be to give to almost any person detained under the Immigration Act a presumptive right to bail. At present the only detainees under the Act who may apply for bail are those who either have an appeal pending or who after seven days are still held for questioning at a port, and except in certain circumstances there is no presumption in favour of it. This position will be a little altered by what was done in this Bill in another place. At the Committee stage the Government moved amendments to deal with a small and specific difficulty in relation to people recommended for deportation by the court. Under the present law such persons are detained unless the court directs their release, and that release cannot be made subject to conditions. We accepted that it was desirable for courts to have the power to impose conditions in these cases, and we did so because that would enable more people to be released, and this, as the noble Lord, Lord Avebury, rightly pointed out, is what the Government amendments are designed to achieve.
The amendments moved by the noble Lord go much further. They relate not only to persons recommended by a court for deportation but to almost all other persons who may be detained under the Act; that is, people at ports who have been refused leave to enter and are to be removed, illegal entrants who are to be removed, even people whom my right honourable friend has personally certified should be detained pending deportation procedures, and people against whom my right honourable friend has made a deportation order already. In all these cases the amendments would give a person a presumptive right to bail. In the Government's view, it would not be right to confer such a right. The Immigration Act already provides means by which such a person may be released where
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this is appropriate. A person who is refused leave to enter may be temporarily admitted by an immigration officer pending his removal. An illegal entrant may similarly be released. In the Government's view, the present arrangement provides a reasonable framework. There seems no justification for providing a right to apply for bail for a person who does not have a right of appeal. Furthermore, this would be an additional burden on adjudicators and, as my noble friend has rightly pointed out, on administrators and those who have to enforce the law, as well. We have sought to reduce the delays in the immigration appeals systems over the last two years and during that period there has been a very considerable improvement which has been particularly beneficial to dependants abroad applying to join their sponsors here. These amendments would tend to reverse the welcome reduction in waiting times for appeals to be heard.
A second major objection to these amendments is that they create a presumption in favour of bail for any Immigration Act detainee. It will be clear from what I have already said that there are powers under which such persons may be released where appropriate. The Government have taken steps to increase the use of these powers of release. Release should be considered wherever possible, and indeed it is. The fact remains that persons detained under the Immigration Act are in a special position. Their detention flows from the fact that their claim to be in the country is in doubt.
In many cases, there has been a definite decision to remove them. In such circumstances, and particularly bearing in mind the difference in many cases between conditions here and those in their own countries, they have a peculiarly strong incentive to abscond. My noble friend alluded also to this in guarded terms. This does not apply in the same way to any other single group, whether they have sand or snow on their boots. It seems quite wrong in principle, for instance, that where my right honourable friend has signed a deportation order against a person who will very shortly be placed on a ship or aircraft, there should be a presumption in favour of granting that person bail.
Under the Bail Act the presumption in favour of bail is enforced by the creation of a new offence of failure to answer to bail, for which a person may be imprisoned; but it would be anomalous to apply this to Immigration Act detainees. The object of the immigration control is to remove such people as quickly as possible, and it would make no sense for a passenger who was refused entry to be serving a sentence of imprisonment before being removed.
I feel I should say, in conclusion, that we should not exaggerate the scale of the problem. Under the present arrangements the average number of people in detention under the Immigration Act powers on any day last year was only about 145. This figure relates to all those detained for whatever reason, and to those detained at Harmondsworth as well as those in prison department establishments. I know and take well the point of the noble Lord, Lord Avebury, which he made in the debate on the last Report stage day of the Bill, that if even one person is helped then it is worth improving legislation, but this really is a very small number of people whose cases are in many instances

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really dubious; and, in some cases, the presumption of the right in favour of bail appears ridiculous.
There has been an increase in the use of temporary admission and there are proper powers already in the Act for release on bail. The arrangements for release have been improved by amendments made in Committee in another place. To go further, as these amendments seek to do, in my view could only damage immigration control. In the Government's view, reasonable though the Government and particularly the Home Office have been shown to be, these amendments seem to us unnecessary as well as wrongly conceived, and I hope they will not be received.
Lord Donaldson of Kingsbridge: My Lords, this amendment was really by way of a probing amendment and the noble Lord on the Front Bench has given us a very adequate reply with which I personally am satisfied.
Lord Avebury: My Lords, it was good of the Minister to deal with this matter in such detail, and what he has said has provided us with food for thought. I will say at this stage only that I do not consider it a small matter that 145 persons are detained in our penal establishments when they have committed no criminal offence. We shall certainly have to return to this matter, not perhaps at a later stage of this Bill—because I agree with the noble Lord that the amendments were tabled rather at the eleventh hour—but on some other occasion when we have the opportunity of going into the reform of the Immigration Act in a more comprehensive manner.
I do not think one can necessarily state that all the cases are dubious when the Secretary of State himself grants temporary admission to so many individuals with whom we are concerned on the basis of representations of Members of either House. There may well be merit in allowing somebody who has been refused leave to enter, or is alleged to be an illegal entrant, to be released while further consideration is given to his case. The noble Lord is well aware—it is remarkable—how carefully the Home Office always considers such representations as are made, but that is not the same from the individual's point of view as having a case tested in a court of law or a tribunal, such as the adjudicator.
Lord Elton: My Lords, the noble Lord refers to a point which I did not pick up from his earlier speech when he referred to the particular case of Mr. Butt, which is relevant to what he is saying. He could, of course, always apply for habeas corpus and by that means the basis of his detention could be tested; so there is a form of access to the courts.
Lord Avebury: My Lords, there may be a form of access but it is useless in this particular case because the provisions of Section 13(5) of the Immigration Act give the Secretary of State enormous powers over anybody against whom an exclusion order is signed, as the noble Lord is aware, and the merits of the case would not be tested in a court because where security matters are concerned the Secretary of State would not be obliged to state any other reasons apart from the fact that he had signed the certificate. I am afraid, therefore, that the remedy that the noble Lord proposes
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in the case of Mr. Butt is not one that would be very useful, and he may find that we have to adopt other means of securing Mr. Butt's liberty in the near future.
I do not wish to be drawn down that avenue because there are many other cases which are equally meritorious and which I believe would benefit from testing before the adjudicator or the tribunal. Although the Minister says that it would be wrong for them to have the benefit of the presumption which applies in the Bail Act, the noble Lord is aware that the courts have to be satisfied that the person who is applying for bail will in fact respond to it; and the same would apply if the immigrant were to go to the adjudicator or the tribunal. They would have to satisfy themselves, as the court does, that the immigrant would be likely to report when the time came; so there would not be the risk that the noble Lord alleges of a large additional number of absconders.
Nor, I believe, is the argument about the occupation of the time of the adjudicators with the number of applications for bail a valid one, because, of course, most of these cases now have to be dealt with by the Secretary of State, and the Minister responsible for these matters, Mr. Timothy Raison, has complained of the burden which he has to bear of 1,200 letters a month flowing through his office on which he occupies himself, he says, for two to three hours every day; and if your Lordships do the arithmetic you will find that he spends something like three minutes on each of the cases. If we could eliminate at least a part of that load by taking these cases to the adjudicator or the tribunal, I believe that Mr. Raison would be very thankful to your Lordships; but I accept that we are not likely to make any progress on those lines at this late stage of the Bill. With thanks to the noble Lord for the explanation he has given us, which will assist us when we come back to the charge, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 86C not moved.]
12.12 p.m.
Lord Elton Lord Elton moved Amendment No. 87:
Before Clause 56, insert the following new clause:
("Immigration offenders.
.—(1) The following subsection shall be inserted after subsection (1) of section 24 of the Immigration Act 1971 (illegal entry and similar offences)—
"(1A) A person commits an offence under subsection (1)(b)(i) above on the day when he first knows that the time limited by his leave has expired and continues to commit it throughout any period during which he is in the United Kingdom thereafter.".
(2) In subsection (3) of that section (the effect of which is that persons who have committed certain offences under subsection (1) may be dealt with outside the normal time limits) the reference to subsection (1)(b)(i) shall be omitted.
(3) The amendments made by subsections (1) and (2) above shall not have effect in relation to a person whose leave expired before the commencement of this section.").
The noble Lord said: My Lords, I gave notice during the Committee stage of the Bill of this new clause, which is concerned with the offence of overstaying under Section 24(1)(b)(i) of the Immigration Act 1971. That section provides that a person commits an offence under the Act if, having only a limited leave to enter or remain in the United Kingdom, he knowingly remains beyond the time limited by the leave.
Before the Divisional Court's decision in 1973 in the case of Gurdev Singh, it was questionable whether the offence was a continuing one. It was arguable that the concept of remaining implied that it was. However, it was firmly decided in that case that overstaying under this section was not a continuing offence. This was in contrast to the position under the Commonwealth Immigrants Act 1962, where it was expressly stated that overstaying was a continuing offence. The court was largely reinforced in its view by the fact that Section 24(3) of the 1971 Act, read in conjunction with Section 28, provides an extended time limit for prosecution of overstayers of up to three years, after which any prosecution would be out of time.
The Divisional Court ruling in Gurdev Singh did not greatly inhibit the police in the successful prosecution of overstayers, provided the prosecution was brought within the three years' extended time limit, although it did increase the administrative burden of effectively enforcing the immigration control. The recent judgment given in your Lordships' House on 22nd April in the case of Grant v. Borg has, however, completely altered the position. It was then ruled that the offence of knowingly overstaying under Section 24(1)(b)(i) can be committed on the day after a person's leave to enter or remain expires, and on only that day. This judgment has seriously reduced the ability of the police to prosecute overstayers, because in many cases it will be difficult, if not impossible, to prove that a person did knowingly overstay on one day and one day only.
A particular difficulty arises where a person has an appeal pending against a decision to refuse him further leave to remain. He is not required to leave the country until his appeal has been determined, by which time his current leave may have long since expired. If he loses his appeal and fails to leave, the police will clearly find it very difficult to prosecute him.
The purpose of the amendment as set out in subsection (1) of the new clause is to ensure that the precise date on which a period of overstaying is commenced is no longer of crucial significance in prosecuting the offence, and it does so by providing, first, that the offence is committed when the person concerned becomes aware that his leave has expired, and, secondly, that thereafter (as in the 1962 Act) the offence is a continuing one. If this amendment is accepted, the Government see no need to retain the extended time limit for the prosecution of overstayers contained in Section 24(3) of the 1971 Act, and subsection (2) of the new clause therefore disapplies the provisions of Section 24(3) so far as overstayers are concerned.
Subsection (3) of the new clause provides that a person whose leave expires prior to the coming into force of the provisions of this amendment shall not be liable to prosecution under the new provisions. The amendment to Schedule 15 is complementary to subsection (2) of the new clause, and serves the same purpose.
I regret bringing this amendment to your Lordships later than I should have liked, but I have to tell your Lordships that the judgment in the case of Grant v. Borg was given only on 22nd April, and it takes a little time to study the implications and effects of such decisions, to consult with those affected by them and to draft and test the possible remedies. I hope,
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therefore, that the notice of my intentions that I was able to give to your Lordships at the Committee stage, by which time we were confident that we could have amendments ready for use, will have been of some assistance to your Lordships in what I realise is a difficult task. I beg to move.
Lord Elystan-Morgan: My Lords, may I invite your Lordships to consider a matter as a preliminary point before my noble and learned friend Lord Elwyn-Jones comes to deal with the merit of this amendment? I well appreciate what the noble Lord the Minister says as to the sudden change in the law that occurred in the decision of Grant v. Borg some three months ago. While having every sympathy with the Minister in his desire to put the matter upon the basis that was assumed to be the case previous to 22nd April, for my part—and I say this with great humility—I cannot see that such an amendment can fit within the four corners of the Long Title of the Bill.
I am sorry that notice has not been given to the noble Lord the Minister of this matter—it was in fact something which occurred to us on this Bench as the Minister was moving the amendment—but I understand from certain quarters that this is a matter which has been considered by the Minister's department. It does not seem to me that any of the matters described in the Long Title to the Bill can cover this. The first matter described there is:
"An Act to make further provision as to the powers of courts with regard to the sentencing and treatment of offenders".
This amendment is not a matter of power; it is a matter of changing the substantive law.
The only other matter which could conceivably be prayed in aid, presumably, is the very last provision,
"and for connected purposes".
Surely it is well established that where, after a long paragraph of objects that have been declared, such words follow, they are governed by the ejusdem generis rule. In the circumstances, I cannot see that any of the provisions set out there could accommodate the change which the Minister seeks to bring about.
Lord Elton: My Lords, I accept the apology of the noble Lord for not giving me notice of this difficult question, and, of course, his position was difficult because he had only (whatever it is) 10 days' notice that an amendment such as this was coming down, and it was published, I think, only a few days ago. However, the Government are particularly alert to questions of relevance in respect of this Bill, and have taken considerable care over such matters. I am advised that this amendment is relevant to the Bill because it deals with the problem of when proceedings can be brought against a person for the offence of overstaying under Section 24(1)(b)(i) of the Immigration Act 1971. It is, therefore, in essence, a procedural matter, and, so I am advised, it is relevant to the Bill.
Lord Elwyn-Jones: My Lords, perhaps in view of that positive statement from the Minister, I will not take that matter any further at this stage, but we shall have to give further thought to it because this important clause, with important implications, presented at the Report stage creates difficulties, and we shall have to give further thought to that preliminary issue. For

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the moment I do not wish to add anything further. As far as the merits of Amendment No. 87 are concerned, a three-months period of gestation, in our view, should have produced a better draft and a better situation. I have had communications from the Joint Council for the Welfare of Immigrants expressing their deep concern about this amendment. The matters which I invite the Minister to consider are, first, that the provisions of Clause 87 are unnecessary. There are ample administrative powers in the Immigration Act enabling the Home Secretary or his officials to detain and deport overstayers and there is no need for further criminal provision in regard to a situation which can be dealt with administratively.
If we are going to consider the provisions of criminal justice in regard to immigrants, I should have thought that the very uncertainty of the law relating to immigration would be a more satisfactory field for further investigation and change. There is a great deal of uncertainty about the law and its application, the extent to which the value of habeas corpus has been diminished by administrative actions in this field; and what I fear will be the result of this innovation, this provision, will be exacerbation of the position affecting immigrants and an increase in the unease which, I understand, now prevails.
One of the features of this new provision is that it will create a summary offence with no time limit for the taking of proceedings and, indeed, it goes in its language so far that during the period awaiting trial the alleged offender could be accumulating his offence. This is a preliminary consideration of this matter which, I confess, I have had very little opportunity of examining in depth myself but at this stage I want to raise these matters for the views of the Minister because this is, I fear, undoubtedly a matter which we shall have to consider further at the next stage of the Bill.
12.21 p.m.
Lord Avebury: My Lords, there is an unseemly contrast between the Government's approach to an amendment where our violation of the obligations that we have under the European Convention on Human Rights arose, where it was said that nothing could be done during the course of this Bill because of the extensive consultations which had to be entered into, and this problem where a minor question relating to the way we handle the matter of overstayers is of such urgency that it has to be brought before your Lordships at very short notice and rushed through the House without any consultations whatsoever and particularly with those organisations that represent ethnic minorities in this country. Even in the short time which they have had to scrutinise the amendments, they have already expressed grave alarm, as the noble and learned Lord has said, and, I believe, with good reason, because this is yet another instance of the way that the Tory Government is determined to hound the last over-stayer, illegal entrant and person in breach of any provision of the immigration laws with such high priority that measures to tackle it must be brought immediately before the House the minute any breach is disclosed.
The noble Lord the Minister said that 24(1)(b)(i) makes it an offence for a person having only a limited leave to remain in the United Kingdom knowingly to
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remain beyond the time limited by this leave. In the case of Grant v. Borg, which the noble Lord mentioned, the court decided that the offence could only be committed on the day after the leave expires. The position was that Mr. Borg, a non-patrial citizen of Malta, entered the United Kingdom on November 8th 1975 and was given leave to remain until the following May 8th. Then before that leave had expired on April 22nd he applied for an extension without restriction on employment. The Home Office took until the following January 17th to turn the application down and on January 31st the applicant called at Lunar House to ask for revocation of conditions on the grounds of his marriage to a woman with the right of abode.
That was refused by letter of the Home Office dated April 18th. On May 26th 1979, information was laid against Mr. Borg that he knowingly overstayed between April 19th and May 24th. To cut a long story short, your Lordships acting in a judicial capacity held that the offence could only be committed on the day after the limited leave to remain expired and if the immigrant remained in ignorance of some fact constituting a necessary element in the offence, his discovery of the fact later on would not make him guilty of the offence on the date of discovery.
It was an unsatisfactory feature of the law before this case that a person started to commit the offence when he knew that his leave to remain had expired. Thus, if he had appealed against refusal of variation of leave—for example, take the case of a student applying for a extension of his stay and having been refused—the adjudicator would send the decision in writing and as soon as the appellant opened the letter he would become liable to prosecution because at that point he was aware that he was committing an offence. At best, he might have had I suppose—I am not quite sure of the state of the law on this matter—until the end of the day on which the letter was received. Thus, if he was out when the post arrived and discovered the adjudicator's letter on his doormat only half an hour before midnight, he would have just 30 minutes to pack up his belongings, to sell his house, to withdraw his children from their schools, to book passages and to leave the country, because, at the stroke of midnight, he would have begun to commit the offence.
As matters stand, in the absence of this amendment, a person who reaches the end of his stay without applying for an extension does commit the 24(1)(b)(i) offence because he knows when he has reached the end of his stay; but the person whose application for extension has been turned down by the adjudicator and notified to him by post only commits the offence if the decision reaches him on the same day. The leave to remain expires on the day of the adjudicator's decision, but, if the immigrant does not know about it until the following day, then he commits no offence.
I should like to propose an alternative solution to this problem. It stems from the existence of two parallel systems of dealing with overstayers. Either the overstayer can be prosecuted under 24(1)(b)(i) —I hope the Minister is listening to me and perhaps he could pay attention instead of talking to the Chief Whip. I am talking about two parallel systems of control of overstayers which exist in our law and I am saying that either the person can be prosecuted

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under Section 24(1)(b)(i) or he can be removed under Section 3(5)(a). I want to ask why we need to have two systems because the person has no right of appeal on the merits of the case where it is dealt with before the courts. I think this is an important matter which the noble Lord the Minister should take into consideration in his answer.
If a person is found guilty by the courts of overstaying and if he is recommended for deportation, he can of course make representations to the Secretary of State; but, almost without exception, the Secretary of State will uphold the decision. The courts may think that they are leaving it to the Secretary of State to take into account any compassionate factors which there may be, but the Secretary of State obviously considers that these must be of an overwhelming character before he can overturn the recommendations of the court.
If on the other hand a decision is made to remove the person under Section 3(5)(a), then he has a right of appeal to an adjudicator. This enables him to deploy arguments about, for example, his length of residence in the United Kingdom, and the strength of his ties of a family nature or otherwise, and it is surely preferable to have these considerations tested before an impartial public tribunal than in secret before the very functionary whose decision is being questioned.
Therefore, the proper way to approach this matter, following the decision in Grant v. Borg, would have been to repeal Section 24(1)(b)(i) altogether and that would have left a single method of dealing with over-stayers which is manifestly fairer and more commensurate with the abuse of the immigration system which it seeks to remedy. We are not dealing with a bunch of hardened criminals. If I may give an example, take Miss P. To enable the Home Office to identify her the number is 255984. She was a student from Ghana. She asked her High Commission to help her apply for an extension. They slipped up and failed to lodge the application in time so Miss P. became an over-stayer and indeed the police called round twice to inquire after her.
I had to approach the Minister's office to call the police off while he was considering my representations. The Minister was satisfied in the end that Miss P. was a genuine student and he allowed her to remain. Miss P., of course, could have been prosecuted and, if the Government get this amendment, somebody in her position in future would continue to commit the offence throughout the whole of the period during which representations were being made on her behalf.
Take Mr. L. That is No. 146322. He was a long-term overstayer who had lost his home in Cyprus because of the Turkish invasion. He married a British girl in 1981, which was 10 years after he first arrived in this country, and he was allowed to stay on the basis of his marriage.
Then there is the case of Mr. T. That is No. 122366. That was a particularly interesting case because the Minister, Mr. Raison, said to me in a letter:
"…it is our understanding that an overstayer can only be prosecuted a second time if he has committed a further, and entirely separate, overstaying offence".
Mr. T., who was a citizen of Sierra Leone, was convicted
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of overstaying, at High Wycombe Magistrates' Court on 31st August 1971. Just before that, on 20th July, he married a patrial woman. On 14th December 1978, the Home Office sent Mr. T. a form, IMM157, threatening him with prosecution again. If this amendment is passed, Mr. Raison's statement will have to be modified or rescinded because it would be quite possible in the circumstances that I have described for Mr. T. to have been charged again and to have been convicted and fined up to £200, whereas in fact on my representation Mr. Raison granted him indefinite leave to remain.
Finally, a case that was reported, so I can give the name, that of Mr. and Mrs. H. Uppal, citizens of India, whose little boy, Jatinder, had severe disabilities which were remediable by surgery. Mr. and Mrs. Uppal's case went to the European Commission for Human Rights and was declared admissible. The execution of a deportation order against them was suspended. In the end, they were allowed by the Secretary of State, to stay on the basis of compassionate circumstances.
What these people have in common is that they were overstayers and yet still the Minister, Mr. Timothy Raison, who is very humanitarian and gives very careful consideration to representations, finally decided that their cases were meritorious. All I would ask is that others should have the right to deploy arguments on their own behalf such as in these incidents were deployed by someone else for them before the Minister, as best they can before an impartial tribunal as to why they should be permitted to stay in this country even though they may have been in breach of the Immigration Act. Instead of having to take every single case before the Minister—and I repeat what I said in the last debate, that he has an enormous number of cases to consider—they should be heard before a tribunal which I underline Parliament has constituted for this very purpose.
So I hope that the Minister will not seek to press this amendment but will take it away and give it further thought in the light of the considerations that I have now advanced.
Lord Renton: My Lords, a great deal of what the noble Lord, Lord Avebury, has said with great sincerity Roes far beyond the scope of this amendment. One must bear in mind that the people of this country expect our Government and Parliament to maintain an effective control over illegal entry. This amendment, which is of a somewhat technical kind—although I agree it has practical implications for those concerned—is a way of enabling the people who attempt to enter illegally to be dealt with on the basis of the continuing offence.
This is not an isolated example of continuing offences being dealt with by the courts. There are other examples which will occur to noble Lords, but I do not wish to elaborate upon them at this stage of this short debate. My noble friend Lord Elton has my full support in what he said regarding this amendment.
Lord Avebury My Lords, before the noble Lord sits down, will he think again about what he has just said because his whole speech was misconceived? This amendment is not about illegal entrants but overstayers.
Lord Renton: My Lords, with great respect to the noble Lord, it applies equally to those people who have entered illegally and find some reason for remaining here. Then it is pointed out to them that they have no right to be here and then they overstay. If I have misconceived the matter, then of course I apologise. But it seems to me that a great deal of what the noble Lord said was beyond the scope of this amendment and that the comment which I made was a perfectly valid one.
Lord Avebury: My Lords, if the noble Lord will look at Section 24(1)(b)(i) he will see that it is about persons who have only a limited leave to enter or remain in the United Kingdom. Therefore, they were legally in the United Kingdom prior to the commission of this offence. They were not illegal entrants, as he said.
Lord Mishcon: My Lords, I wonder whether it would not be the view of the House, and hopefully of the Minister, that by virtue of the fact that there are strong feelings first about the whole relevance of this amendment to this present Bill, and secondly about the merits of this clause, which obviosuly ought to be debated in an entirely different atmosphere from this Bill, it would be appropriate to withdraw this amendment.
Lord Denham: My Lords, if I may come in here, I think that it is very important that the relevance of this matter should be settled beyond any doubt of anybody in this House. Under those circumstances, perhaps the suggestion of the noble Lord, Lord Mishcon, is the right one. The only proviso I would put in is that this is already Report stage. If this important—and I think rather controversial—amendment was introduced at Third Reading, it would then be fairly late in the proceedings. If the House were prepared to accept that course as being the lesser of two evils, I would certainly advise my noble friend to withdraw the amendment at this stage, settle the problem of relevance, and come back to the merits at Third Reading.
Lord Elwyn-Jones: My Lords, I think that is a sensible course. We face this question—if I may speak for myself—with inadequate preparation. The course that is proposed by the Chief Whip would certainly not create a proper ground of any Motion to seek to withdraw at the Third Reading stage. I will endeavour to see that we behave responsibly and of course honourably in regard to that situation. I think that that is the best practical solution at this stage.
Lord Elton: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 11 [Provision of premises for young offenders etc.]
12.40 p.m.
Lord Elton Lord Elton moved Amendment No. 87A:
Page 94, line 38, leave out from ("2") to end of line 42 and insert ("(3) of that Act (probation orders) for the words "and 4" there shall be substituted the words ",4A and 4B".").
The noble Lord said: My Lords, I beg to move this amendment, and it would perhaps be for your Lord-ships' convenience if I also speak to Amendment No. 121A. These amendments simplify the drafting of Section 2(6) of the Powers of Criminal Courts Act 1973, which requires courts, when making probation orders, to explain to the probationer the effect of the order and any requirements attached to it. These are purely drafting amendments; they do not affect the important principle that courts should explain to the probationer the obligations which he will be undertaking. I beg to move.
On Question, amendment agreed to.
Lord Mishcon Lord Mishcon: moved Amendment No. 88:
Page 95, line I, leave out ("sections") and insert ("section").
The noble Lord said: My Lords, with the permission of the House, may I deal in one speech with Nos. 88, 89 and 90? At Committee stage, Schedule 11 was introduced into this Bill and various thoughts have been expressed by probation officers and others in regard to that measure. Really, the purpose of these amendments is to give expression to certain thoughts rather than to take the view of the House at this stage on the provisions in Schedule 11, as it is now in the Bill. We thought it more convenient to re-draw a clause rather than to move a series of amendments and make separate speeches on them; so I wonder, therefore, whether your Lordships would agree with me that the convenient way of dealing with the matter from my point of view is to go through the various subparagraphs of this amendment—very briefly, I promise your Lordships—in order to make the point that I believe each subparagraph has got.
If your Lordships will turn to Section 4B(1) of the amendment—this has relevance also to subsections (5), (6) and (7)—may I remind your Lordships that there are at present some 80 day centres which are run by the probation service, but only a few of those deal with conditions of attendance. The main business of these centres is to deal with those who go there perfectly voluntarily and not by virtue of any condition. These day centres have a very useful function in the preventive approach which all of us are anxious to strengthen in regard to crime. They operate best through this voluntary idea, and the anxiety has been expressed that this change in the law in Schedule 7 should not in any way prejudice the continuance of the usefulness of those centres. Indeed, they are part of a wider tradition of day centre provision in the personal social services.
Here I am referring obviously to the mentally ill, the handicapped, the elderly and the disabled, and for those the term "day centre" is the appropriate description. Centres involving conditions of attendance have had a distinct title "day training centres"; and the thought expressed in subsection (1) is that this is a little confusing, to say the least, and that where you have conditions operating our suggestion would be that the title "probation centre" should be there in order to distinguish between the two types of facility.
I turn now to Section 4B (2)(a). The day training centres were established in 1972 to 1973 by way of an experimental alternative to custody. It is considered,

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certainly so I understand, by probation officers, that these centres have established a very acceptable standard of practice and have largely succeeded in taking people who would otherwise have gone to prison. The concern that has been expressed to us over the Government's proposal is that this feature may be lost in the arrangements now suggested and that conditions of day centre attendance may be imposed on those who would otherwise simply have been placed on probation. That is why we have introduced into this amendment, (2)(a), which makes it very clear that the courts will be postitively encouraged to use this measure as an alternative to custody.
Turning now to (2)(b), the main purpose is to make sure—1 am not sure myself whether this is so—that day centre attendance is recognised sometimes to be appropriate in combination with out-patient treatment as distinct from in-patient treatment. Therefore (2)(b) makes it clear that this would be limited to those who are receiving in-patient treatment. That is the purpose of that subsection.
Turning now to (3)(a), as your Lordships will see, we suggest here a shorter period of compulsory attendance than 60 days. The 240 hours proposed would permit 8 weeks' attendance as a maximum, and it is thought that within that period one could very clearly see whether the whole idea of day centre attendance for the person concerned was proving useful and constructive. Obviously, where a longer period of attendance could be found to be useful it could be used as a second phase, on a mutually agreed basis. To explain why this is better expressed in hours then in days, may I point out that it allows greater flexibility in making arrangements, particularly for those who are in work. The further limits of six hours a day and five days a week are safeguards also against an unreasonable and excessive intrusion into normal life.
Your Lordships will remember that the nobl Minister indicated to the House that this new measure should not introduce a custodial element. Obviously, we are all concerned—certainly the probation officers are concerned—that these conditions should be consistent with the principles outlined in the judgment we have heard so much of; that is, Cullen v. Rogers, which dealt with custodial elements. There has been an example of a centre which develops an emphasis on containment and control which amounted to a semi-custodial environment, and it is felt that the limits suggested in this paragraph would help to maintain a proper emphasis on constructive purpose rather than containment.
Perhaps I may now turn to subsection (6), and again this is relevant to the Cullen v, Rogers judgment, and apart from that, is in line with the good practice established by the day training centres. It is thought that there must be a very serious measure of care taken over the establishment of these centres. Where a court orders someone to attend a facility, it is obviously important that the place has a suitable standard, and the Government propose extending conditions to centres which will not be run by the probation service. We think that attendance at such places should be arranged on a voluntary basis, and that conditions should affect only centres administered by the probation service. But to maintain a degree of uniformity and a
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collective definition of standards, the approval of the Secretary of State should surely be maintained, as it was for day training centres. In case the question of expense comes into this, one would have thought that all that was necessary was a laying down of basic conditions which, if met, led to approval. Therefore, this need not be an expensive or excessively intrusive measure.
Lastly, I turn to subsection (7), and it is thought that this addition to the Government's provision is of crucial importance. Again, it gives effect to the judgment in Cullen v. Rogers and, indeed, to the noble Lord's statements about the Government's intentions, to which I referred a moment ago. Without any doubt at all, it would help to clarify in the mind of anybody the aims of probation centres, and it is our belief that these should be essentially similar to the aims of probation, with an emphasis on constructive activity and training. This would be a safeguard against a tendency to use the probation order as a vehicle for imposing a semi-custodial sentence.
I hope that I have given fairly clearly the reasons for each one of these subsections. I repeat that we were faced at Committee stage with Schedule 11. We obviously want to know whether we have added constructively to the Government's thinking on this matter and, from that point of view, I regard this as a probing amendment. If there are factors that we have advanced which commend themselves to the House, I am sure that the Minister will feel that the moving of this amendment will not have been in vain. My Lords, I beg to move.
12.53 p.m.
Lord Elton: My Lords, as your Lordships will have learned from the, as always, lucid explanation of the noble Lord, Lord Mishcon, the effect would be to delete the new Section 4A of the Powers of Criminal Courts Act 1973, which is inserted by Schedule 11 with which the noble Lord was wrestling at the Committee stage. This new section deals with the powers of courts to include requirements in probation orders. It was among the provisions which I introduced as an amendment during the Committee stage, and these innovations were made in response to the judgment of this House, in its judicial capacity, in the case of Cullen v. Rogers, to which the noble Lord has alluded.
The House will recall that the judgment concentrated on requirements to attend day centres. However, it also put into doubt the validity of several other types of requirements which the courts had been accustomed to make. The new Section 4A of the 1973 Act is designed to give courts the power to make these requirements which it was previously assumed they did have. The section is couched in general terms, and it may help the House if I explain what exactly the clause enables the courts to do, in the same way as the noble Lord has admirably elucidated the case for his amendment.
First, it empowers courts to require probationers to attend a place specified in the order for up to 60 days. What we have in mind here are not day centres geared specifically to the needs of offenders; those are covered in the new Section 4B. Section 4A is concerned with other places which can also be very helpful to probationers if they go to them. The sort of thing we have

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in mind is centres for alcoholics and drug addicts or, indeed, colleges providing courses in basic numeracy or literacy. Such places can be very beneficial to some of the more socially inadequate offenders who come before the courts.
Probationers may, of course, be encouraged by their probation officers to attend voluntarily, but it is widely thought that a short initial period of required attendance will often be helpful. I know that the National Association of Probation Officers suggest that attendance at these places should always be entirely voluntary, and I wonder whether we could, therefore, consider for a moment the context in which the requirement will operate.
The sort of people we are talking about will very often be thoroughly at odds with the whole of society and deeply suspicious of almost any form of institution; they will expect the worst of it. It requires considerable persuasion to get them even to consider making use of one briefly. That suspicion can be reduced if they can be persuaded at least to sample the wares, and the persuasion which is very necessary to the welfare of the person concerned is best given while the terms of the order are being agreed with him and the parties to it. The presence of the requirement in the order, which, I repeat, he has himself agreed, will stiffen his resolve to make the experiment and thereafter, if all goes well, having had his resolve stiffened by the requirement in the order to make an experiment, he will continue his attendance without even the need for the requirement itself to continue. This provision, therefore, is intended to give the probation service the scope to work in the community with the type of inadequate offender who sometimes ends up in a custodial institution for want of a more appropriate disposal.
Secondly, the new section enables courts to require probationers to participate for up to 60 days in activities specified in the order. This provision is aimed at the schemes of group activities which are now being developed in some probation areas. These schemes can best be described as the adult equivalent of intermediate treatment. They are dealt with separately, because they do not always take place in one location. The nature of the activities is very varied; some involve training in social skills and group counselling, while others include physical activitity. These schemes are usually aimed at offenders in the 17- to 21-year old age group, with long and serious criminal histories. The aim is to provide a constructive but demanding programme for probationers who would otherwise have been at serious risk of a custodial penalty.
Probationers have rights, and we recognise these. These powers are, therefore, balanced by safeguards to protect them. In accordance with the fundamental principle of the probation order, a court will not be able to make any of the requirements that I have described without the consent of the probationer. There is a genuine element of voluntariness running throughout the whole of the order. These new provisions, therefore, preserve intact the traditional contractual basis of the probation order—not only that; before making any of these requirements the court will also be obliged to consult a probation officer.
In practice, courts will usually fulfil this requirement by considering a social inquiry report. In this, the
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probation officer will have suggested a package of requirements geared to the offender's particular needs. The officer will already have carefully explained the nature of the proposed requirements to the offender. The offender will, therefore, have agreed to the requirements in full knowledge of the obligations which they entail. Finally, the consent of any third party involved must also be obtained.
The new section also gives courts express powers to make negative requirements; that is, requirements to refrain from participating in specific activities. They have nothing whatever to do with a night restriction order. They are aimed at particular activities: drinking in a certain pub, going to specific football matches and so on. There is nothing new in such requirements. The courts have been making them for the last 75 years or so. They have been making them under provisions which, until 10 weeks ago, were seen to be perfectly adequate for the purpose. The case of Cullen v. Rogers put them in doubt. Although they have been used on a decreasing scale of late, nonetheless we think that this is very well established practice—75 years is a long time—and that it should not stand at risk now as a result of that judgment.
The aim of the probation order is to prevent the probationer from re-offending. This involves offering counselling and support to help him overcome his problems, but in exceptional cases it can also mean trying to prevent him from putting himself into situations where he is at special risk of committing an offence. In those circumstances, a court might feel that it can help towards this end by making an appropriate negative requirement—as many of your Lordships have done, no doubt, within the family. In a difficult case, the possibility of making such a requirement might be the only factor which persuades the court not to pass a custodial sentence. That is worth bearing in mind.
Courts will only be able to make negative requirements with the consent of the probationer and after consulting a probation officer. These are important safeguards which should prevent the imposition of unenforceable or impractical requirements. We should also remember that if it subsequently turns out that a court has made a requirement which, for some good reason, the probationer cannot fulfil, then application may be made either by the probation officer or by the probationer for the requirement to be cancelled. Of course, the probation officer cannot personally ensure that the probationer observes every requirement. It is not his job to police his client's every movement. His responsibility is to explain to the probationer what the requirement means, why the court thought it necessary to make it and why it is important that it should be obeyed. If, however, it is discovered that the probationer has not observed the requirement, there is no question but that he can be brought back before the court.
The purpose of the new Section 4A—I am drawing to a conclusion, but the noble Lord asked me to think constructively and I am trying to put before your Lordships the thinking behind this clause—is to put the interesting and important developments which are being made with the probation order on an indisputable statutory basis and to put existing practices on an unquestioned footing. These developments are firmly

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rooted in the best traditions of probation. Their aim is to eliminate or to reduce the chances of the probationer re-offending by tackling at the root the problems which led him into criminal activity. The only difference is that the probation service is now using new methods for supervising inadequate and difficult offenders for whom it used to be thought that custody was the only answer.
This is important work. I can well understand that not all probation officers will wish to recommend requirements of this kind to the courts. They have professional views which incline them to work with offenders in other ways and they are well entitled to them. But new Section 4A does not compel anyone. It only permits certain developments. One of the great attractions of the probation service is the flexible way in which it can respond to the needs of clients. I am sure that in the future there will be probation officers who prefer to relate to offenders in ways quite different from those set down in this part of the Bill, but there are others who will wish to take advantage of the provision in the new section so as to expand their method of work. Sentencers will doubtless react in similar ways, and that is all to the good. What we are seeking to achieve is to open up new possibilities, to encourage greater flexibility. We have that opportunity in this Bill. I hope your Lordships will not miss the opportunity of leaving it in the Bill, when considering the noble Lord's amendment, which he has been kind enough to say is in search of a statement of the Government's views. I hope I have given it at sufficient length to satisfy him.
Lord Renton: My Lords, I listened with great interest to the noble Lord, Lord Mishcon. He is so persuasive that he tempts one to agree with him, sometimes against one's experience and better judgment. In the now fairly distant past I had quite a lot of minor judicial experience as a recorder relief judge at the Old Bailey which, as the noble and learned Lord, Lord Gardiner, will remember, was a rather doubtful proposition and had to be brought to an end. In those days I took many chances by making probation orders rather than giving custodial sentences, and for the most part the experiments worked extremely well. There was always the opportunity of a custodial sentence if the probation order did not work. However, one was deeply conscious that if the probation order was to work there should be complete personal confidence between the probation officer and the person in his care, and that "Swords of Damocles" were to be avoided, if possible. Also, one realised, as my noble friend Lord Elton said, that one had to permit the greatest flexibility. Although one had power to attach various conditions to probation orders, those powers were used with some hesitation. A great deal of experience has been gained in recent years and alternatives to custodial sentences are now the thing, thanks to the previous Conservative Government and the Bill of, I think, 1972.
I find a danger in getting probation orders too much mixed up with the work of day centres or their equivalent. When the noble Lord, Lord Mishcon, so attractively made his case, he dealt mainly with his Amendment No. 90 which would give an alternative—
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and a very imaginative and useful alternative, although not varying greatly from what the Government have set out on page 96 in their new Clause 4B—probation orders requiring attendance at day centre. Having listened to my noble friend Lord Elton, I do not think that there is very much difference between him and the noble Lord, Lord Mishcon, on that part of the case. However, in addressing your Lordships, the noble Lord, Lord Mishcon, scarcely developed his theme that we should leave out lines 3 to 46 on page 95. If we were to leave out the new Clause 4A, we should be missing great opportunities which have been elaborated by my noble friend Lord Elton.
Therefore, regarding the two amendments of the noble Lord as a package, which they obviously are, and although I was very tempted by him, I feel, having heard my noble friend Lord Elton, that we must retain the flexibility of the practices of probation officers while at the same time making cautious use of the new opportunities which have developed in recent years with regard to day centres, but that we should not try to tie probation too closely to the day centre concept. Therefore I support the Government.
Lord Mishcon: My Lords, I wonder whether the House would permit me for one minute to address it a second time. I am most grateful to the noble Lord, Lord Renton, for his gracious remarks, which I do not deserve. Nobody is able to change Lord Renton's mind unless he wants to change it. He has very much a mind of his own and we all appreciate it. I rise only to point out to the noble Lord the Minister that, with his usual courtesy, he addressed himself to the clause in general but on this occasion did not answer the particular points—for example, hours as against days, which one would have thought was useful, the mental health matter which I mentioned and whether or not one should have the ability to require a person to be an out-patient as against an in-patient, and the nomenclature which I suggested of probation centres. It may be that the noble Lord thought it inappropriate to deal with these matters on this occasion. I want only to remind him that he did not deal with them and that, as I said, this is a probing amendment.
Lord Elton: My Lords, I do not want to trespass on the patience of your Lordships, which has not been tested by the noble Lord, Lord Mishcon, because he has every right to speak twice when he is moving his own amendment, but I fear that I fell into the trap of forgetting that the noble Lord was telescoping what he had to say to cover both amendments.
I feel that I might be testing the patience of the House if I was allowed to make the second, not terribly short, speech that I have in hand for the second amendment. If the noble Lord would be satisfied with a letter embodying in perhaps a more grammatical frame what it is that I have in my folder, and if that would not tantalise the rest of your Lordships too much, I should be happy to deal with it in that way.
Lord Mishcon: My Lords, may I say at once that, obviously, that is a sensible course to adopt. I am sure that the House will not impatient with me or my noble friends if by virtue of something in that letter we felt it necessary to raise a further amendment at a later stage
Amendment, by leave, withdrawn.
[Amendments Nos. 89 and 90 not moved.]
1.11 p.m.
Lord Elton Lord Elton moved Amendment No. 91:
Page 96, leave out lines 14 to 17.
The noble Lord said: My Lords, in Committee we were asked by the noble Baroness, Lady Birk, why the Government amendment, which enables courts to require a probationer to attend a day centre precluded such a requirement being made in respect of probationers required to undergo treatment for a mental condition. We have since reconsidered our policy and we accept that there will be cases in which it would be reasonable to require a probationer to attend a day centre whilst undergoing, as an outpatient, treatment for a mental condition. We were persuaded to this view because a court, before making a requirement to undergo treatment for a mental condition under Section 3 of the Powers of the Criminal Courts Act 1973, is required to consult a duly qualified medical practitioner who would be expected to advise the court of any incompatibility, in a particular case, between treatment and attending a day centre. There is also the further safeguard that if a probationer receiving treatment did prove to be disruptive when attending a day centre, the supervising probation officer could apply to the court for the requirement to attend to be cancelled. I hope that this change in direction which the noble Baroness, Lady Birk, wanted will be welcomed. I beg to move.
On Question amednment agreed to.
Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 92:
Page 98, line 4, at end insert ("provided that sufficient extra resources are made available.").
The noble and learned Lord said: My Lords, the purpose of this amendment is to stress the importance which we attach to an increase in the resources of the probation service. The Bill lays very many extra duties on the probation service—for instance, it empowers the service to set up intermediate treatment schemes; introduces community service orders for 16 year-olds; and makes social inquiry reports mandatory before a custodial sentence is imposed on a young offender or someone who has not received a previous custodial sentence. These extra duties are on top of the sharp increase over the past two years in the use of probation orders and community service orders.
The noble Lord the Minister may be a little impatient with me for stressing this point as some of the amendments which we have unsuccessfully put down during the course of this Bill would undoubtedly have added to the burdens of the probation service. Indeed, I believe this was one of the grounds on which there was some concern on the Government side. While making no apology for having potentially added to the problem which worries us, there is already a serious situation with the problem of the provision of resources.
The anxiety which concerns us is that the Government's provision for the growth of probation service resources this year is 3 per cent. in real terms but only 1 per cent. next year. I am advised that many drobation areas will not even get that increase because it is dependent upon their local authority contributing
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20 per cent. of the increase to match the 80 per cent. contribution from central Government. At a time of cutbacks, some local authorities are either unwilling or unable to do this. Some probation areas—I understand that this is particularly true of the West Midlands Probation Service—are having no growth at all this year. Therefore we think it is vital to urge upon the Government the need for substantial growth in probation service resources in order to meet the requirements of the Bill.
This is a necessity that runs parallel to the urgent importance of reducing the size of the prison population. On all sides of the House, the high expense of prison detention compared with the modest economy of expenditure in the probation service is certainly something that commends itself to us. I hope therefore that we may have some reassuring reaction from the noble Lord the Minister to this amendment. I beg to move.
Lord Renton: My Lords, I can well understand the noble and learned Lord, Lord Elwyn-Jones, wishing to press the Government to provide extra resources for this very necessary service, which we wish to see expand. But I am astonished that the noble and learned Lord should move this amendment in order to try to achieve his object. So far as I know, it is quite without precedent. It would be quite without legal effect, With deep respect to the noble and learned Lord—he has so much more experience of legislation than even I have—I would say to him that this is not the way to legislate.
Lord Elwyn-Jones: My Lords, I hope that the noble Lord, Lord Renton, did not seriously think that I would seek to pass this as an amendment through the House. Clearly, it is a useful occasion on which to obtain, I hope, a promise and a commitment from the Government's Front Bench.
Lord Donaldson of Kingsbridge: My Lords, if I may support the amendment without interfering with the legislative argument, I would only like to say that so much of the good intentions of every Government has fallen down, through lack of enough money for the private and voluntary sector which the probation service administer, that I would like to be associated with every word that the noble and learned Lord, Lord Elwyn-Jones, has said.
Lord Elton: My Lords, I am much obliged to my noble friend Lord Renton for his robust emphasis on a point which I would have put with much greater circumspection and much less effect. Certainly, I would not have provoked two speeches from the noble Lord the former Lord Chancellor at Report stage, I am sure, by my tantalising remarks.
The first point to be made is that the Government are proposing an enabling power. We are not actually laying a duty on a probation committee. That is more than a debating point, because it takes us to the intention behind the provision. At present a probation committee has to look elsewhere—usually to the local authority—for funds to set up an intermediate treatment project. This is not because it lacks its own

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funds but because, as the law stands, it lacks the necessary statutory authority to spend funds for this purpose. For example, the probation service might wish to set up a motor project; that is, a project where youngsters are taught to rebuild and maintain wrecked cars. At present, if the project were aimed solely at juveniles the probation service would have to rely on outside funding or a generous gift to obtain an "old banger" for the youngsters to work on. Clearly, this would not always be satisfactory. It would be far better if the probation service were able to buy an old car from a scrap-yard themselves. The enabling power is therefore intended to give probation committees more flexibility in setting up intermediate treatment projects.
The second point I should like to make also arises from the example I quoted a moment ago. What is involved here is comparatively modest sums of money. The most important element in supervising juveniles is the supervisor himself, and that is already being supplied by the probation service. We do not therefore envisage probation committees setting up expensive intermediate treatment projects. That would not be appropriate. The major provision and co-ordination of such facilities should continue to fall to the local authorities which have wider responsibilities in this area. The probation service will of course continue to play an essential part in supervising juveniles; indeed, the enabling power we are discussing recognises and endorses their contribution. But it is equally important for all the facilities of the local community to be employed by the widest co-operation of all those involved. And that means seeking to use all the means now available rather than setting up new projects. The contribution of the probation service will, therefore, be part of a larger provision in which the local authority will draw together the statutory and the voluntary bodies in a co-ordinated response to the needs of the area. This is in fact already afoot.
It is, therefore, a mistake to concentrate, as the amendment does, on resource questions. That is to miss the point about the enabling power. And in any case the amendment is not necessary, because a probation committee is responsible for ordering its priorities within an agreed level of expenditure and will only use this power in accordance with its current or planned resources.
As the noble and learned Lord made clear, and as I only suspected when I penned these words, the real purpose of the noble and learned Lord is to probe the Government about extra resources for the probation service. I must say that, in comparison with very many other groups where public expenditure is involved, the service has been fortunate in the resources provided for its work. I know the noble and learned Lord says that in the current year there has been only a 3 per cent. increase over the level of 1981–82 and a further increase of only 1 per cent. is planned for next year. I can confirm those figures, but I cannot confirm the "only" when I look at the restraints which the economic position of this country forces us to place upon other services. I do realise that the service will have to take on extra tasks because of various measures in this Bill, though not as many as the noble and learned Lord might have hoped. But I am confident
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that, with the additional resources being made available and with good local management, these tasks, that I do see being used already in the probation service field, will be achieved. I should like in passing to commend those who work in this field. The essence of their work is practicality. I am always admiring of the way they make the most of what is available. Like the noble and learned Lord, I should like it to be more, but it is already more than many other services can look for, so I am afraid I cannot give him a succulent plum when he takes his finger out of the pie.
Lord Elwyn-Jones: My Lords, I like the metaphor with which the noble Lord concluded. I am tempted to respond more vigorously to the noble and learned Lord, Lord Renton, but his intervention has not damaged our long-standing friendship. In view of what the noble Lord the Minister has said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
1.32 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 93:
After Clause 57, insert the following new clause:
("Maximum period of probation.
. In section 2(1) of the Powers of Criminal Courts Act 1973, the words "three years" shall be omitted and the words "two years" shall be substituted.").
The noble Lord said: My Lords, Bills of this kind come but rarely before the House, and therefore the opportunity ought to be taken by legislators, your Lordships may think, to put experience of recent years into the words of the statute. And the experience of recent years has been that shorter probation sentences—if that be the appropriate term—are the most efficacious. That principle, as your Lordships may remember, was indeed acknowledged by the right honourable gentlemen the Minister in another place at Committee stage of this Bill. In dealing with a similar amendment, he said that a trend was apparent and that, if it continued, "there would be a case for bringing the law into line with sentencing practice".
I am not going to weary your Lordships with anything other than three short points. The first is that without any doubt at all those who are administering this service feel that two years should be the maximum and that that should be shown to the courts to be the maximum and that the courts should not be tempted to make it any more.
The second point is that, without any doubt at all, the effect of a long order upon the probationer—the person who is subject to a probation order—is very often disastrous and does not lead to that co-operation at the very commencement of the probation term that everyone would wish to see.
The third and last point is that, if you have a maximum period of three years, there is an inconsistency between the position of somebody who has a suspended sentence and somebody who is subject to a probation order because the maximum period under a suspended sentence order is two years. That means that, if another offence, he is at risk only for two years of somebody who has got a suspended sentence commits having to come back and be sentenced again for the offence for which he was given the suspended sentence.

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So far as the person subject to the probation order is concerned, if there be a maximum of three years, he is at a longer term risk in regard to precisely the same matter. It does seem to be an obvious inconsistency and an unjust one. Those are the three reasons which I advance, and I do hope that the noble Lord the Minister, having reflected upon the debate which took place at Committee stage both here and in another place and having heard my short but nevertheless humble submission, will agree on further consideration that this amendment should be agreed to. I beg to move.
Lord Renton: My Lords, I am afraid on this occasion the noble Lord, Lord Mishcon, has not persuade nor even tempted me. I disagree with him, I am afraid, fundamentally this time. When fixing the maximum period of probation, one should not confuse one's mind with what has become the usual period, the maximum period of probation by analogy with the maximum period of sentence, which I agree is quite a different thing, should be to cover the unusual cases, the most difficult and, sometimes, the worst cases. I do agree that it is very rare for a probation order to be made for as long as three years, but there are rare cases in which it becomes desirable. I give just one example. The Court of Appeal many years ago said that with recidivists, provided the crimes they corn-mined were not too serious, and when custodial sentences had been tried time and again, it was worth giving them a chance with probation. When that happens, it needs to be a fairly long probation order. So that is just one example of why we need to have sometimes more than two years.
The effect on the probationer is a matter for argument. If a long period is needed in order to get the probationer to co-operate fully and to think again about his life of crime, one should not say that anything in excess of two years would necessarily be wrong; it might he right in rare cases. But I think another fundamental objection to the case put by the noble Lord is this. He says that there is an inconsistency in having a maximum of two years for the suspended sentence and a longer period for probation. But of course suspended sentences are quite different. In the case of a suspended sentence there is a Sword of Damocles, and there is no personal relationship, whereas with probation the situation is quite different. So, for those reasons, I would hope that my noble friend would resist this amendment.
Lord Sandys: My Lords, we have had an interesting debate, and I have listened to what the noble Lord, Lord Mishcon, has said, and also to the points that my noble friend Lord Renton has made. We have also taken note of the argument which took place when we discussed this at Committee stage, and the pressure which was given to this particular matter. I am bound to say, however, that, while the Government do not regard this issue as entirely closed, neither have we been persuaded by the case that has so far been made out for a reduction in the statutory maximum length of probation orders to two years.
Perhaps I should first set out the points where I agree with the noble Lord, Lord Mishcon. We both agree that probation orders should run for no longer than is necessary for the probationer to derive any
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benefit which supervision by a probation officer is likely to yield. I think that that is common ground. If supervision continues beyond this point, I fully accept that it may not only be ineffective but may actually set back the probationer's progress. It is for this reason that the Home Office since 1974 has encouraged probation officers, when offering advice to courts on the suitability of an offender for probation, to suggest the term of the order. Probation officers have also been encouraged, for the same reason, to review the progress of probation orders regularly, and to apply for the discharge of any orders which appear to have outlived their useful life. So there is no disagreement upon that point.
Where I take issue with the noble Lord, Lord Mishcon, is over his belief that a three year probation order is never of any benefit to the probationer; and that the third year of supervision in these cases is always a pointless exercise. I think that this is the centre of his argument. As the noble Lord will know, this belief is not shared by the courts. My noble friend Lord Renton referred to a very interesting case in this regard. Recently, about 2,000 persons a year have been given orders for periods of longer than two years. In each of these cases the courts had before them the option of making an order for two years or less, but instead decided, for whatever reason, to make a longer order. Our whole approach in the Bill has been to give the courts more flexible sentencing powers, especially with respect to non-custodial disposals. It would be contrary to this general aim to deprive courts of an option which they still find useful. That again is a matter of general agreement.
I should also emphasise the point made by my honourable and learned friend the Minister of State in another place, and also by me at Committee stage, that it is hard to predict how courts would deal with offenders who are currently given orders for longer than two years if the maximum were reduced. Let me make it quite clear that I am not saying that I believe that all these offenders would be given a custodial sentence instead; and this is an important point. My point is that there is no good reason to assume—as I think perhaps the noble Lord, Lord Mishcon, may assume—that they would in each and every case be given a shorter probation order.
It is also worth examining briefly what happens to three year orders once they have been made. As I explained during the Committee stage, it is open to the probation officer, or indeed the probationer, to apply to the court to have the order discharged early or replaced by a conditional discharge if it appears that the order is no longer serving any useful purpose. It is therefore interesting to note that of the three year orders which terminated in 1980, 49 per cent. had run their full course, and in only 21 per cent. of cases had the order either been discharged early for good progress or been replaced by a conditional discharge. The remaining 30 per cent, were terminated early for another conviction or failure to comply with requirements. In nearly half the cases, therefore, it had apparently been judged that the order was serving some good purpose right up until the limit of its currency.
We now come to the question raised in Committee as regards resource implications. In the debate on this question during the Committee stage the noble

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Baroness, Lady Birk, and the noble Lord, Lord Harris, both mentioned the resource implications for the probation service of a reduction in the maximum duration of probation orders. We have looked carefully, at this point again, and I am bound to say that any savings which resulted from a reduction in the maximum would be slight. Although exact figures are not available, the indications are that the number of three year orders in their third year at any one time constitutes between one half and 1 per cent. of the total caseload of the service, and an even smaller proportion of its total workload. Therefore, the fact is that a reduction in the maximum period would not free a signficant amount of probation resources for other work—even if one makes the doubtful assumption that all those probationers currently given orders for periods of longer than two years would be given shorter orders instead. I hope that this argument is not tedious, but as the noble Lord, Lord Mishcon, has pressed this matter and we discussed it earlier, I am sure that it would certainly be worthy of recording the Government's view on it.
I have explained why we would not be persuaded by the case that has been advanced so far. But I also said that we do not regard this issue as altogether closed. Since the case for a reduction has been pressed so strongly by the House, I have decided that it would be appropriate to seek the views of the judiciary, the magistrates and the probation organisations. These consultations have already been set in motion. In the light of their outcome, we will give further careful consideration to the possibility of reducing the maximum period. This could be done by exercise of the order-making power conferred on my right honourable friend the Home Secretary by Section 2(9) of the Powers of Criminal Courts Act 1973, and would be subject to affirmative resolution. I hope that, in the light of the consultations that I have announced and the undertaking that I have just given, perhaps the noble Lord, Lord Mishcon, will feel able to withdraw his amendment.
Lord Mishcon: My Lords, your Lordships will have noticed that I tried to avoid the use of the word "probationer" only out of my respect for the nursing service. I carefully avoided that phrase, but the noble Minister did not follow my example. In view of the terms of the noble Minister's reply and especially the undertakings both for review and for consultation that he gave, and his advice to the House about the ability to alter this by order, I beg leave to withdraw the amendment and I express my gratitude to the noble Lord.
Amendment, by leave, withdrawn.
Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 94:
After Clause 57, insert the following new clause:
("Hostels, etc.
.—(1) The Secretary of State shall make regulations stipulating that probation and after-care committees shall establish and maintain a specified number of places, in proportion to the population in the area, of—

(a) probation hostels;

(b) bail hostels; and

(c) other hostels for specified classes of offender.

(2) The Secretary of State shall make grants to probation and after-care committees for the purpose of establishing and maintaining hostels under subsection (1) above").
The noble and learned Lord said: My Lords, I beg to move Amendment No. 94. This is a probing amendment to draw attention to a matter of considerable importance—namely, the need for increased provision of hostel accommodation in many parts of the country. This has been urged for a number of years by bodies and committees of authority. In 1978 the House of Commons Expenditure Committee in its report, The Reduction of Pressure on the Prison System—about which we are all concerned in the course of consideration of this Bill—recommended that more initiatives should be taken in the provision of housing and hostels for ex-offenders. Then in 1980 the Parliamentary All-Party Penal Affairs Group recommended that there should be a greatly increased provision of housing and of hostels. The potential value of hostels as an alternative to custody for petty, persistent offenders, has been stressed both in Home Office papers and from other sources and it has also, I believe, the support of the Magistrates' Association. What has been urged is the need for provision of hostels and sheltered accommodation, voluntary and statutory, large and small, some with a warden and some on a less formal bed-sit basis. The opinion has been expressed that it is only by the provision of the widest possible variety of accommodation that there can be any hope of meeting some of the needs of the men and women.
I hope that the tabling of this amendment will produce a positive response from the Government and that at any rate we shall be given some indication of the present programme of hostel provision and, I hope, the promise, and expression of intention, that there should be at an appropriate time a substantial increase in the number of the facilities that I have been mentioning.
Lord Donaldson of Kingsbridge: My Lords, we do not want to use the same argument twice at this late stage. I would only say that as honourary secretary of the All-Party Penal Reform Group, to which the noble and learned Lord referred—I am very grateful to him—and as someone who has been pressing for more hostels for over 25 years, I fully support everything that the noble and learned Lord said.
Lord Mottistone: My Lords, I, too, should like to support the principle of this amendment. I spoke to it at Second Reading, and would particularly like to press upon the Government the need for more accommodation of this sort for girls, in particular young girls.
Lord Sandys: My Lords, I think that the House is indebted to the noble and learned Lord, Lord Elwyn-Jones, for mentioning this particular subject because it gives me the opportunity of mentioning the progress that has taken place, and I think it would be valuable to record it. If the intention behind this amendment is to ensure that the Home Office has sufficient powers—which is apparent—to enable probation and bail hostels to be provided, my reaction is to say that we already have adequate powers to fulfil this task. My right honourable friend the Home Secretary, under paragraph 11 of Schedule 3 and Section 51 of the Powers of the Criminal Courts Act 1973, is able to

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authorise probation committees to provide probation and bail hostels and to meet most of the cost. It is by using those powers that the Home Office has during the past 10 years increased the number of hostels from S7 to 96 and the number of places from 543 to 1,650. 2o that all the major urban areas now have a hostel. There are no powers by which we can require a probation committee to provide a hostel but this has not so far, proved a hindrance. The Home Office is in close touch with the probation service who, with the Probation Inspectorate, is able to advise us whenever there is a need for additional places or a new hostel. Where a need has been perceived there has been no difficulty in persuading the local probation committee to provide a hostel. A modest programme to provide additional places is continuing.
Later this year two new hostels are due to open and two more hostels are planned. Additional places are also being provided in existing hostels—this year there will be 25 such places. I can assure the House that if we are satisfied that in any particular area a new hostel is needed, we have adequate powers and would obtain the funds to make whatever provision was considered necessary. I should emphasise that it is rare for probation and bail hostels to be full. But if that happens, the probation service can usually find a vacancy in a hostel in a neighbouring area. For probation hostels catchment areas usually extend to adjoining probation areas.
I should also make it clear that hostels, while not catering for any specific class of offender, do receive offenders who have committed a wide range of offences. They will include persons with drug and drink problems and minor mental conditions, but they cannot provide treatment for such problems. The provision of medical treatment for alcohol and drug addiction and mental illness is a matter which the Department of Health and Social Security handles.
We consider that probation hostels play an important part in providing to courts an alternative means to custody when dealing with offenders and thereby help to reduce the prison population. The continuing programme of new hostels and new places in them is, we believe, meeting the need for places. But, if the noble and learned Lord is aware of any difficulty in a particular area, I would like to know of it. In view of my assurances about the adequacy of our powers, I hope that the noble and learned Lord can be persuaded to withdraw his amendment.
Lord Elwyn-Jones: My Lords, I am grateful for the support that this amendment has received from all parts of the House, and also to the Minister for his sympathetic response to it. So far, so good, but a great deal more needs to be done. I note the kind invitation that the Home Office would be glad to know of any particularly deprived area in the sense of hostel accommodation, and would take up that invitation. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
1.45 p.m.
Lord Donaldson of Kingsbridge Lord Donaldson of Kingsbridge moved Amendment No. 95:
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After Clause 57, insert the following new clause:
((Probation services during deferment of sentence.
. In section 1 of the Powers of Criminal Courts Act 1973 after subsection (3) there shall be inserted the following sub-section—
"(3A) During any period of deferment the offender may consent voluntarily to use the services of a probation officer or any other organisation".").
The noble Lord said: My Lords, although in the form of a new clause, this is a probing amendment which I hope the noble Lord will have no difficulty either in agreeing to or in explaining why it is not necessary. It is clear to me that any offender given a deferred sentence should be free at any time to ask for the help of the probation service. The new clause, under subsection (3A), says exactly that. The Central Council on Probation and Aftercare wanted this confirmed. As a result of Section 1 of the Powers of the Criminal Courts Act 1973 and some comments made on it recently, they are not clear that this is within the power of an offender sentenced to a deferred sentence.
I am inclined to think, and hope, that the noble Lords answer will be that it is entirely within their power and nothing that has been said in the courts or anywhere else has altered that. But if he cannot say that, I think that this amendment should be included in the Bill. I beg to move.
Lord Sandys: My Lords, I can say that the Government have every sympathy with the intention that lies behind this amendment. By way of a start, I can also give the noble Lord the assurance which he seeks in regard to the Central Council on Probation.
I think it is fair to say that there would be wide acceptance of the need to draw a clear distinction between the use of a probation order—which is a sentence of the court—and the use of the power of deferment—which is a postponement of the sentencing decision and not a sentence in its own right. That principle, and a concern about the pressure on the probation at the time of the introduction of the community service order which coincided with the introduction of the deferment power, led to a cautious approach to any association between the work of probation service and deferment in the initial stages. Indeed, this caution was reflected in official guidance given to the courts, and the noble Lord, Lord Donaldson, will possibly be aware of that fact. Attitudes—and certainly the Government's attitude—have changed since then. We believe that without prejudicing the distinction between the probation order and deferment that I have drawn, it must be recognised that it may be of positive value for an offender to receive supervision on a voluntary basis during a period of deferment. Indeed, a large percentage of offenders who are given a period of deferment are already receiving statutory supervision in one form or another. Deferment can be used as a means of diverting offenders from custody; and if supervision during a period of deferment can assist in that process, there is no reason why it should not be recommended to an offender of a voluntary basis.
There is nothing to prevent what this amendment seeks to achieve from being carried out under the basis of the present statute. We have told chief probation officers that this is our view; that voluntary

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supervision can be appropriate for an offender during a period of deferment; and that it can count as part of a probation officer's workload. However, I am aware of concern in the probation service that some courts do not take this view and refuse to recommend to an offender that he might seek supervision by the probation service in cases where this might be helpful. Indeed, in view of the reservations that were expressed at the time of the introduction it is perhaps not surprising if some courts still take that view.
However, we believe that this situation is best dealt with by clear guidance to the courts. Guidance to the courts on the use of the deferment power will in any event have to be issued as a result of this Bill. Indeed, we had such action under consideration until this was overtaken by the decision to take the opportunity of the Bill to reverse the decision in R. v. Gilbey. Of course, we have referred to this already in our discussion this morning on Amendment 86. I will give a firm undertaking that we will reflect in that guidance the view of the Government—and I take it of Parliament—that there can be no objection, resources permitting, to the supervision of an offender by the probation service or any similar organisation during a period of deferment ordered by the court, to a recommendation on these lines being made by the court itself; and indeed there may be circumstances in which such action would be positively helpful in assisting an offender to benefit fully from a period of deferment. I hope, given that undertaking, that the noble Lord, Lord Donaldson, will agree to withdraw his amendment.
Lord Donaldson of Kingsbridge: My Lords, I am most grateful for that reply. I am sure that the Central Council of Probation and Aftercare Committees will read the noble Lord's reply with satisfaction. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Schedule 12 [Community service orders]:
Lord Sandys Lord Sandys moved Amendment No. 96:
Page 100, line 16, after ("officer") insert ("or by a social worker of a local authority social services department")
The noble Lord said: My Lords, with Amendment No. 96 I should like to speak to Amendment No. 97. These amendments, the purpose of which is to involve social workers more closely in the assessment of the suitability of offenders for community service, reflect the amendment moved by the noble Lord, Lord Mishcon, during the Committee stage. We have considered carefully what the noble Lord said, and have concluded that it would be right to amend the Bill on the lines that he proposed. Under Section 14(2) of the Powers of Criminal Courts Act 1973 courts are obliged, before making a community service order, to consider a probation officer's report and also, if they think it necessary, to hear a probation officer. These amendments will permit courts to meet this requirement by considering a report prepared by a social worker and, if necessary, hearing a social worker in evidence.
The main need for this change in the law arises from the extension of community service to 16-year-olds,
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which is provided for by Schedule 12 to the Bill. Consequently, there will be 16-year-old offenders who might be considered suitable for community service orders and who will at some time have been under the supervision of a local authority social worker. If a social worker knows the youngster and his background then it is obviously sensible that he, rather than a probation officer, should prepare the report for the court.
However, the probation service will have to be involved whenever a social worker makes a recommendation for community service in a social inquiry report. Assessing the ability of an offender to fulfil the demands of a community service order is a specialised task; and one in which community service staff—who are all employed by the probation service—have unrivalled experience. In addition, it is only community service organisers, who have the day to day responsibility for running schemes, who will know if there is suitable work available for a particular offender. Therefore, as the Association of Directors of Social Services have quite rightly said, it will be essential for social workers to consult the probation service before recommending to a court that they should consider making a community service order. No doubt a court considering a report by a social worker in these circumstances will wish to make sure that the probation service has been consulted. We propose to bring this point to the attention of all those concerned by means of official guidance. We are grateful to the noble Lord for having raised this matter at the Committee stage. The change that he has proposed in the Bill is useful; and I commend these amendments to the House.
Lord Mishcon: My Lords, I in turn am most grateful to the Minister.
On Question, amendment agreed to.
Lord Sandys Lord Sandys moved Amendment No. 97:
Page 100, line 17, at end insert ("or a social worker of a local authority social services department").
On Question, amendment agreed to.
Clause 60 [Maximum periods of imprisonment for defaulting on fines etc.]:
Lord Sandys Lord Sandys moved Amendments Nos. 97A, 97B, 97C and 97D:
Page 62, leave out lines 24 to 29 and insert—
(" (a) the following subsections shall be substituted for subsections (2) to (4)—
"(2) Subject to the provisions of this section, if the Crown Court imposes a fine on any person or forfeits his recognizance, the court shall make an order fixing a term of imprisonment or of detention under section 9 of the Criminal Justice Act 1982 (detention of persons age 17 to 20 for default) which he is to undergo if any sum which he is liable to pay is not duly paid or recovered.
(3) No person shall on the occasion when a fine is imposed on him or his recognizance is forfeited by the Crown Court be committed to prison or detained in pursuance of an order under subsection (2) above unless—

(a) in the case of an offence punishable with imprisonment, he appears to the court to have sufficient means to pay the sum forthwith;

(b) it appears to the court that he is unlikely to remain long enough at a place of abode in the United

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Kingdom to enable payment of the sum to be enforced by other methods; or

(c) on the occasion when the order is made the court sentences him to immediate imprisonment, custody for life, youth custody or detention in a detention centre for that or another offence, or sentences him as aforesaid for an offence in additon to forfeiting his recognizance, or he is already serving a sentence of custody for life or a term—

(i) of imprisonment;

(ii) of youth custody;

(iii) of detention in a detention centre; or

(iv) of detention under section 9 of the Criminal Justice Act 1982.

(3A) Subject to subsections (3B) and (3C) below, the periods set out in the second column of the following Table shall be the maximum periods of imprisonment or detention under subsection (2) above applicable respectively to the amounts set out opposite thereto, being amounts due at the time the imprisonment or detention is imposed.
TABLE").
Page 63, line 1, after ("imprisonment") insert ("or detention").
Page 63 line 2, leave out ("sum adjudged to be paid") and insert ("fine or forfeited recognizance").
Page 63 line 12, at end insert—
("(4) Where any person liable for the payment of a fine or a sum due under a recognizance to which this section applies is sentenced by the court to, or is serving or otherwise liable to serve, a term of imprisonment or youth custody or a term of detention under section 4 or 9 of the Criminal Justice Act 1982, the court may order that any term of imprisonment or detention fixed under subsection (2) above shall not begin to run until after the end of the first-mentioned term."; and
(b) the following subsections shall be substituted for subsections (7) and (8)—
"(7) Any term fixed under subsection (2) above as respects a fine imposed in pursuance of such an enactment, that is to say a fine which the magistrates' court could have imposed, shall not exceed the period applicable to that fine (if imposed by the magistrates' court) under section 149(1) of the Customs and Excise Management Act 1979.
(8) This section shall not apply to a fine imposed by the Crown Court on appeal against a decision of a magistrates' court, but subsections (2) to (3C) above shall apply in relation to a fine imposed or recognizance forfeited by the criminal division of the Court of Appeal, or by the House of Lords on appeal from that division, as they apply in relation to a fine imposed or recognizance forfeited by the Crown Court, and the 'references to the Crown Court in subsections (2) and (3) above shall be construed accordingly.".").
The noble Lord said: My Lords, with the permission of the House I should like to take Amendments Nos. 97A, B, C, D, and also link them with 110A. These amendments are all consequential upon our acceptance in another place of the provision in Clause 60 which restricts the power of the Crown Court in the imposition of a custodial term in default of payment of a fine or a forfeited recognisance.
The amendments do two main things. First, they alter Section 31 of the Powers of Criminal Courts Act 1973 to bring it into consistency with the provision whereby, instead of having a general limit of 12 months, the Crown Court will be required to fix a term in default by reference to a maximum period applicable to the sum concerned. Secondly, they make it more convenient for users of the Powers of Criminal Courts Act by putting all the amendments to Section 31 into Clause 60. These include the changes to the terminology arising from Part I which were originally catered for by paragraph 29 of Schedule 13. The
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consequential repeals inserted in Schedule 15 remove redundant references. I beg to move.
On Question, amendments agreed to.
1.57 p.m.
Lord Avebury Lord Avebury moved Amendment No. 98:
After Clause 62, insert the following new clause:
(" Transfers between English and Scottish prisons.
. In section 26(1) of the Criminal Justice Act 1961—

(a) for the word "may" there shall be substituted the word "shall"; and

(b) at the end there shall be inserted the words "unless there are special circumstances which make such a transfer inappropriate".").

The noble Lord said: My Lords, may I first try to clear up a slight misunderstanding that I might have caused when I tried to explain, no doubt imperfectly, what were the provisions of the draft Council of Europe Convention on the transfer of sentenced prisoners which provides for transfers between the various signatory countries, and on which I relied for my argument on transfers within the United Kindgom. The sentenced person under the Convention can be transferred only if he has exhausted his right of appeal; if the sentence is indeterminate; or, if it is determinate, it has still six months to run; if the sentenced person consents to the transfer, and if the acts or omissions would constitute a criminal offence if they were done on the territory of the prisoner's home state.
It is clear that the sentencing state is not bound to accede to a request by a prisoner for a transfer back to his home country if these conditions are not met. Equally, it was slightly misleading to say, as the noble Lord, Lord Elton did last time that each application would be considered individually, because I think the spirit of the Convention is that if the conditions are satisfied the sentencing state would normally agree to a transfer.
There may be exceptions to that rule in the Government's own mind. For instance, there might be, as I think the noble Lord hinted on the previous occasion, special reasons for excluding terrorist offenders from the arrangements. But there is nothing in the wording of the treaty to indicate that that was the intention of the parties, and it would need to be satisfied by an amendment of the draft if that is how the noble Lord and the Government intend to carry it out.
The noble Lord did not address himself to the main point of my argument. This was that it would be illogical for us to agree to more liberal arrangements for transfer between the prison systems of the Council of Europe parties than we are prepared to operate between the systems within the boundaries of the United Kingdom. Mr. Malcolm Rifkind more or less conceded this point in a letter to me which I quoted on the last occasion. I should like the Minister now to confirm that he too agrees with what I have just said. It is that the principle should be that we operate the same basic framework of rules for transfers within the United Kingdom as we are prepared to agree to with our partners in the Council of Europe for transfers between states.
If that point is conceded, then the discretion given to the Secretary of State in Section 26(1) of the Criminal Justice Act 1961 is not being applied in that sense,

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and I quote from a letter I received from Mr. Rifkind dated 29th March:
"Transfer will normally be arranged if he "—
that is, the prisoner—
"is ordinarily resident in another part of Great Britain and only temporarily in the country in which his offence was committed and there are very strong compassionate grounds for a transfer."
Those conditions are not to be found in the Council of Europe draft convention, and therefore it would be harder, say, for a Scottish prisoner convicted in England to be returned to his own country to serve his sentence than it would be a for a Frenchmen or German in our prisons to be repatriated to his own country.
The Minister will be aware that it was a Scottish prisoner whose case first drew this matter to my notice, because the Scottish Office and Home Office between them decided that he could not be transferred back to a Scottish prison to serve his sentence, in spite of the fact that his mother lived in Scotland and it was virtually impossible for her to make the journey all the way to visit him in an English prison. They said that prior to his offence he was ordinarily resident in England and had not come here temporarily from his home in Scotland at the time when he committed the offence.
But if he had been a Frenchman who had come here under the provisions of the Treaty of Rome to seek employment, and he had been here for several years prior to the date of the offence and conviction, as I understand it, under the Council of Europe draft convention, the Government would not say that because the man had taken up ordinary residence in the United Kingdom he should not be entitled to make an application, which would normally be favourably entertained by the Government, for repatriation back to France to serve his sentence.
The noble Lord, Lord Elton, said on the previous occasion that the Government would certainly not propose to treat foreigners more favourably than prisoners from other parts of the United Kingdom, but I have shown that unless this amendment is made, that will be the position. The Council of Europe moves even more slowly than the Home Office, but this is probably the last opportunity Parliament will have of aligning our domestic law with the draft convention before it comes into effect. I hope we shall take it.
Baroness Faithfull: My Lords, I appreciate that there are some prisoners who cannot be transferred. I intervene briefly simply to say that from the point of view of prison staff and social workers dealing with prisoners, it is far easier to deal with them in the prisoners' home areas. Also, from the point of view of family visits, it is much easier than having to bring a family, as I had to do, from Scotland to see somebody in Oxford; it would have been simpler if the prisoner could have been transferred from Oxford to Scotland, which was his habitual home. Therefore, with reservations over certain cases, I support the amendment.
Lord Elton: My Lords, the noble Lord, Lord Avebury, raised this matter in Committee, when I said that we entirely shared his desire that prisoners should in general be able to serve their sentences in establishments
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as near their homes as possible. I am afraid that we cannot, nevertheless, accept the amendment. As I said before, the Council of Europe draft convention is being negotiated as part of arrangements which would enable Governments to repatriate prisoners of foreign nationality. That is the distinction, because a Scotsman would be deeply offended if he were regarded in this country as a resident of foreign nationality. But it is the legal distinction on which that convention is putatively based; that it is the transfer of people of different nationality from the country in which they are imprisoned.
The convention, in any case—I think the noble Lord acknowledged this—will not place any obligation on Governments or give any prisoner an entitlement to be repatriated simply because he holds nationality other than that of the country in which he is serving his sentence. If repatriation arrangements come into force, each application for transfer would be considered individually on its merits. I was not clear why the noble Lord thought it necessary to test that statement, but I repeat it. As he will appreciate, it is as yet too early to decide what the administrative arrangements will be, but we shall draw up guidelines within which each application will be considered when the draft convention achieves reality.
We are therefore working towards a system for the repatriation of foreign prisoners which would be very similar to the present system of transfers between the different jurisdictions within the United Kingdom, and that is the second point I wish to make. Here, the section of the Criminal Justice Act 1961 which the noble Lord is seeking to amend is an enabling power and gives complete discretion to transfer a prisoner on request. The applications are, however, decided in the light of bilateral administrative agreements between the various jurisdictions. As I said earlier, there is some difficulty in dealing with transfers within the United Kingdom because we have a common nationality which does not provide a basis for distinguishing, for example, a Scotsman or a Welshman from an Englishman. The basic criterion on which we decide whether it would be appropriate to transfer a prisoner to another jurisdiction is if he was domiciled in that jurisdiction at the time of his offence.
The noble Lord referred to one case. As I understand it, the person in question had been resident in England for many years before he was convicted, and that of course puts him without the definition my noble friend Lady Faithfull had, because his home was here, and the difficulty we are looking at is the location not of his home but of his family and those who wish to visit him.
Lord Avebury: My Lords, may I ask the Minister to address himself to the Frenchman who has been resident here for seven years, working in the United Kingdom under the provisions of the Treaty of Rome, but whose mother is in France. Would not the Council of Europe draft convention provide that ordinarily, unless there were some other considerations, he would be repatriated to France to serve his sentence, no matter how long he had been working in the United Kingdom?
Lord Elton: The point I am anxious to make, my Lords, is that that would be based on nationality and

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the assumption is, and experience shows, that usually people return eventually to the country of their birth; not always because there are expatriate communities which become absorbed into the visited country. But the Frenchman to whom the noble Lord refers could be expected to have his home in France, though his furniture, (as it were) was in Fulham. This might sound legalistic, but when one is drafting this kind of legislation there must be a touchstone. Therefore, to compare the Frenchman with the Scotsman does not seem to me to be a workable analogy for the basis of legislation.
I concede that one does not want to give to citizens of the United Kingdom privileges that are lesser than one would give to citizens of other countries. But the point that I am making is that the law that the draft convention will eventually apply will achieve the transference of a national from a foreign country to the country of his nationality. But the Scotsman is already in the country of his nationality. Of course, the noble Lord might have strong views on devolution and so on, and one must take note of those, but the fact is that the Scotsman is in the country of his nationality, and we are not keeping him abroad.
To take the noble Lord's amendment into the Bill, on the ground that one is keeping a Scotsman abroad by keeping him in Brixton is, I am afraid, a false ground, and it would also lead to considerable administrative difficulties. I know that there are cases in regard to which the noble Lord is not satisfied that we do as much as we can, but on the whole the system tries to get people nearer to their homes and even to their families for visiting reasons. Where that cannot be done on a permanent basis, prisoners are transferred for accumulated visits at intervals, so that they can be brought into contact with their families. I am sorry that I cannot concede more. I hope that what I have said has done something towards illustrating my view that I am not in breach of the principle to which the noble Lord has appealed.
Lord Drumalbyn: My Lords, I should like to ask my noble friend a question. He referred to a Scotsman being transferred back to Scotland, and I understood him to say that that was at the convicted person's request. In other words, a person could not be transferred back to his country of origin, except at his own request. Does the same apply under the draft convention? It seems to me a very important point.
Lord Elton: My Lords, I am tempted to ask the noble Lord, Lord Avebury, to prompt me regarding this question; but of course the convention is not yet set in concrete. The convention would require not the application of the prisoner, but his consent that he be returned. That is quite a different matter. One can imagine that there are certain countries to which nobody would wish to be returned, and the convention would not require a prisoner to be returned to such a country against his will. If the noble Lord wishes us to say that there are certain Scotsmen who would wish not to be returned to Scotland, I think it unlikely that we would do that, except under circumstances of considerable constraint—
Lord Avebury: My Lords, the draft convention states that the sentenced person can be transferred
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only if he consents to the transfer, but he can also initiate the process, because under Article 4(2) of the draft convention he may express an interest in being transferred. Then the process is triggered off by the sentencing state informing the contracting state of which the person is a national of his wish to be transferred. That then leads to the process of consideration which the noble Lord, Lord Elton, mentioned. It is still a discretionary process; I agree with him on that. But the implication of the convention is that if there are no overwhelming reasons to the contrary, the transfer would be made.
I must say that I cannot understand why the noble Lord should think it necessary to have Section 26(1) at all. If he says that a Scotsman in Brixton is serving a sentence in his own country, then why not leave him in Brixton? But the Government do not go that far; they say that if there are overwhelming compassionate reasons, and if his domicile is normally in Scotland, under those circumstances he may apply to serve his sentence in Scotland.
Lord Elton: My Lords, I should like to say that of course the position is the same if he comes from Cornwall. What I am trying to say is that the concept of nationality is different from the concept of where one's home is.
Lord Avebury: My Lords, I would not disagree with that point. All I was saying—I think that the noble Lord agrees with me; we are on all fours in this respect, at least—is that the person from Scotland, or from Wales, for that matter, should not he treated in an inferior way compared with the person from France or Germany who benefits from the provisions of the draft convention. That was all that I was seeking to achieve—that when the draft convention comes into effect, and a prisoner may apply for a transfer, or may be offered a transfer, between the contracting states, similarly a person from Scotland or Wales could have the right to apply for a transfer back to Scotland or Wales to serve the sentence that has been imposed on him by an English court.
Of course, it would work the same way if it were the other way round, as well. If a person sentenced in Scotland wished to have visits from relatives in England he would come south of the Border, and I really cannot understand why the noble Lord, Lord Elton, makes such difficulty about this, because, even though there is provision in our system for a transfer for accumulated visits, this is not the same as being in the neighbourhood of one's relatives and being able to have visits at fairly short notice from father, mother, sisters or brothers from whom someone may have been separated—as in the case of the gentleman about whom we have been corresponding—for a number of years. He does not have any relatives in England and, so far as I know, there is nobody to visit him. I simply cannot understand the resistance of the Minister to such a simple proposal.
As I obviously have not got the argument across in two attempts, I shall have to think further about this matter to see where I have slipped up in the presentation. Hoping that I shall be able to convince the noble Lord the Minister of the justice of this case on some future

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occasion, if not at present, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 63 [Abolition of right of accused to make unsworn statement]:
2.15 p.m.
Lord Elton Lord Elton moved Amendment No. 99:
Page 64, line 13, at beginning insert ("Subject to subsections (2 and (3) below.").
The noble Lord said: It may be for your Lordships' convenience if we discuss also at this time Amendments Nos. 100, 114, 115 and 130. When the noble Lord, Lord Wigoder, moved in Committee the new clause which became Clause 63, I welcomed it heartily on behalf of the Government. The view that the right of a defendant to make an unsworn statement is anachronistic, and that it is being abused increasingly frequently, is one which I know is widely held. In proposing these amendments to your Lordships, I am not seeking to weaken the clause in any way. They are designed to ensure that it does the job that it was intended to do without interfering with the regular procedures of the court. There are certain types of statement which a defendant makes without being sworn which do not in any way represent the abuse at which the noble and learned Lord's amendment was aimed and which we would not wish to prevent a defendant from making. These include the initial plea of guilty or not guilty, which a defendant is required by law to make personally, and any statement by way of mitigation between verdict and sentence.
The new subsection (2) will ensure that the right to make statements of that kind is not affected by the clause. The other amendments deal with consequential points. Subsection (3) merely provides that the right to make an unsworn statement will subsist at committal proceedings and trials which begin before the section comes into effect. I also propose the repeal of two enactments which assume the continued existence of the right; and finally, an addition to the Bill's Long Title referring to the abolition of the right is proposed. I beg to move.
Lord Wigoder: My Lords, I am grateful, as always to the noble Lord, the Minister.
Lord Mishcon: My Lords, before the noble and learned Lord, Lord Wigoder, finishes his expression of gratitude, may I just ask one question purely in order to see that we have not unconsciously slipped up.
Lord Elton: My Lords, there is a slight contretemps which should not have come to the notice of the noble Lord at all.
Lord Mishcon: My Lords, I am most inquisitive as to the subject matter and should love to join in if I may. I was merely wanting to make sure that nobody had slipped up. I am quite sure that I am wrong and that nobody has, but perhaps I may just mention the point. The noble and learned Lord, Lord Wigoder, was very careful to point out that the statement that would
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be permitted in mitigation was after verdict and before sentence. Would he kindly note that the words "after the verdict" do not appear in his amendment, and that it therefore seems to me that an argument could be made that, if somebody wants to make an unsworn statement in mitigation of what is being said against him, he can do it at any time before he is sentenced? As the noble Lord the Minister was so careful to use the words "after verdict and before sentence", would it not be proper that those words should be in the amendment?
Lord Elton: My Lords, I believe the most speedy thing for me to do is to say that, if indeed there is a point of substance in what the noble Lord has said, I have his point on board and, if it is necessary to do anything as a result, it will be done. I understand that it is not likely that anything should be done.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 100:
Page 64, line 20, at end insert—
("(2) Nothing in subsection (1) above shall prevent the accused making a statement without being sworn—

(a) if it is one which he is required by law to make personally; or

(b) if he makes it by way of mitigation before the court passes sentence upon him.

(3) Nothing in this section applies—

(a) to a trial; or

(b) to proceedings before a magistrates' court acting as examining justices,

which began before the commencement of this section.").
On Question, amendment agreed to.
Lord Sandys Lord Sandys moved Amendment No. 101:
After Clause 63, insert the following new clause:
("Recall of witnesses
.—(1) After section 148 of the Criminal Procedure (Scotland) Act 1975 there shall be inserted the following new section—
"Recall of witnesses.
148A. In any trial, on the motion of either party, the presiding judge may permit a witness who has been examined to be recalled.".
(2) After section 349 of the said Act of 1975 there shall be inserted the following new section—
"Recall of witnesses.
349A. In any trial, on the motion of either party, the presiding judge may permit a witness who has been examined to be recalled.".").
The noble Lord said: My Lords, this short procedural amendment, which applies only in Scotland, is intended to correct an error which arose in the Criminal Justice (Scotland) Act, 1980, which inadvertently removed from the Criminal Procedure (Scotland) Act 1975, the provisions which are being re-enacted.
On Question, amendment agreed to.
Lord Beaumont of Whitley Lord Beaumont of Whitley had given notice of his intention to move Amendment No. 102:
After Clause 63, insert the following new clause:
("Cultivation of cannabis.
. In the Misuse of Drugs Act 1971—

(a) in section 6, at the end of subsection (1) there shall be inserted the words "with intent to supply to another in contravention of section 4(1) of this Act any controlled drug derived from such plant."

(b) in section 37, in the definition of "produce", for the words "Cultivation or any other method" there shall be substituted the words "extraction, compounding or synthesis"; and

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(c) in Schedule 4, in the entry relating to section 6(2) (cultivation of cannabis plant) there shall be substituted for the words in column 7 the words "3 months or £500, or both. 5 years or a line, or both." ").

The noble Lord said: My Lords, here we reach the problem of relevance again. At this moment I was going to beg your Lordships' pardon for not having in fact sorted these out and produced more suitable amendments at this particular stage, since this matter was raised in its major form only on Wednesday. But since it seems that more than one Front-Bencher has been taken unawares by this particular problem, I do riot think that probably two poor Back-Benchers like Lord Melchett and myself need carry too much blame.
There is a question as to whether Amendment No.102 is deficient because of relevance. Our notice was drawn to this, but there is a case, I think, for saying that it is entirely relevant. Under this amendment cultivation for sale would remain an offence subject to existing penalties. Cultivation for personal use would also remain illegal under the law prohibiting personal possession of cannabis. Our Amendment No. 102, therefore, reduces the penalty for the cultivation of cannibis only if the cannabis being cultivated is for personal use. So in not moving Amendment No. 102 we shall either come back at Third Reading with a different amendment or we should like the opportunity to argue this with the authorities, to see whether in fact this could be considered a relevant amendment, in which case we would reintroduce it at the next stage.
At the same time, in order to save time perhaps I may mention Amendment No. 103. Here we certainly accept the point that as at present drafted this amendment is irrelevant, but we hope to produce a new amendment at Third Reading simply reducing the penalty for this offence. With those words of explanation, which I hope your Lordships will accept, I should like not to move Amendments Nos. 102 and 103.
[Amendment No. 102 not moved.]
[Amendment No. 103 not moved.]
Lord Avebury Lord Avebury moved Amendment No. 104:
After Clause 63 insert the following new clause:
("Possession of cannabis for personal use non-imprisonable on summary conviction
. In paragraph 1 (1)(c)(i) of Schedule 5 to the Criminal Law Act 1977, the words "3 months or £500, or both" shall be omitted and the words "£500 where the drug concerned is cannabis or cannabis resin, and 3 months or £500, or both, if the drug concerned is not cannabis or cannabis resin" shall he inserted.").
The noble Lord said: My Lords, I know that the noble Lord, Lord Melchett, has been unavoidably prevented from attending this afternoon, and as my name appears on this amendment I was asked whether I would move it on his behalf and say that he very much regrets, as I think we all do, that a matter of such importance should be taken for the second time late on a Friday afternoon, when so many of your Lordships have other pressing engagements and when the subject cannot be discussed at the length or in the depth that it demands.
I am certainly not going to try to detain your Lordships for long at this late hour, but I want to point out that according to some figures that were given by the noble Lord, Lord Elton, in a letter to the noble Earl,
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Lord Listowel, the number of custodial sentences being imposed for the possessionof cannabis is on the increase. The figures that were given by the noble Lord show that, in 1980, 626 persons were sentenced to immediate custody, and that this number went up to 724 in 1981. So we are not dealing with an insignificant number of custodial sentences when we are talking about the simple possession of cannabis.
I must emphasise that these were all persons who had previous convictions—we are not talking about first offenders here—or who were at the same time convicted of other offences which were unrelated to drugs; and one wonders whether the courts, in imposing custodial sentences for the simple possession of cannabis, do so to add something on (as it were) to the person's sentence for other offences, whereas they would not have done so if that person had come before them solely for the drugs offence.
I think it has been pointed out on a number of occasions that something like 3 million of the citizens of the United Kingdom have taken cannabis at one time or another, so that the existence of custodial sentences is obviously not a deterrent. There is a lack of conclusive evidence of harm, which has most recently been emphasised by the Advisory Council on the Misuse of Drugs, but the offence nevertheless takes up an enormous amount of the time of the police and the courts and results in an increase in the numbers in prison which is totally avoidable. I hope that even at this late stage the Government will see the force of the arguments which have been presented over many years now: that we should decriminalise the simple possession of cannabis, leaving the matter to be dealt with simply by the imposition of fines. I beg to move.
Lord Donaldson of Kingsbridge: My Lords, I moved this amendment at Committee stage and arranged with the noble Lord, Lord Melchett, that if he dropped his and put his name on this I would withdraw mine—which was why I was surprised when I found that he had asked Lord Avebury to move it. However, the noble Lord has said all that has to be said, and perhaps rather more because I think there is no point whatever in this amendment if we do not take it to a Division. We know the arguments on both sides and I think we shall have to bring it back at Third Reading, like a number of other things, when we shall hope to be able to test the feeling of the House in a way which we have been unable to do on two occasions because of the way this Bill has been run in this House. I feel sure that the noble Lord will withdraw the amendment. I hope that he will, and that he will come back to it on Third Reading.
Lord Elton: My Lords, what I have to say is not lengthy and I will try to curtail it in the circumstances. As I have said before, we do not think it right to deprive the lower courts entirely of the option of the short custodial penalty, which is what this amendment seeks to do. There may be cases in which a short sentence of imprisonment would be appropriate; for example, when the offender has had previous convictions. Those who want to amend the penalties for possession of cannabis have pointed out (and the noble Lord, Lord Avebury, has referred to) the number of persons sent to prison as a result of current legislation;

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but I should add that in 1980, while there were about 10,000 persons found guilty or cautioned whose sole offence under the Misuse of Drugs Act was possession of cannabis, only 150 were given immediate custodial sentences by the lower court. But each one of those 150 was either convicted at the same time for another non-drug offence or had previous convictions.
Had this new clause been in force at that time some of them, at least, would still have been imprisoned in any case because of those other offences, and I should add that those others who had previous convictions might have been committed to a higher court simply because the lower court was, because of the amendment, unable to award a custodial sentence. This does not suggest that the sentencing practice adopted by the courts is so inappropriate as to require parliamentary intervention.
The House is aware that under the Misuse of Drugs Act, the Advisory Council on the Misuse of Drugs advises the Government on all aspects of drug abuse. I said at Committee stage—and the noble Lord, Lord Donaldson, will recall and those of your Lordships who forgot will be able to look into Hansard to see the point which I will not now elaborate—that the state of inquiry into the eventual effects of smoking cannabis, particularly over a long period, is entirely inadequate to make a decision as to whether or not it is a basically harmful activity.
I think it would he entirely wrong in present social conditions by nibbling at the rules (which I am sure we shall be told is all that this amendment does) to signal some change of heart. I said, and shall doubtless repeat at Third Reading if the amendment reappears, that I recall the difference in the view of tobacco as it was when I was a young man and started to smoke and as it was when, over 40 years of age, I gave up smoking over 40 cigarette a day. It is purely coincidental, but pretty appropriate, that I should be wearing the Cancer Research Campaign tie as I ask your Lordships not to accept this amendment, either now or at Third Reading.
Lord Avebury: My Lords, the noble Lord, Lord Donaldson, is right. We cannot pursue this now and we shall have to refer to it on a future occasion. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
2.30 p.m.
Lord Wigoder Lord Wigoder had given notice of his intention to move Amendment No. 105:
After Clause 63, insert the following new clause:
("Disqualification for jury service
. In Part II of Schedule I to the Juries Act 1974 (persons disqualified) there shall be inserted after the words "borstal institution" the words—
"; or
(iii) been convicted on two or more separate occasions of an offence triable, in the case of an adult, on indictment.".").
The noble Lord said: My Lords, the noble Lord, Lord Harris of Greenwich, and I wish to reserve our position on this amendment until Third Reading, which is now in October. We shall be much influenced at that stage in deciding what to do by any indication that there may be from the Government of their own
1132
determination to legislate to deal with this very important matter. In those circumstances, at this stage the amendment is not moved.
[Amendment No. 105 not moved.]
Schedule 13 [Minor and consequential amendments]:
Lord Sandys Lord Sandys moved Amendment No. 105A:
Page 116, line 29, after ("custody" ") insert (", and after the word "centre" where first occurring there shall be inserted the words or a young offenders institution" ").
The noble Lord said: My Lords, the purpose of this amendment is to provide that a person unlawfully at large from a young offenders' institution in Scotland may be arrested by a constable without warrant in England and Wales. Section 49(1) of the Prison Act 1952, which extends throughout the United Kingdom, makes provision for the arrest of persons unlawfully at large from sentences of imprisonment or detention in a detention centre imposed in Scotland. The provision has, however, never been amended to include persons unlawfully at large from sentences of detention in a young offenders' institution and this amendment seeks to make good that omission. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 106:
Page 116, line 45, leave out paragraphs 10 and 11.
The noble Lord said: My Lords, this is one of the armed forces amendments to which I spoke with Amendment No. 58. In the absence of the noble and learned Lord, Lord Elwyn-Jones, I will not dilate upon how the information that is changed is carried through to the military courts. It removes from Schedule 13 provisions which are now contained in the new Schedule SA. I beg to move.
Lord Mishcon: My Lords, in the absence of my noble and learned friend, I express the appreciation of the House to the Minister. My noble friend's absence has led, obviously, to a very short speech instead of a long one.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 107:
Page 117, line 14, leave out paragraph 13 and insert—
("13. The following subsections shall be substituted for subsections (4) to (7) of section 26 of that Act (transfer to serve sentence)—
("(4) Subject to the following provisions of this section, a person transferred under this section to any part of the United Kingdom or to any of the Channel Islands or the Isle of Man there to serve his sentence or the remainder of his sentence shall be treated for purposes of detention, release, supervision, recall and otherwise as if that sentence (and any other sentence to which he may be subject) had been an equivalent sentence passed by a court in the place to which he is transferred.
(4A) A person who has been sentenced to a sentence of a length which could not have been passed on an offender of his age in the place to which he has been transferred, shall be treated for the purposes mentioned in subsection (4) of this section as the Secretary of State may direct."
13A. The words "youth custody centre" shall be substituted for the words "Borstal institution" in section 29(1) (removal of prisoners etc. for judicial purpose) and section 30(3) (prisoners unlawfully at large) of that Act.

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13B. In subsection (2) of section 32 of that Act (supervision and recall)—

(a) in paragraph (i) for the word "section" there shall be substituted the words "sections 206,";

(b) at the end there shall be added the following paragraphs—

"(.) section 16 of the Criminal Justice Act 1982;
(k) section 73(4), (5) and (6) of the Children and Young Persons Act (Northern Ireland) 1968.".
13C. The words "or of any authorised officer" shall be added at the end of section 33 of that Act (orders relating to transfers of prisoners and others to be under hand of the Secretary of State or of an Under-Secretary or Assistant Under-Secretary of State).").
The noble Lord said: My Lords, this set of amendments to Schedule 13, and the amendments to Schedule 15 which were tabled with them—and I am referring to Amendments Nos. 107, 108, 109, 11 8, 119, 120, 122, 124, 125 and 126—made changes relating to the transfer of young offenders between the various jurisdictions. Under Part III of the Criminal Justice Act 1961—to which most of these amendments relate—offenders in custody can be transferred from one jurisdiction to another either to serve their sentences or for temporary purposes, such as to receive visits or to appear in court.
England and Wales, Scotland, Northern Ireland, the Isle of Man and the Channel Islands each have slightly different systems of custodial sentences for young offenders. The transfer provisions have been much amended since 1961 as changes have been made within those systems. In making these further amendments, we have taken the opportunity to simplify the existing provisions.
The underlying idea has always been to ensure that no substantial advantage or disadvantage accrues to an offender by reason only of being transferred. Briefly, the amendments provide that an offender who is transferred should be treated for all purposes by the receiving jurisdiction as if his sentence had been an equivalent sentence passed by a court in the place to which he is transferred. This covers also the treatment of those transferred for temporary purposes. The Secretary of State is given power by order to designate equivalent sentences. A measure of this kind has been used without difficulty in the Children and Young Persons Act 1969. I hope what I have said gives sufficient indication of what the amendments achieve. They have been prepared in close consultation with the other jurisdiction. I beg to move.
Lord Avebury: My Lords, may I ask just one question? Regarding these transfers between jurisdictions, which is still a discretionary process, do there have to be strong compassionate grounds for that discretion to be exercised in favour of the transfer?
Lord Elton: The amendments actually deal with the treatment of the offender in the different jurisdiction. It does not alter the provisions of Section 26(1) of the 1961 Act which govern the circumstances in which a transfer can be made. They only affect how the offender is to be treated in the receiving jurisdiction. The intention is to see that there shall be neither benefit nor disbenefit as a result of the change of location in the application of the sentence. I hope that that has reassured the noble Lord.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 108:
Page 117, line 17, leave out from ("section") to end of line 19 and insert ("38 of that Act (construction of references to imprisonment, detention, etc.)—

(a) in paragraph (a) of subsection (3)—

(i) after the word "imprisonment", in the second place where it occurs, there shall be inserted the words "custody for life, youth custody,"; and

(ii) for the words "or detention in a detention centre or young offenders institution" there shall be substituted the words "detention in a detention centre or young offenders institution or detention under an equivalent sentence passed by a court in the Channel Islands or the Isle of Man";

(b) the following subsection shall be inserted after subsection (5)—

"(6) The Secretary of State may by order designate as equivalent sentences for the purposes of this Act and of any enactment referred to in Part III of this Act a description of sentence which a court with jurisdiction in one part of the United Kingdom or in the Channel Islands or the Isle of Man may pass and a description of sentence which a court elsewhere in the United Kingdom or in those Islands may pass;".").
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 109:
Page 117, line 20, leave out from ("section") to end of line 24 and insert ("39 of that Act (interpretation)—
(a) in subsection (1), the following definition shall be substituted for the definition of "appropriate institution"—
"appropriate institution", in relation to any person, means, subject to subsection (1A) of this section, any institution which would be appropriate for the detention of an offender of the same age serving an equivalent sentence passed by a court in the place to which he has been transferred; and
(b) the following subsections shall be inserted after that subsection—
"(1A) Subsection (1) of this section shall have effect in relation to a person serving a sentence of a length which could not have been passed on an offender of his age by a court in the place to which he has been transferred as if it defined "appropriate institution" as meaning such place as the Secretary of State may direct.
(1B) Any reference in this Act to a sentence being equivalent to another sentence is to be construed as a reference to its having been so designated under section 38(6) of this Act.").
15A. In section 42(1) of that Act (application to Scotland). after the word "thirty-five;" there shall be inserted the words "section thirty-six;".")
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 110:
Page 119, line 38, at end insert—
("21A. The following words shall be added at the end of section 15(1) of the Children and Young Persons Act 1969 (variation and discharge of supervision orders)—
"or power to insert in the supervision order a requirement in pursuance of section 12(3C)(aa) of this Act in respect of any day which falls outside the period of 3 months beginning with the date when the order was originally made.".").
The noble Lord said: My Lords, this amendment is consequential upon the night restriction amendments to which the House agreed on Clause 21. It amends Section 15 of the Children and Young Persons Act 1969; that is the provision under which the courts may on the application of the supervisor or the supervised person, discharge or vary a supervision order. Clause 21, as amended, empowers the courts to attach a night restriction requirement during the first three months of supervision. This amendment provides that a

1135
night restriction requirement may not be added after that initial three months have elapsed. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 110ZA:
Page 120, line 20, leave out ("that Act") and insert ("the Fire Precautions Act 1971").
The noble Lord said: My Lords, this amendment is purely a drafting amendment, and I beg to move.
On Question, amendment agreed to.
Lord Sandys Lord Sandys moved Amendment No. 110A:
Page 121, line 1, leave out paragraph 29.
The noble Lord said: My Lords, this amendment is consequential on Amendments Nos. 97A to 97D. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendments Nos. 110AB and 110AC:
Page 122, line 30, leave out ("subsection (4)(a) of").
Page 122, line 31, after ("offenders)") insert—

("(a) in subsection (2) for the words "the statutory restrictions upon the imprisonment of young offenders" there shall be substituted the words "section 1 of the Criminal Justice Act 1982"; and

(b) in subsection (4)(a)").

The noble Lord said: My Lords, with your Lordships' permission, I will deal with Amendments Nos. 110AB and 110AC together. These are drafting amendments which affect Section 36 of the Criminal Law Act 1977 which deals with the enforcement of fines against young offenders. Section 36 refers to the statutory restrictions upon the imprisonment of young offenders. Those restrictions are themselves being repealed and are replaced by the restrictions in Clause 1 of the Bill. These amendments substitute a reference to Clause 1 for a reference to the present restrictions. I beg to move.
On Question, amendments agreed to.
Lord Elton Lord Elton moved Amendment No. 110B:
Page 125, line 10, at end insert—
("44A. In section 77(2) of that Act (power to fix a term of imprisonment and postpone issue of warrant of distress) after the word "imprisonment" there shall be inserted the words "or detention under section 9 of the Criminal Justice Act 1982 (detention of persons aged 17 to 20 for default)".").
The noble Lord said: My Lords, these are minor and consequential amendments to the Magistrates' Courts Act 1980 and provide that young adults now in prison for default will in future be committed to be detained under Clause 9. All references to "imprisonment for default" therefore need to be changed to references to "imprisonment or detention". Most of these are taken care of by the general provision made in paragraph 48 of Schedule 13, but these two amendments—if your Lordships will allow me, I should have said that the second amendment is No.111ZA—deal with three further separate references to imprisomnent which also need to be changed. It is a question of wording, and I beg to move.
On Question, amendment agreed to.
2.40 p.m.
Lord Elton Lord Elton moved Amendment No. 111:
Page 125, line 44, at end insert—
("48A. The words "or the Crown Court" shall be added at the end of section 119(3) of that Act (postponement of taking recognizance)").
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 85. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 111ZA:
Page 126, line 14, at end insert—
("52. In Schedule 4 to that Act (imprisonment for default) the words "or detention" shall be inserted after the word "imprisonment" in paragraphs 1 and 2(1).").
The noble Lord said: My Lords, this amendment is also consequential. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 111A:
Page 126, line 14, at end insert—
("Contempt of Court Act 1981 (c. 49).
The following subsection shall be inserted after subsection (2) of section 14 of the Contempt of Court Act 1981 (which relates to penalties for contempt and kindred offences in proceedings in England and Wales).
"(2A) In the exercise of jurisdiction to commit for contempt of court or any kindred offence the court shall not deal with the offender by making an order under section 18 of the Criminal Justice Act 1982 (an attendance centre order) if it appears to the court, after considering any available evidence, that he is under 17 years of age.".").
The noble Lord said: My Lords, the Contempt of Court Act 1981 provides that a magistrates' court shall not make an attendance sentence order on a juvenile who is in contempt. Now that Clause 18 allows the Crown Court to make attendance centre orders, that prohibition needs to be applied also to the Crown Court. That is what this amendment and Amendment No. 126A achieve. I beg to move.
On Question, amendment agreed tio.
[Amendment No. 112 not moved.]
Schedule 14 [Minor and consequential amendments—Scotland]:
Lord Sandys Lord Sandys moved Amendment No. 112ZA:
Page 126, line 17, at end insert—
("Trespass (Scotland) Act) 1865 (c. 56).
. In section 4 of the Trespass (Scotland) Act 1865 (apprehension and punishment of offenders) for the words from, "and on being convicted" onwards, substitute the words "; and every person committing an offence against the provisions of this Act shall be liable, on summary conviction, to a fine not exceeding level 1 on the standard scale.".").
The noble Lord said: My Lords, this amendment derives from an undertaking given by my honourable friend the Minister for Home Affairs and the Environment at the Scottish Office during the Committee stage in another place of the Civic Government (Scotland) Bill. The amendment removes the penalty of imprisonment for offences under the Trespass (Scotland) Act 1865, replaces the existing maximum fine of £10 with a new maximum fine of £25 and deletes the provision which allows a person to be convicted on uncorroborated evidence. I beg to move.
On Question, amendment agreed to.
Lord Sandys Lord Sandys moved Amendment No. 112A:
Page 126, leave out lines 31 to 36 and insert—
("(b) at end of that section insert the following subsection—
"(4) Subsection (2) above shall extend to Scotland, but save as aforesaid this section shall not extend to Scotland.".
3. At the beginning of section 702 of that Act (offences punishable as misdemeanors) insert the words "Subject to section 703 of this Act,".
4. For paragraph (a) of section 703 of that Act (summary proceedings in Scotland) substitute the following paragraphs—
"(a) subject to section 43(2) of the Merchant Shipping Act 1979 (which among other things makes certain offences triable either summarily or on indictment), any offence under this Act which was triable only summarily immediately before 1st January 1980 (the date of commencement of the said section 43) shall continue to be so triable and shall be deemed to have been so triable at all times since that date;
(aa) subject to any special provisions of this Act—

(i) an offence under this Act described as a misdemeanor shall be triable either summarily or on indictment and, subject to any other penalty prescribed in respect of any particular offence, shall be punishable on summary conviction with a fine not exceeding the statutory maximum or imprisonment for a term not exceeding 6 months or both, and on conviction on indictment with a fine or imprisonment for a term not exceeding 2 years or both;

(ii) subject to sub-paragraph (i) above, an offence under this Act made punishable with imprisonment for any term not exceeding 6 months or with a fine or a maximum fine which does not exceed level 5 on the standard scale shall be triable only summarily;

(iii) an offence under this Act not falling within paragraph (a) above or the preceding provisions of this paragraph shall be triable either summarily or on indictment:

Provided that in relation to the period before the commencement of section 50 of the Criminal Justice Act 1982 sub-paragraph (ii) above shall have effect as if for "level 5 on the standard scale" there were substituted "£1,000";".").
The noble Lord said: My Lords, this amendment is designed to bring the mode of trial in Scotland for offences under the Merchant Shipping Act 1894 into line with that in England and Wales, and in so doing to avoid the anomalies which might otherwise arise in penalty levels for such offences in the different jurisdictions, as a result of the provisions in this Bill. I beg to move.
On Question amendment agreed to.
[Amendment No. 113 not moved.]
Schedule 15 [Repeals]:
Lord Elton Lord Elton moved Amendment No. 114:
Page 133, line 9, at end insert—

("61 & 62 Criminal Vict. c. 36. 1898.

Evidence Act

In section 1, paragraph (h) of the proviso.").

The noble Lord said: My Lords, Amendment No. 114 is consequential on Amendment No. 99. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 115:
Page 133, line 17, at end insert—

("15 & 16 Geo. 5 c. 86

Criminal Justice Act 1925.

Section 12, so far as un-repealed.").

The noble Lord said: My Lords, this amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Sandys Lord Sandys moved Amendment No. 116:
Page 133, line 24, column 3, at end insert—

("In section 55(3), the words "Subsection (2) of section twenty-two, and".").

The noble Lord said: My Lords, this amendment disapplies Section 22(2) of the Prison Act 1952 to Scotland. This provision is not required to extend to Scotland, because the Secretary of State for Scotland has a power similar to that conferred by Section 22(2) under Section 10(2)(b) of the Prisons (Scotland) Act 1952. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 117:
Page 133, line 24, at end insert—

(" 3 & 4 Eliz. 2. c. 18.

Army Act 1955.

Section 71A(2).

3 & 4 Eliz. 2. c. 19.

Air Force Act 1955.

Section 71A(2).

5 & 6 Eliz. 2. c. 53.

Naval Discipline Act 1957.

Section 43A(2).").

The noble Lord said: My Lords, these minor repeals are consequential on the armed forces amendments which were debated on Amendment No. 58. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendments Nos. 118, 119 and 120:
Page 133, line 26, column 3, leave out from beginning to ("7") in line 28 and insert—

("Sections 3 to").

Page 133, line 29, column 3, at end insert—

("Section 32(2)(a), (c) and (e).").

Page 133, line 30, column 3, at end insert—

("Section 38(5). In section 39(1), the definition of "the statutory restriction on the imprisonment of young offenders".").

The noble Lord said: My Lords, Amendments Nos. 118, 119, and 120 are all consequential on Amendment No. 107. I beg to move.
On Question, amendments agreed to.
[Amendment No. 121 not moved.]
Lord Elton Lord Elton moved Amendment No. 121A:
Page 134, line 11, column 3, leave out ("Section 2" and insert—

("In section 2, in subsection (6), the words from "under", in the first place where it occurs, to "Act" and subsection").

On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 122:
Page 134, line 20, column 3, at end insert—

("Section 29(6).").

The noble Lord said: My Lords, this is consequential on Amendment No. 107. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 122A:
Page 134, line 20, column 3, at end insert—

("In section 32(2), the words "Schedule 4 to that Act or".").

The noble Lord said: My Lords, this is consequential on Amendment No. 97A. I beg to move.
On Question, amendment agreed to.
Lord Sandys Lord Sandys moved Amendment No. 123:
Page 135, line 9, leave out ("Section 31") and insert ("In section 31, subsection (4)(c) and the word "and" immediately preceding it and subsection").
The noble Lord said: My Lords, this has been taken with Amendment No. 56. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 123A:
Page 135, leave out line 10 and insert—

("In section 36, subsection (1) and in subsection (9) the definition of "the statutory restrictions upon the imprisonment of young offenders".").

The noble Lord said: My Lords, this amendment repeals the definition of "the statutory restrictions upon the imprisonment of young offenders". Those statutory restrictions are themselves all repealed and replaced by Clause 1 of the Bill. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 124:
Page 135, line 19, after ("1") insert ("and paragraph 2(3) and (4)").
The noble Lord said: My Lords, this amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Sandys Lord Sandys moved Amendment No. 124ZA:
Page 135, line 29, column 3, after ("1973") insert ("paragraph 1(6) and").
The noble Lord said: My Lords, this amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendments Nos. 124A and 124B:
Page 135, line 47, column 3, at end insert—

("In Schedule 4, in the entry relating to the powers of Criminal Courts Act 1973, the words "31(7) and".").

Page 136, line 9, at end insert ("and in paragraph 120(a), the words from "and for" to the end of the paragraph.".").
The noble Lord said: My Lords, these amendments are both consequential on Amendment No. 97A. I beg to move.
On Question, amendments agreed to.
Lord Elton Lord Elton moved Amendments Nos. 125 and 126:
Page 136, line 24, leave out ("paragraph") and insert ("paragraphs 7, 12 and").
Page 136, line 24, at end insert—

(" S.I. 1980/1088.

Criminal Justice and Armed Forces (Northern Ireland) Consequential Amendments Order 1980.

In Article 2, paragraph (1)(a)(ii) and (iii) and(e.").

The noble Lord said: My Lords, Amendments Nos. 125 and 126 are consequential on Amendment No. 107. I beg to move.
On Question, amendments agreed to.
Lord Elton Lord Elton moved Amendment No. 126A:
Page 136, line 29, column 3, at beginning insert—

("Section 12(3).").

The noble Lord said: My Lords, this amendment is consequential on Amendment No. 111A. I beg to move.
On Question, amendment agreed to.
Schedule 16 [Transitional provisions]:
Lord Elton Lord Elton moved Amendment No. 127:
Page 138, line 5, at end insert—
("4A.—(1) An offender in respect of whom—

(a) a custodial order under section 71AA of the Army Act 1955 or section 71AA of the Air Force Act 1955 or section 43AA of the Naval Discipline Act 1957; or

(b) a custodial order under paragraph 10 of Schedule 5A to the Army Act 1955 or Schedule 5A to the Air Force Act 1955 or Schedule 4A to the Naval Discipline Act 1957,

has been made specifying a maximum period of more than 4 months which has not expired at the commencement of sections 1 to 15 above, shall be treated for all purposes of detention, release and supervision as if he had been sentenced to youth custody for that period.
(2) An offender in respect of whom such an order has been made specifying a maximum period of 4 months or less which has not expired at the commencement of sections 1 to 15 above, shall be treated for all purposes of detention, release and supervision as if he had been sentenced to detention under section 3 above for that period.
(3) Nothing in sub-paragraph (2) above shall require the Secretary of State to remove an offender who is subject to detention under a custodial order for a term of more than 4 months to a youth custody centre,").
The noble Lord said: My Lords, this amendment is consequential on the armed forces amendments which were debated on Amendment No. 58. It makes transitional provisions to deal with service offenders who are, on the commencement date of the legislation, serving sentences passed under the existing provisions. That is that amendment. I should have warned your Lordships when we were dealing with Amendment No. 113—but we got out of it before I was fully aware—that there will be a need for a further minor amendment to that schedule, which will need to be inserted at the later stage. I hope that your Lordships are content with my doing it at this stage—because if your Lordships would prefer me to do it at end of Report stage, on free standing, I am quite happy to do so.
If your Lordships are content, may I just tell you that the existing schedule of the Criminal Appeal Act 1968 will apply to new young offender sentences, but a small change is needed to ensure that it will apply to them in exactly the same way as it applies to imprisonment. It has only just been discovered that, unless that change is made, there will be a slight narrowing down of the circumstances in which a

1141
young offender has such a right of appeal against sentence. It is also necessary to give the young offender similar rights to appeal if he is being committed to the Crown Court to be sentenced for breach of an attendance order. I thought your Lordships would want notice of this. Although it is not a controversial issue, it increases the rights of prisoners to appeal. There will be one or two minor tidying up points as well.
May I now return your Lordships—having been slightly jolted by the experience of returning to Schedule 13—to the amendment in hand; it is consequential and I beg to move.
On Question, amendment agreed to.
Lord Sandy'sLord Sandy's moved Amendment No. 128:
Page 141, line 40, at end insert—
("Fines.
17. Any provision of Schedule 14 to this Act which alters the penalty for any offence shall not affect the penalty for an offence committed before that provision comes into force.").
The noble Lord said: My Lords, this amendment provides that Schedule 14 shall not affect the penalty which may be imposed in respect of an offence before it comes into force. I beg to move.
On Question, amendment agreed to.
In the Title:
Lord Elton Lord Elton moved Amendment No. 128A:
Line 1, leave out ("the powers of courts with regard to").
The noble Lord said: My Lords, this amendment reflects the amendment to make provision for the appointment of a chief inspector of prisons, to which your Lordships gave agreement on Wednesday. During our debate the noble Lord, Lord Wigoder, raised the question of whether the Long Title was adequate to cover this provision. Parts I and II of the Bill make various amendments to the Prisons Act 1952 and the Secretary of State's powers in relation to offenders. The chief inspector provision is related to these matters. But the draftsman has considered the point and advises that the matter would be made clearer if the first purpose set out in the Long Title is changed in the way proposed in this amendment. I beg to move.
On Question, amendment agreed to.
Lord Sandys Lord Sandys moved Amendment No. 129:
Line 10, after ("offences") insert ("and the recall of witnesses").
The noble Lord said: My Lords, this is a technical amendment which is consequential on Amendment No. 101. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 130:
Line 12, after ("persons") insert ("to abolish the right of a person accused in criminal proceedings under the law of England and Wales to make an unsworn statement;").
The noble Lord said: My Lords, this amendment is consequential upon Amendment No. 99. I beg to move.
Lord Renton: My Lords, I merely wanted to say that it did not seem to he entirely accurate to use the word
1142
"abolish" here. I would have thought that the word "vary" was more appropriate.
Lord Mishcon: My Lords, mine is a far less good reason, from one point of view, for rising. I have an idea that the next amendment is not going to be moved and I wanted to take this opportunity, on behalf of all those who sit on my Benches, to say that, bearing in mind the heavy responsibility and obligations of the noble Lord the Minister, and indeed his anxieties over the past few weeks, we want to express our thanks and commendation for the way in which he has handled the complicated Report stage of a very complex Bill over very lengthy hours in this House.
Lord Donaldson of Kingsbridge: My Lords, I must associate myself with those remarks. We have been opposite one another on a number of Bills and yet we have never seriously quarrelled. I believe that the noble Lord has dealt with our vagaries most admirably.
Lord Renton: My Lords, if I may have the leave of the House to speak again, I should like to endorse what has just been said about the excellent way in which my noble friend Lord Elton has conducted these proceedings for us.
Lord Elton: My Lords, it is very pleasant to sit, as it were, in the carriage receiving these bouquets. I can only say that everything that noble Lords who are my friends on all sides of the House have said is reciprocated from this side. These have been very trying times and your Lordships have been patient when on a number of occasions I got into certain difficulties with my brief or my memory. Your Lordships have been most kind and I am most grateful for the help we have had.
On Question, amendment agreed to.
Lord Wigoder Lord Wigoder had given notice of his intention to move Amendment No. 131:
Line 12, after ("persons;") insert ("to amend the Juries Act 1974;").
The noble Lord said: My Lords, I think it is a gross breach of all the proprieties that various of your Lordships have said on Amendment No. 130 what I proposed to say on Amendment No. 131! I echo what has been said. The amendment is not moved.
[Amendment No. 131 not moved.]

  IMMIGRANTS: CUSTODY PENDING DEPORTATION
  IMMIGRANTS: CUSTODY PENDING DEPORTATION
  LIFE PRISONERS FROM JERSEY
  LIFE PRISONERS FROM JERSEY
  BRITISH NATIONALITY ACT 1981
  BRITISH NATIONALITY ACT 1981