Sitting of 30 July 1982

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

  Najat Chafee
  9.35 am
  Mr. Laurie Pavitt: With your permission, Mr. Speaker, and that of the House, I beg leave to present a petition on behalf of one of my constituents, Najat Chafee. I know that it will be heard with your understanding and compassion and that of all hon. Members present. I hope that the right hon. Gentleman the Home Secretary will take a similar attitude. It is a token petition. Ten thousand signatures are being collected, but, because of the rising of the House, it has been necessary to present the petition this morning. 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 residents of the London Borough of Brent, friends of Najat Chafee, and others
  Sheweth,
  That Najat Chafee came to Britain in 1979 following her marriage to Hassain Ghaulan, and gave birth to a child in July 1980,
  That following her husband's consistently violent behaviour towards her she finally left him to live in a Women's Aid refuge, That her husband has now been deported,
  That she would in all likelihood suffer destitution and further violence if she too were deported to Morocco,
  Wherefore your Petitioners pray that Najat Chafee is not deported to Morocco but is given the right of permanent residence in Britain.
  And your Petitioners, as in duty bound, will ever pray, etc.
  To lie upon the Table.

Orders of the Day
Motion made, and Question proposed, That this House do now adjourn.—Mr. Gummer.]
Orders of the Day

  Unemployment (Western Isles)
  9.36 am
  Mr. Donald Stewart: I am pleased and fortunate to have the opportunity of presenting this submission on behalf of my constituents about the extremely serious level of unemployment in my constituency. It has been the sad record of my constituency over a long period—ever since, in fact, records have been kept—that, more often than not, we have been at the top of the United Kingdom unemployment league table. Last year, unemployment in the Western Isles rose fairly steadily from around 20 per cent. in mid-1981 to a high of around 23 per cent. in December of that year. This year started off with an even higher level of 24 per cent. in January. The figure dropped temporarily to 21 per cent. in April, but the May figure showed a rise again to 22Ċ3 per cent. All these figures are non-seasonally adjusted.
  In comparison, the figure for the whole of Scotland fell from 15Ċ3 per cent. in January 1982 to 14Ċ5 per cent. in May. In Great Britain as a whole, the trend was much the same, with a fall from 12Ċ5 per cent. in January to 12Ċ3 per cent. in May. Obviously, the Western Isles is faring badly compared with Scotland and Great Britain as a whole. I am surprised and angry that the Secretary of State for Industry, in the light of these figures, has refused to accord special development area status to the Western Isles.
  The unemployment figure for the Western Isles in July is 24Ċ6 per cent. Male unemployment is 30Ċ6 per cent. These figures are due largely to the closing down of the fabrication yard at Amish Point, Stornoway, and the start of a recession in the Harris tweed industry. That recession will have a further disastrous effect on next month's figures, which I forecast will be in the region of 30 per cent. There are a number of specific areas in which the Scottish Office could assist. I submit these to the Minister. I am grateful to the hon. Gentleman for being present to hear these points.
  An integrated development programme is getting under way in the Western Isles. I hope that the Minister will ensure that submissions from the programme requiring the assent of the Scottish Office will be expedited and any delay eliminated so far as this is humanly possible. I would ask the hon. Gentleman to represent to his right hon. Friend the Secretary of State that he ensures, in EEC discussions on a common fisheries policy, that a 12-mile limit is reserved for the Western Isles and that the fisheries plan of the Western Isles islands council shall have the same consideration as that accorded to the Shetlands plan, which I support.
  If the fisheries in the area were to be given over to the EEC or other countries, to the detriment of the island fleets, this could have a catastrophic effect on employment and on the island community. I have already mentioned the depressing and economically devastating effect of the closure of Lewis Offshore Limited's fabrication yard. We must all hope that this is part of a temporary slack period for these yards and that contracts will again become

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  available in the coming months. Matters are not helped by BNOC's award of a contract to a Swedish yard. Will the Minister intervene with the Department of Energy to ensure that such contracts are confined to yards in this country as far as possible?
  It is remarkable that the Government are showing sympathy for problems south of the border by enabling the replacement order for the "Atlantic Conveyor" to go to an English yard and by relaxing hire-purchase controls for the benefit of the car industry in the English Midlands, while in Scotland the gas pipline is aborted, Corpach has collapsed and the Invergordon smelter has been allowed to die in the cheapest energy area in the United Kingdom.
  Long-term development in the islands cannot be divorced from the necessity for a reasonably economic trade system. Like me, the Under-Secretary of State represents a rural and island constituency, and I do not need to waste time in lecturing him. The Government have made a good start, but I urge the Under-Secretary to proceed to road equivalent tariff at the earliest feasible date.
  Again, I draw the Government's attention to the need for a weighting allowance for Scots, especially for those resident in the islands and remote areas. Figures published in June by the Regional Rewards Surveys continue to show what has been true for many years, that, apart from London and the rich South-East, Scotland is the only area where the cost of living is well above the United Kingdom average. The cost of goods and services in the Western Isles is 16 per cent. above the national average. It is grossly unfair that on certain goods and services on which VAT is payable the already inflated prices require a higher level of VAT to be levied, thus adding tremendous extra cost. I do not expect the Under-Secretary to accept my argument today—although I shall be delighted if he does—but I wish to put down this marker.
  There is another matter in which the Scottish Office can act expeditiously to improve employment in the Western Isles. I have already written to the Secretary of State in support of a plea by Mr. Alexander Matheson, convenor of the Western Isles islands council, about the Manpower Services Commission's community enterprise programme. The council is worried about the delay experienced in obtaining approval for applications submitted to the area board in Inverness in recent months. At present, 40 applications have been made, which would provide 179 places, and other projects are in the pipeline. The projects provide useful amenities and infrastructure, in addition to easing unemployment. I hope that the Secretary of State will take the necessary action to have the outstanding applications approved without further delay.
  9.43 am
  The Under-Secretary of State for Scotland (Mr. John MacKay): The subject raised by the right hon. Member for Western Isles (Mr. Stewart) is very important, and I am glad to have the opportunity to express the Government's anxiety about unemployment in the Western Isles. There is a certain appropriateness, which I am sure is not lost on the right hon. Gentleman, that I should be answering this debate, because I am one of a long line of Conservative candidates who fought in an election in the Western Isles. I remember with much
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  pleasure the three weeks that I spent there and the splendid people whom I met, even though it was in February 1974 and the weather was not at its best. I must say that I do not remember the election result with as much pleasure as the right hon. Gentleman. However, fighting the Western Isles is a good stepping-stone for Conservative candidates, and I am probably the third since the war to have campaigned in the Western Isles and subsequently ended up at this Dispatch Box. One even reached the Chair.
  At present, unemployment in the Western Isles is over 24 per cent. of all employees. As is true of all Scottish unemployment figures, this month the figure reflects the influx of school leavers on to the register. The percentage probably is exaggerated because of the number of self-employed workers in the islands who do not figure as employees. However, I would not attempt to deny that unemployment was a major problem in the islands.
  To some extent, like the rest of Scotland, the islands are victims of the current recession which has brought about an increase in unemployment everywhere in the United Kingdom and the Western world. But a remote rural community such as the Western Isles has unique problems which are perennial. As the right hon. Gentleman said, the unemployment figures in the Western Isles have been higher than elsewhere for many years. The reasons for this are various: the sheer distance from major economic centres; difficult agricultural conditions and a heavy dependence on traditional methods of agriculture; vulnerability to the unpredictable nature of the fishing industry; and the lack of major indigenous industries. They mean that the islanders are keen to welcome an incoming employer and are especially vulnerable if such an employer falls on hard times, as has happened recently to Lewis Offshore Limited, a subject to which I shall return.
  The Government believe, therefore, that an important part of the future of the islands lies in fostering and improving their traditional industries of agriculture, fishing, crafts and tourism, which play a very important part not only in the economy of the Western Isles but in that of the whole Highlands. The local activities of the Highlands and Islands Development Board are aimed at this end, and the recently announced integrated development programme for the Western Isles is designed very much with the object of helping and bolstering those indigenous industries.
  The right hon. Gentleman has argued this morning, as he has before, that the assisted area status for the Western Isles ought to be increased. I must tell him that the Government do not consider just unemployment rates when looking at the grade of assisted area status. Although the unemployment rate in the Western Isles is high, that is not the only factor to be taken into account. In any case, I am sure that the right hon. Gentleman recognises that the real advantage that we in the Highlands have is that as part of the HIDB area we get the best possible package of industrial help from the board.
  The most important thing happening in the Western Isles is the integrated development programme. The regulation set out by the European Council is
  "to improve working and living conditions in the Western Isles."
  Both the Government and the European Community are injecting substantial additional public money into the islands for that purpose to the tune of £20 million.
  With a few exceptions, farming in the Western Isles is a part-time activity, and it is unlikely that the additional

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  incentives to be provided in agriculture will create very many new full-time jobs in that industry. But it ought to generate an increased level of activity, and it should produce an increase in output which will benefit the entire economy of the islands.
  It is expected that the bulk of the £20 million to be provided by the Government will be spent on fisheries and fisheries-related projects. In the programme which the European Commission has approved, it is estimated that grants for landing facilities may total £3 million, grants for fish processing £5 million, and grants for fish farming £1¼ million. If we get the response for which we are looking—the success of the programme depends entirely on the people of the islands taking up the offer that we make—a substantial number of additional jobs will be created.
  Applications will be dealt with as expeditiously as possible. We want the project to be a success, perhaps as a forerunner to putting other cases to the European Community, and a success also for the Western Isles. On the road to that, the project team which will look after the IDP has been appointed already. The statutory instrument laid before the House on 21 July comes into effect on 1 September, as does the fisheries scheme. Anyone who has applied under existing less favourable schemes but who has not yet started work will have the opportunity to defer starting and to seek grants under the new scheme.
  As the right hon. Gentleman knows, the discussions on the common fisheries policy have been taking place for some time. I am sure that he appreciates that the north of Scotland box, which goes as far as the Western Isles, will be to the advantage of fishermen in the Western Isles. The Minch and the important waters between the Western Isles and Scotland will all be well within British limits.
  I said that I would return to the matter of Lewis Offshore Limited. I am very conscious of the impact on the community in Stornoway of the decision by Lewis Offshore Limited to lay off the bulk of its work force and to place the yard on a care and maintenance basis until new orders are secured. Orders for development of Morecambe Bay, of the Rough field and the Beatrice B field are currently coming forward, but at a time when work in the oil construction industry is scarce—not an uncommon phenomenon in a notoriously cyclical industry—competition is exceedingly fierce.
  The Government, through the Offshore Supplies Office, will continue to do all they can to ensure that Lewis Offshore Limited is given the opportunity to compete for orders from the United Kingdom continental shelf, but I must make the general point that it is up to United Kingdom companies, including Lewis Offshore Limited, to come forward with competitive bids for projects. That point is particularly relevant in the context of the BNOC order, which the right hon. Gentleman mentioned, where the successful Swedish bid was considerably lower than that of the British yards. It is easy to say that BNOC should have been directed to place the order in the United Kingdom, and strenuous efforts were made to persuade the corporation in that direction, but ultimately the matter is for the commercial judgment of the oil company concerned. The long-term survival of the United Kingdom oil supply industry—including Lewis Offshore Limited—is entirely dependent on its ability to compete effectively in world markets.
  The right hon. Gentleman and I, with our concern for many islands, are well aware of the impact of shipping
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  costs on the general economy. I thank him for recognising that the Government have given a considerable amount of money in the last three years to support for shipping services in the islands. Support for those services has increased from £5.1 million in 1979–80 to £10.6 million in the present financial year. Indeed, on the west coast it has been possible for Caledonian MacBrayne this year, with the support provided by us, to hold fares and tariffs at the same level as in 1981.
  In addition to increased support to the ferry services, we have extended support to bulk shippers, which is a very important aspect especially of the commercial traffic to the islands. My view, shared by the Government and by everyone in the islands, has always been that the cost of the commercial traffic is the key to the economy of the islands.
  The right hon. Gentleman argued that a cost of living supplement should be paid to workers in the Western Isles. He said that he would be surprised if I conceded. I am sorry to tell him that I shall not surprise him this morning. Local authority employees have such a weighting. Their rates have been negotiated through the National Joint Council for Local Authority Services and are already in their wage rates. They have a distant island allowance of £9.06 a week. It applies to manual workers and a wide range of administrative and professional staff, including the teaching profession. However, it is not for the Government to dictate the rates of pay which should apply to other enterprises in the right hon. Gentleman's area or in that of any other hon. Member.
  Mr. Donald Stewart: I remind the Minister that there is a London weighting allowance which everyone accepts as being justified by the high cost of living in London. My argument is that the same principle should eventually apply in other areas of the United Kingdom, such as the Highlands and Islands and other rural areas where there are special difficulties.
  Mr. MacKay: Obviously, in local authority negotiations the local authorities have been persuaded by the union side that there should be some sort of weighting for the Western Isles. It is up to the employees' side, in negotiations with private employers, to persuade them that a similar weighting should be given to their employees in the Western Isles.
  With regard to the community enterprise programme, I share the right hon. Gentleman's concern about the rising numbers of long-term unemployed in the Western Isles. I think he will recognise that the Western Isles has received very favourable treatment under the community enterprise programme. Compared with other areas with serious problems of long-term unemployment, it has received a relatively high share of the available places. For that I suppose the Western Isles council and the people involved can take a bow.
  At the end of June, the 200 community enterprise places filled in the Western Isles represented 3.1 per cent. of the Scottish total of CEP places, whereas the long-term unemployed in the Western Isles are only 0.4 per cent. of the Scottish total. The figures show that the Western Isles have been very quick off the mark and gained considerably in the initial stages of the CEP. In recent months demand for the programme nationally has been sufficiently high to fill all the available places, and further discrimination in

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  favour of the Western Isles could only have been at the expense of other areas which have equally severe problems and have put in bids for CEP places.
  Earlier this week, my right hon. and learned Friend the Chancellor of the Exchequer announced details of the new community programme scheme which will provide temporary employment for 130,000 long-term unemployed people throughout Great Britain, which is about 100,000 more than under the present community enterprise programme. The new programme will enable more people to participate, both full-time and part-time, in projects of community benefit similar to those at present being undertaken under the community enterprise programme. I am sure that in allocating the resources available under the new programme the Manpower Services Commission will take full account of the new needs of the Western Isles, as of other parts of the country where long-term unemployment is a particular problem.
  The recent news that the Harris tweed industry was having some difficulties is disappointing to us all, because it is one of the traditional industries in the islands and has a splendid export record—about 80 per cent. of its products are exported. The recent redundancy among mill workers is a serious matter for those employed full-time, and the outworkers—the part-timers who produce the tweed and give it its distinctiveness—have lost an important additional source of revenue.
  The industry usually suffers some slackening off at this time of the year. I need not tell the right hon. Gentleman that, because he spent many years working in the industry and knows it much better than I do. I hope that it is a temporary phenomenon. I am sure that he will be able to recall other similar circumstances arising at previous times. We must hope that in the autumn, with the new patterns and designs, the market will pick up, because the industry is important to the Western Isles, not just for the employment in the mills but for the employment that it gives crofters in the islands.
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  Not all the news from the Western Isles is gloomy. For example, on Barra, Ardveenish pier has been completed, and there are good prospects for a fishmeal development on a factory site adjacent to the pier. In Harris, the Lingabay quarry project which will produce armour stone for marine-related construction projects is going forward, with the prospect of 15 new full-time jobs plus other ancillary jobs which will be created as a result.
  Tourist development at Borve Lodge, Harris, has recently been announced by the HIDB and that will also create new employment. The conversion of the lodge to a hotel at a cost of £½ million should be completed in time for the 1983 season and will involve five full-time and 14 seasonal jobs. Individually, these may be small initiatives but, as recent events have brought home to us, small industries which are soundly based and have a long future are perhaps a better bet for the long-term economy of the Highlands than larger glamour industries which can cause problems in themselves and which, if anything happens to them, can cause great damage to the economies in the area.
  I am sure that the right hon. Gentleman welcomes those initiatives, and especially the IDP, although he is always a little reluctant to say so because that would be conceding that the EEC might have something to be said for it. Considerable investment is going into the IDP. I know that he welcomes the help that we have given to the ferry services and our statement that we shall continue along that road, because we recognise that without help to the ferry services the islands' economies would be in great difficulty and danger.
  We are doing our utmost to help with the difficult long-term problem in the Western Islands. I very much hope that people will come forward as quickly as possible and that the IDP gets off the ground, to the benefit of the farming industry in the Western Isles, to the benefit of the fishing industry, and, of course, spinning off from them, to the benefit of the whole community.

  National Health Service (Scotland)
  10 am
  Mr. William Hamilton: I have extra time, and I greatly welcome it. The Under-Secretary of State for Scotland should be prepared to wait for a fairly lengthy speech, because the subject is of great importance to the future of not only the nursing profession but all the other professions and workers in the Health Service. Indeed, the principle of the Health Service is at stake.
  On Thursday 15 July, in answer to a question from the hon. Member for Cheadle (Mr. Normanton), the Secretary of State for Social Services gave a written answer, printed in column 458 of the Official Report, about the effect on health services and staff numbers in the National Health Service following the Government's recent decisions on pay. It was a planted question, which enabled the Secretary of State to give a detailed reply without being subjected to a grilling in the House. It was clear from the answer that the Government were cutting the cash given to regional health authorities to enable them to carry out their responsibilities. It was also clear that the Government were determined to reduce staff levels in the Health Service.
  The answer made a mockery of the Prime Minister's answers at Question Time yesterday, when she said that Health Service workers had great security of employment. She said that a few days after the Secretary of State had warned the regional health authorities that they must reduce staff. That was the clear implication of the written answer. The written answer from the Secretary of State makes the right hon. Lady's claim ring fairly hollow.
  It was also clear from the Secretary of State's written answer that he could Snot get Cabinet support to allow the pay increase offered to nurses to be met by the Treasury in the next two years. The consequence of that will be that pay awards will have to be met out of the strictly limited funds that are available to the regional health authorities. Cuts in staff, cuts in services to patients and cuts in hospital building will be a direct consequence of that written answer. There will be a decline in the quality of services provided to patients as a result of that answer and the circular that was sent out to the regional health authorities.
  The Secretary of State also gave detailed figures of the cash to be available to each of the 14 regional health authorities in England. There were revised and reduced allocations of cash for 1982–83, plus provisional assumptions for each of the next two years. The Minister also told the authorities that he had issued planning assumptions to the regions for the years 1983–84 and 1984–85, asking them to produce plans covering the next two financial years in the light of those provisional assumptions. He said that copies of the Department's circular on those matters had been placed in the Library. In other words, details of the proposed cuts affecting the regional health authorities were placed in the Library on 15 July.
  On Friday 16 July a further statement was made in the House by the Secretary of State, which was not directly related to his previous day's answer, but was about the threat of industrial action then being made by the Health Service unions. As a consequence of that statement the Secretary of State had a roasting in the House for about half an hour.
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  In the exchanges on these matters with the Prime Minister in the House yesterday, reference was made to Mr. Albert Spanswick, the general secretary of the Confederation of Health Service Employees, in fairly scathing terms about his threatened increased industrial action, which, it was alleged by the Prime Minister and her colleagues, would jeopardise the well—being of patients in the Health Service. I am sponsored by COHSE. Mr. Spanswick is a personal friend of mine. I know all the officials of COHSE and large numbers of the members of that union. They need no lectures from the Prime Minister or from any Tory Minister or Tory Member of Parliament about the importance of safeguarding the health and welfare of the patients in their care. Many of them have given a lifetime of service, underpaid and overworked, to the National Health Service, and it ill-becomes the Prime Minister or anyone else to chastise them for their action.
  Mr. Kevin McNamara: Is not my hon. Friend's case underlined by the vigil that is taking place beside the Pankhurst statue adjacent to the House of Lords, where four nurses from Hull are giving up their leave time to keep a vigil merely to point out the desperation of the position of all Health Service workers and their desire only that the matter go to arbitration, and no more than that?
  Mr. Hamilton: My hon Friend and his colleagues introduced me to those ladies yesterday. They are gentle and unmilitant nurses who have been driven to this action by the meanness and callousness of the Government. The responsibility for any inconvenience that may be caused to patients in the Health Service lies exclusively at the door of the Prime Minister and her Ministers, who have driven the Health Service workers to this position. I shall return to that matter in detail later in my speech.
  I return now to the statement made by the Secretary of State on 16 July. On that day, although my hon. Friend the Member for Pontypridd (Mr. John), the shadow Secretary of State for Social Services, was in the Chamber, there was no Scottish Minister present, although the dispute affects Scotland just as much as it affects any other place. I made inquiries in the Library to find out whether a circular on these important matters had been placed there by the Scottish Office. None had been and, so far as I know, that is still the position today.
  I asked the authorities in the Library to contact the Scottish Office on this matter. The note dated 29 July that I received from the Library states:
  "No similar circular to the one sent to the English regional health authorities has been sent to Scottish authorities. Last night, a letter was sent to Scottish health boards giving revised allocations, but there are no copies of this letter in London yet—according to the Scottish Office in London."
  As I am sure the Minister will concede, the Library is a very reliable source. That is further evidence to support the view that the Government treat the House with much contempt and indifference.
  I have given the Minister notice of some of the questions that I now intend to ask. Others will be asked in due course. The questions of which I have given him notice will be put in slightly different terms, because of the developments to which I have already alluded.
  Will the hon. Gentleman now say what revised revenue allocations have been sent to the regional hospital boards for 1982–83? Have those allocations been revised as a direct consequence of the Government's so-called final

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  pay offer to the nurses and ancillary staffs? Has the hon. Gentleman asked the health boards to revise their staffing plans this year and in subsequent years so that they can better pay their share of the increased pay offer? If that is so, what staff reductions does he expect from the health boards? Will they amount to an overall reduction of 5 per cent., 10 per cent. or more?
  In line with his counterpart south of the border, has the Minister sent planning assumptions to the boards covering the next two financial years? What proportion of the total wage increase offered to the nurses and ancillaries will have to be met by the boards from their own resources? What does that amount to in both percentage and cash terms? Will that affect adversely the quality of the services provided? There can be no doubt that the greater the amount that must be found for wage increases out of the Government's reduced allocations to the health boards, the more the deterioration in the services provided.
  I should be grateful if the Minister could quote the Fife figures. I have been in touch with the health board in Fife, but as yet have received no detailed information. That is understandable, and I do not complain about it. If the Minister cannot give the figures today, perhaps he will do so in writing.
  As the Government claim that no more money is available for nurses' pay, how can cash be found to pay the police another 10 per cent. this year? I believe that the Secretary of State is in Scotland this weekend discussing this matter. However, there can be no doubt that the police will get 10 per cent., whereas the nurses, who as members of society are just as important and make an equally important contribution to our welfare, will have to be satisfied with 7 per cent. Why should that be so, bearing in mind that nurses and ancillary staff have been treated more meanly than either the police or the Armed Forces during the last three years?
  The Minister should know that many nurses, particularly nurses in residence, will be worse off, net. They will be taking home less pay as a direct result of the so-called pay increase. The Minister must know that student nurses in particular, but also ward sisters, will be worse off in money terms after they have paid increased lodging allowance. Where is the justification and fairness in that?
  I have with me the pay slip of an NHS storeman, who after 26 years' service takes home £45 a week. He could get more on the dole or on supplementary benefit. This is sweated labour, which occurs throughout the Health Service and affects nurses, ancillary staff, ambulance men, storemen, part-time cleaners and everyone else.
  In the last few weeks I have received many letters on the NHS pay problem, not only from nurses, but from physiotherapists, radiographers and other employees of this great public service. A physiotherapist from Lochgelly states:
  "I wish to bring to your attention the deterioration in salary of physiotherapists employed in the NHS. In real terms what we are being offered as an increase is a pay cut—8 per cent. below the rate of inflation—and this for the third year running."
  In each of the last three years these worthy citizens and conscientious workers have had their standard of living cut. That physiotherapist ends her letter:
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  "Please note that more and more of us feel that we are treated unfairly simply because of our reluctance to take action which would harm patients. It is deplorable that this dedication to the sick should be taken advantage of by the Government."
  That is not a letter from a member of Militant Tendency or the Communist Party. It is from a gentle woman doing a service to the community.
  I have received another letter from the Society of Radiographers, which is not noted for its militancy. It states:
  "It is logically, economically and morally indefensible that our members, along with other NHS employees, should suffer poor living standards in order to retain a national health service. The Society very much regrets the industrial action currently being taken but feels that the Government's attitude towards employees whose commitment to the Service and normal reluctance to take industrial action has provoked this situation."
  Those statements do not come from revolutionaries, people who want to stir up trouble or people who want to harm patients in their care. They come from people who, in desperation, have been driven to the measures that they are now taking.
  The Government's assertion, which the Minister repeated on 16 July, is that
  "there is no more money".—[Official Report, 16 July 1982; Vol. 27, c. 1281.]
  The cost of meeting the NHS pay claim in full would just allow employees to maintain their existing standard of living, given that inflation is about the same level. It is said that it would cost an extra £380 million, but that is far less than the cost of replacing the ships lost in the Falklands Island adventure. There is no doubt that the Government will find the money for that. They will not say "We cannot afford it". there is no question of the Government telling the Ministry of Defence "There is no more money". The Government are saying that the money will be found. When the Prime Minister found herself in the Falkland Islands mess, she proclaimed almost within seconds "There is no limit to what we shall spend on the Falkland Islands". Although the Minister has challenged my figure, I wager that when the full bill is paid for the Falkland Islands it will be not less than £1,000 million, and probably much more.
  Mr. McNamara: Will my hon. Friend accept that the Prime Minister did not find herself in a mess over the Falkland Islands? Does he agree that she made the mess?
  Mr. Hamilton: We shall return to that issue in due course, but not in this debate. Whatever caused the mess, we were in it. The Prime Minister declared that we would find the money. When she was saying that, Health Service Ministers were bleating that there was no money to pay nurses, physiotherapists, radiographers, cooks and ambulance men a living wage for working to save life rather than to destroy it.
  Whenever I participate in debates of this sort, I have with me a copy of the Defence Estimates. On page 11 of the 1982 Estimates there is a short list of the projects on which we are embarking or on which we have already embarked. The estimated programme costs of the Harrier GR5 offensive support aircraft are £900 million. The estimated cost of the new heavyweight torpedo is £775 million. I am a member of the Public Accounts Committee, and I know that the new heavyweight torpedo is in addition to the new lightweight torpedo, Sting Ray, which has cost us £1,000 million. There are half a dozen or more projects in that range of expenditure. Let no Minister tell me, anyone who works in the Health Service

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  or anyone who enjoys the service of the NHS that there is no money. There is plenty of money. What is wanted is the will to redistribute it between one Department and another.
  The Government have already announced that they are determined to go forward with the expenditure of £7,500 million on Trident. To claim that there is no more money is a rather hollow protestation. The Government are really saying that they have made deliberate policy decisions to spend more of our scarce resources on military weapons of destruction and that because of those decisions there is less money available to spend on a life-saving service like the NHS.
  It is a crying shame that the least militant and probably the most dedicated group of workers in Britain—those employed in the NHS—should be admired so much by so many and paid so little for so long. They have been driven to the action that they are now taking, which Ministers and Tory Members of Parliament are exploiting as ruthlessly as they can.
  On 16 July the Secretary of State spoke about his visit to St. Thomas's hospital a day or two before. He said that
  "at St. Thomas's hospital … As a direct result of industrial action, more than 1,000 operations have been cancelled and cancer patients among others are now waiting for treatment"—
  [Official Report, 15 July 1982; Vol. 27, c. 1283.]
  We could almost see his heart bleeding for those people. The fault lies at the door of the right hon. Gentleman who shed those crocodile tears on behalf of patients at St. Thomas's hospital.
  If the Government were to face this problem with the same enthusiasm, determination and generosity in using taxpayers' money as they showed in the South Atlantic, the matter could be resolved overnight. That does not happen because the Prime Minister and the Government—the right hon. Lady especially—do not believe in the basic principle on which the NHS was based. The principle was that each citizen should get the health treatment that he required irrespective of his means. That is a form of practical Christianity and practical Socialism which the right hon. Lady neither understands nor likes.
  Mr. Selwyn Gummer (Lords Commissioner to the Treasury): Disgraceful.
  Mr. Hamilton: I agree that it is disgraceful, but it is true. It is disgraceful that the right hon. Lady should take such an attitude, but it is true that she does. She even described aid to the Third world as handouts.
  All the evidence shows that the Government are swinging the pendulum as far as they can towards the extension of private provision for health services. We see private hospitals being erected all over London. They have reached Glasgow, and they are going more and more to Scotland. Less and less provision is being made for the Health Service. Low pay is driving Health Service workers into the private sector. The present strife in the Health Service concerns pay, but more importantly it concerns the future of the service itself. That is what the debate is about and I wish that more Members were present to hear it. However, we shall hear more of these issues in the next few months and years.
  The British people regard the Health Service as one of the supreme examples of social progress since the end of the Second World War. They will fight to the death to preserve it, and so will we. When the Minister replies to the debate, I hope that he will give some assurances that
  1462
  the Government will reverse the machine that they have put in operation. Almost daily we see abuses of the Health Service by private practice in Scotland, and to a much greater extent in England. If more resources are put into the NHS, the problems will be resolved.
  The Scottish Office must not turn its back on the nurses and other Health Service workers after saying "You had better be satisfied with the existing offer that is on the table." They will not be satisfied with that. I shall be taking part with them in continued industrial action, because we care for the Health Service and the patients in it. We shall not see it destroyed by the present Government, or any other Government.
  10.29 am
  The Under-Secretary of State for Scotland (Mr. John MacKay): Perhaps it is a pity that I did not spend longer on the previous debate because the hon. Member for Fife, Central (Mr. Hamilton) might have shortened his speech. The longer that he continued, the more damage he did to his case. However, I accept that the hon. Gentleman is once again demonstrating his well-known interest in the National Health Service and the pay of its workers. This is the second Adjournment debate on National Health Service pay in 10 days and it gives me the opportunity to state clearly the Government's view on the 1982 pay round at the end of the Session, so that during the recess Health Service unions are not tempted to assume that the absence of parliamentary statements means a weakening of the Government's position.
  The Government have gone some way in providing additional resources aimed at securing pay settlements in the NHS, which makes sense, against our need to keep public expenditure under close control as a key part of our economic strategy. Wages account for no less than 75 per cent. of the expenditure of Scottish health boards. It added up in 1981–82 to £850 million. That is the Scottish figure alone. The offers made in recent weeks by the management sides of the various Whitley councils ranged from 6 per cent. to 7Ċ5 per cent. for nurses and professions supplementary to medicine. The offers represent money on the table payable from last April. If the unions would return to the negotiating table and accept the pay offer, the increase will be paid as from 1 April 1982. The offer compares well with other public sector settlements—5·9 per cent. for civil servants, 6 per cent. for teachers and 6·1 per cent. for the Armed Forces.
  We are subject to constant criticism that the increases offered are not fair. I believe that they are reasonable in our present economic circumstances and they are comparable with other increases in the public sector. Local authority workers could be added to the group that I mentioned. The offer is certainly comparable with wage increases in the private sector, where many people have received increases of no more than those on offer. In some cases there have been no wage increases. The constituents of every right hon. and hon. Member know that what I am saying is true.
  The Government are in no position to be constantly bid up on the matter. We have made no less than £25 million available for additional pay increases in Scotland—£16 million from central Government and £9 million from the allocations to the health boards. In 1982–83, the health boards are receiving £18 million more than in the previous financial year to allow for the expansion of the service. Those are large sums, but there should be no

  1463
  misapprehension that the Government have more money tucked away to meet the 12 per cent. claim. As my right hon. Friend the Secretary of State for Social Services emphasised, we cannot provide more money to improve the offers which, by present standards, are reasonable and realistic.
  If one listened to the end of the hon. Gentleman's speech, one could be forgiven for believing that the Government spent less on the National Health Service than the previous Government, of which he was a supporter. I must remind him that we are spending more this year on the National Health Service than has ever been spent. Our commitment to the NHS is clear and can be seen from the figures. In Scotland, in 1978–79, £646 million was spent via the health boards on the hospital-based service. The sum envisaged for this year is £1,176 million. One does not need a pocket calculator to work out that that is a significant increase and the continual suggestions that we are downgrading the NHS are made in blind ignorance of simple arithmetic.
  We walked down, as I could have predicted, the Falklands road. Before Labour Members suggest that we should not have spent that money defending the Falklands and restoring freedom to the people, may I tell them that those in my constituency who came from the Falkland Islands said that their freedom was worth defending. It is indivisible from our freedom, but that is another argument. Every time that I hear a Labour Member talking about public expenditure, the same £1,000 million supposedly spent on the Falklands is spent today on the Health Service, yesterday on something else and the day before on yet another item. It is the most elastic £1 billion that has ever been spent by a Government. Labour Members should get together and decide their line before they continue to spend the money in other ways. They must square it with their hon. Friends and many of their supporters, who believe that the money was well spent.
  The hon. Gentleman asked me whether I had issued revised reserve allocations to the health boards for 1982–83 as a consequence of the Government's final pay provisions announced on 23 June. I have done that now. The Scottish Office informed the health boards on Wednesday of their 1982–83 revenue allocations that take into account the most recent pay offers. Copies of that letter have been placed in the Library together with the figures that accompany it. The table shows that the revision takes into account the reduction in national insurance payments because of the reduction in surcharge announced by my right hon. and learned Friend the Chancellor of the Exchequer, the increased allowances to the health boards for the first stage of the negotiations and the revised cash limit total for the Health Service in Scotland of £1,776 million. Fife will be given about £659,000 extra for the wage settlement that is currently on offer. That is out of a total budget of nearly £56 million, which is Fife's revised cash limit allocation for this year.
  The hon. Gentleman asked me whether we have asked the boards to revise their staffing plans for the rest of the financial year. We have not done so. The Department of Health and Social Security asked its local health authorities to devise staffing plans in their regions. We work rather more directly with the providing authorities and have not felt it necessary to call for individual plans, because the size and expenditure of the Scottish boards
  1464
  vary widely. No specific rules have been laid down to help boards, but they must examine staffing as well as other expenditure within the context of their new allocations.
  There is another figure that is greatly at variance with the theory that the Government are running down the Health Service. Since the election, we have employed about 5,000 more nurses and midwives in Scotland, which once again shows our commitment to that service. The hon. Gentleman asked me by how much I expect the health boards to reduce staff in the current year and what my targets are. I have no such expectations of the health boards. No targets have been set for the boards. They must meet their part of the pay settlement out of the revised allocation. That is £9 million, out of a total allocation for Scotland of £1,176 million, which is a small percentage of that large sum.
  I was asked whether I had issued planning assumptions to the boards for 1983–84 and 1984–85. I have not done so. The DHSS felt it necessary to provide such assumptions for its regional health authorities, but the Scottish Office deals with the basic authorities and is reviewing the future resources available for NHS expenditure.
  It is too soon to arrive at a sudden decision about the operation of the SHARE arrangement—Scottish health services allocation of resources—for 1983–84 onwards which, as the hon. Gentleman knows, is an arrangement that was started by the last Government and continued by this Government to try to equalise the amounts of money that go to the different boards in Scotland.
  Health boards in Scotland have been asked to produce by the autumn priorities and programmes in response to the SHARE report in Scotland. That report asks them to plan the direction in which they see the service going. As the hon. Gentleman knows, we have particularly pointed out demographic changes such as the increase in numbers of elderly people which we feel the health boards must take into consideration when planning future services.
  The hon. Gentleman asked me what the total burden of the final wage offer was expected to be for the health boards. I have already answered that, but I emphasise that £9 million is required from the health boards themselves. That is less than 1 per cent. of the money that will be given to the boards this year. Different authorities will be affected in different ways. It may be that those that are only likely to receive a small increase under SHARE will have to review existing staff levels. Others may have to reconsider future increases. It is for each board to assess its circumstances and how the cost of the pay settlement will affect its development plans and prospects.
  I was not surprised to be asked about the police. Negotiations on police pay have not yet begun. The police negotiating board adjourned until 5 August in order to enable the official side to clarify certain points on the future levels of local authority funding.
  The hon. Gentleman made much play of the number of nurses in residence whom he claimed would be worse off as a result of the 7.5 per cent. increase. There are four categories of lodgings used by nursing staff and the charges are graded accoring to their standard and amenities. Only a small minority of nursing staff live in such accommodation. It is estimated that about 10 per cent. of the total staff do so. Those students and learners who live in qualify for a reduction of 40 per cent. of the standard charge.

  1465
  An agreement was reached in 1981 with the staff side for a staged increase in charges towards realistic levels related to the cost of providing accommodation in place of the old system in which, as the hon. Gentleman knows, the charges for accommodation were related to salary. It was envisaged that the full realistic charge would be implemented in four stages. The first stage has already been implemented and the second is due to be implemented from 1 April 1982. However, the new charges will not be implemented until the 1982 pay agreement is settled.
  It is not possible to argue that all nurses quoted will be worse off after the increase of lodging charges. I have requested some figures. If I take a typical nurse who lives in, probably a first-year student, her existing salary of £63 a week would be increased by £4Ċ73 with the 7½ per cent. pay award. The second stage increase on her lodgings for this year would be £2Ċ07. By anybody's arithmetic, that does not come to more than the increase that she would receive on the 7Ċ5 per cent. As I said before, only 10 per cent. of nurses pay for living-in accommodation. The remainder of the nursing staff pay for their accommodation as other people do.
  Mr. Albert McQuarrie: My hon. Friend said that the second stage would come into effect on 1 April 1982 but that it would not be operative until the pay settlement had been reached. Will the charge that should be made on 1 April 1982 be backdated once the increase has been approved or will the nurses pay the increased charges only after the settlement date?
  Mr. MacKay: The charges should have come into effect on 1 April 1982. In fact, they will not come into effect until the settlement has been argreed. There is no question that arrears will be recovered for the current financial year in advance of arrears in salary being paid. I hope that that answers my hon. Friend's question.
  The hon. Member for Fife, Central asked about the storeman with 26 years' service. It is difficult to answer such individual questions because many other matters must he taken into account, such as whether a person is single, because that would affect the tax that he pays and consequently his take-home pay.
  Many of the figures that are given are highly selective. I do not complain that the unions do that. I expect them to be highly selective because it helps their case. The basic pay of the vast majority of full-time workers in the Health Service is more than £60 gross per week. The earnings of many employees, especially ancillary staff, are enhanced well beyond that level by overtime payments, incentive bonus allowances, unsocial hours payments, and so on.
  The gross earnings of a full-time male ancillary worker average out at £104 a week. That inevitably means that, while some are receiving more than £104 a week gross, others will be receiving less than that.
  Mr. William Hamilton: The Minister is being selective.
  Mr. MacKay: I am not being selective in the average. The average is the average. There is no selection in that figure. The average is £104 a week, and even a basic knowledge of arithmetic tells one that one does not select when one computes an average. All the wages paid are taken into account.
  The Government have ultimate responsibility for deciding levels of public expenditure. They cannot hand
  1466
  over the responsibility for that decision to another body to allow it to arbitrate and perhaps to come to some compromise decision which will pay out more than the Government judge the country and the Health Service can afford. That is the position on arbitration.
  Mr. McNamara: How does the Minister justify that principle against other public sector claims that have gone to arbitration?
  Mr. MacKay: Each group must be taken on its merits and its background. The Government have offered a large sum of money to the nurses and other ancillary workers in the dispute. The Government's duty is to make difficult judgments and we judge that neither the economy nor the Health Service can afford to pay more in salaries than the extra money that we have put on offer.
  National Health Service pay negotiations are neither simple nor straightforward. In Britain the National Health Service has about 1 million employees with a wide variety of skills and experience, all of which are required to run a modern and successful Health Service. We must make every effort to avoid damaging the interests of patients and causing distress and suffering. The unions' continued action is undoubtedly causing serious damage in Scotland and other parts of Britain.
  There are many examples of actions by small numbers of workers in hospital laundries that are seriously curtailing the supplies of clean linen to hospitals. Glasgow has been one of the worst affected areas in recent weeks. A fortnight ago I visited the Yorkhill and Gartnaval hospitals and saw at first hand the effects on patients and on nursing and other staff who are striving to maintain a decent standard of care. Patients are having to manage with paper sheets on their beds day after day. Staff cannot change the linen as often as they would wish. In long-stay hospitals the lack of clean clothing has meant that patients must be kept in bed all day. Linen supply problems hit hardest the hospitals for the elderly and the mentally handicapped, because many of their patients are incontinent.
  No one can argue that disruption of laundry work can be consistent with the aim of respecting patients' dignity enshrined in the unions' guidelines. I leave it to the House to imagine the effect of piles of contaminated laundry lying around hospitals during the recent spell of warm weather. There are not only piles of contaminated laundry but polythene bags with varying kinds of waste, including hazardous waste, piled up in the corridors of hospitals. That is not the way to run a health service.
  The unions make much in public of their wish not to hit essential services and accident and emergency care, yet throughout the dispute there have been examples of all catering staff walking out of hospitals and leaving management to cope as best they can with feeding patients, using nurses and other volunteers to prepare and distribute food.
  Occasionally, for example at Hairmyres hospital, it proved necessary to appeal to relatives and friends to bring in food for patients during the union's day of action. No one can argue that the unions are not interfering with essential patient care. They have forced the cancellation of routine admissions and the postponement of out-patient clinics. In addition, pickets have delayed the flow of mail between general practitioners and hospital consultants. It is not just a statistical probability that some patients will

  1467
  suffer from the delay in diagnosing and treating serious illnesses: it is a certainty. Many patients waiting for such operations as hip replacements are having to wait much longer than they should.
  The other day I met one of my constituents whose admission to hospital was long overdue. He was not over-sympathetic to the unions' case, because it had led him to wait an unnecessary length of time. In the NHS, any form of so-called industrial action is bound to affect the health and well-being of those who are acutely ill, the elderly and the handicapped in need of hospital care. It is no use the unions trying to pretend otherwise.
  Fortunately, most nurses and many other NHS workers have continued to put the interests of their patients first and have not taken part in the strike action or in the walkouts. Many of those staff have taken on work that far exceeds their normal duties in the attempt to sustain services to patients. We all owe them the greatest respect, because they have upheld the finest traditions of caring for the less fortunate in our society.
  At this stage in the parliamentary Session, perhaps I might conclude by quoting from paragraph 5 of our circular to the Scottish health boards:
  "I should emphasise that the Government does not propose to depart from the pay settlements now on offer and will not make any further resources available towards their costs."
  I do not know how many times my right hon. Friends and I will have to say that—
  Mr. William Hamilton: Disgraceful. Shame.
  Mr. MacKay: I do not know how many times we will have to say that before the unions will return to the negotiating table and negotiate within the amount of money available to settle the dispute. Let us get the Health Service back on the road so that the greatly increased sums that the Government have invested in the NHS since the last election and the increased staff that have entered the Health Service in the past three years can be put to the proper work of attending to patients and seeing to patient care.

  Interest Rates and Debt
  10.51 am
  Mr. John Browne: I am grateful that my subject has been selected for an Adjournment debate and that I now have the opportunity to make the speech that I was unable to make when the business of the House unexpectedly collapsed about three weeks ago. Also, I thank my hon. Friend the Minister for having given up his valuable time to attend the debate.
  I should declare an interest, because I am a director and adviser to companies within the United Kingdom's financial and banking industries. However, although I am associated with the United Kingdom's financial system, I shall not speak on behalf of any interested groups of people, and in formulating my speech I have not consulted potentially interested parties.
  The United Kingdom's financial system is a vital part of our national economy in which it has played and continues to play a most important role. Indeed, the health of our economy is inseparably linked to the health of our financial system. As an international trading nation, both our financial system and economy are dependent on United States interest rates, on trends within the American economy and on the health of international financial markets. The serious and adverse pressures now being exerted on American interest rates, on the American economy and on international financial markets should cause grave concern to us in Great Britain. Our financial system is greatly affected by, and has to exist as part of, the international financial system.
  In addition to the problems of past stagflation and the current deepening recession, the international financial system faces two new and major challenges. First, it faces the prospect of continued high, and even higher, American interest rates. Secondly, it faces the problems of Third world debt and the increased chances of major formal defaults. In short, the international financial system now faces serious threats not merely of illiquidity, but of insolvency. It is vital that we should not shrink from facing those problems. Indeed, it is our duty to face them and to prepare to deal with them.
  I am particularly concerned that these outside threats affect the United Kingdom's domestic financial system. I shall press my hon. Friend the Minister for safeguards to ensure that our regulatory authorities are ready and equipped, both legally and financially, to deal with those potential problems.
  The American economy is the largest and most influential in the world. The American dollar is the most widely-held and important currency, and American interest rates obviously affect us all. We are living at a time not only of historically high American interest rates, but of great volatility in them. That volatility is due largely to the American system of monetary-base control. However, international markets are constantly taken aback by the continued high and upward trend in American interest rates.
  Naturally, I agree that very few trends occur in straight lines and any downturn in American interest rates—such as that experienced earlier this week—are eagerly read in the markets as a signal of a major downturn in those rates. Why are markets so keen to read a major change in the upwards trend of American interest rates? Obviously, massive profits can be made by those who pick the turn

  1469
  in a major trend in interest rates, and at these historically high dollar rates fortunes could be made if the turn was picked correctly.
  However, my main contention is that the market and the media are focussing on the wrong basic figures. Today, the market perceives the size of the United States federal budget deficit as the main influence on American rates. There are, of course, other influences such as relative inflation rates, commercial demand for US dollar oil payments, tight money policies and so on. Nevertheless, it is generally believed that the main influence in the market place is the size of the American budget deficit. That deficit is generally believed to be a staggering $100 billion for the fiscal year 1983, having doubled during the past 12 months. In other words, the declared figure has increased from under $50 billion to more than $100 billion over the past few months.
  I submit that the present American interest yield curve reflects that perceived deficit of about $100 billion. The devastating point is that if one looks not merely at the publicised deficit but at the detailed figures deep within part IV on page 10 of the American budget statement for the fiscal year 1983, one finds that the real—as opposed to the apparent—American deficit is at least twice that figure, or $200 billion. If all off-balance-sheet items are included, the figure is probably three times the presently perceived American deficit.
  If today's United States yield curve is based on an apparent Government deficit of $100 billion, we must be greatly concerned as to what the yield curve would look like if it were based on the true American budget deficit of between $200 billion and $300 billion. I submit that uncertainty over the trend of American interest rates has been due largely to the fact that the financial markets and the media have wanted to believe that American rates would fall. That belief stems from the fact that, while many are able, few people have actually looked at the source figures for the American deficit. For the benefit of the House I shall illustrate what I mean by the real numbers, as they pertain to the American deficit.
  Of course, I appreciate that there are no hard numbers in national budgeting—the figures are constantly fluctuating—but these are, to coin a phrase, the real, soft numbers. All of them are based on publicly available information in the United States of America. I shall cite the "Economic Indicators—May 1982" which was prepared for the joint economic committee and published by the Council of Economic Advisers of the ninety-seventh congress, second session. I refer particularly to page 32. I refer to "Special Analysis E on Borrowing and Debt" published by the Office of Management and Budget 1982, page 35; "Appendix to the Budget for the Fiscal Year 1983" part IV page 10; and "Special Analysis F—Federal Credit programs. The Budget of the United States Government 1983"—published by the Office of Management and Budget February 1982—pages 24 and 25.
  I have taken the figures out of those books, and particularly from the references that I have given, which are based on February 1982 United States budget data with congressional revisions to June 1982. If one rounds them up for speed and simplicity, one could say that the actual United States federal deficit is not $103 billion as openly declared, but at least $211 billion with estimated allowances for it to go up to a possible $345 billion.
  1470
  I have taken the regular United States budget deficit as published at $103 billion—although I hope to show later that even that figure is conservative and is beginning to be seen as such in the international press—and halve added three more key figures. First, if we take the net off-balance-sheet federal entities of about $19 billion we bring it up to about $120 billion. If we add the net federal guaranteed Government borrowing of entities such as the federal financing bank, federal guaranteed loans and national mortgage association, we add a further $44 billion bringing the total to about $164 billion. If we add the net borrowings of Government—sponsored enterprises—a further $47 billion—we have a total deficit of $211 billion.
  Worse still, the conceptual figures that are openly written into the budget published by the United States Office of Management and Budget show a discrepancy of no fewer than $345Ċ7 billion between the estimated total of federal and federally assisted borrowing for the fiscal year 1983 of $1Ċ473 trillion and the gross federal debt or statutory debt ceiling of $1Ċ127 trillion.
  As I said, I took the base figure of the regular budget deficit at $103 billion, but recent press reports have begun, at last, to show that this figure is somewhat conservative. In the Financial Times of 28 July there is an article by Anatol C. Kaletsky, in Washington, showing that the United States budget deficit in 1983 is likely to be between $141 billion and $151 billion, and the deficit for the next two years will remain in the region of $145 billion and $160 billion. That is corroborated by the International Herald Tribune, which published a report on the same day. The congressional Budget Office on the Tuesday preceding 28 July said:
  "That budget deficits could reach a minimum of $140 billion for each of the next three years, far above even the revised estimate of the Reagan administration."
  Then we see in the Financial Times of 29 July:
  "The US Treasury announced last night that it will need to raise a record $50Ċ5 bn during the third quarter of this year.".
  It is interesting that, on an annualised basis, this reaches the $200 billion mark.
  Some people argue that those American figures have been doctored for political reasons, and that the Office of Management and Budget published deliberately high figures in order to alarm and so persuade the American Congress to cut back on federal spending. I find it not only unrealistic but outrageous to suggest that the American Government would deliberately publish misleading figures in their budget. That argument should therefore be discounted. Other people say that the United Stales Government can take corrective action to lessen their deficit. I agree with that in the long term, but what about the short term? The International Herald Tribune of 29 July said:
  "President Reagan has determined that he should not have to adhere to the ceilings on military spending for 1984 and beyond that were imposed by Congress with White House blessing last month".
  That means that President Reagan is most unlikely to cut back on military spending.
  The present United States interest rate structure tends to reflect, among other things, the perceived United States deficit of about $100 billion. However, I hope that I have illustrated that the United States deficit is actually between $200 billion and $300 billion. When that becomes apparent, surely it can be expected that United States interest rates will rise

  1471
  Naturally, many people in the United States of America feel that it would be political suicide for the Republicans to go for a mid-term election with interest rates at their current levls, let alone at higher levels. They believe that American politicians will reduce interest rates for political reasons. That assumes, of course, that it is possible for the American Government to reduce interest rates even with the co-operation of the Federal Reserve Board. Those who believe that it is possible point out that President Reagan could delay his proposed tax cuts for one year, raise the age limit for entitlement to certain social benefits and even cut defence expenditure and raise more taxation.
  I have dealt with the possible cuts in defence expenditure, which appear to be unlikely. Even if it were possible to do any of those things, it is estimated that the total yield of all those possible actions would be only between $40 billion and $70 billion, or less than one-fifth of the upper estimated United States Government deficit for 1983, which starts on 30 September 1982—in two months' time.
  This all leads me to the conclusion that the American debt deficit is effectively out of control, at least in the short term. Furthermore, if the American interest rate structure is currently influenced most heavily by the size of the deficit, then American interest rates are effectively out of political control in the short term. Therefore, they are likely not only to stay high, but to rise during the next six months to one year.
  I believe that whilst few events such as interest rate movements follow straight lines—there are fluctuations—there will be no overall, upward trend in United States interest rates in the short to medium term. The effect of continued high interest rates will be to exert upward pressure on other international interest rates including sterling. The result is likely to be that the recession being experienced in the United States economy will deepen. That will adversely affect the economies of other trading nations. The recession in the United States economy is already causing serious strain in its financial community. Over 300 American financial institutions are currently under supervision, and conversations with American bankers show an alarming level of potential bankruptcies among United States corporations, even large ones, some of which are experiencing serious difficulties.
  The other main threat facing the international community, of which we are an integral part, is the risk of major loan defaults.
  Unlike the Korean war, which was financed by tax revenues, the American Government financed the Vietnam war by means of deficits. It was these massive United States dollar deficits that caused the considerable growth in the Eurodollar market or the market in United States dollars held by non-United States citizens. The oil hike, begun in 1973, added greatly to this growth of the Eurodollar market following the OPEC demand that oil should be paid for only in United States dollars. The result was a massive accrual of United States dollar deposits with Western banks. At the same time Third world countries needed more money for development because of inflation, and to pay for greatly increased oil import costs.
  Furthermore, as industrial growth fell off in the Western world in the 1970s the demand for corporate loans began to ease in the Western economies. It was, therefore,
  1472
  tempting for Western bankers to pursue loan mandates in the Third world and to participate in syndicated lending to the Third world.
  Most of the weight of petrodollar recycling was, therefore, carried out by commercial banks rather than by development banks which, because they are Government owned, with an access to a tax base, are assured of continued solvency. The route that the recycling should have taken—through development banks to sovereign borrowers—was a proven and solvent route, but, for some reason, the petrodollar recycling went instead through the commercial bank network which does not have access to tax and, therefore, always faces the risks of illiquidity and insolvency.
  Furthermore, the bulk of petrodollar recycling was carried out largely by means of loans from commercial banks rather than by means of bond issues. There is one great disadvantage when sovereign borrowing is carried out in that way. In a bond issue, which is widely syndicated, the borrower is at arm's length from the lender or purchaser of the bond and is, therefore, under a firm obligation to fund the bonds. Any suggestion of default would ruin the borrower's credit rating in the market for bond issues.
  On the other hand, when a borrower borrows by means of bank loans he is in direct contact with the lender or commercial bank and is thus in a position to exert pressure on the lender or even groups of lenders in lending syndicates. That pressure can be used to force lending banks to make additional, imprudent loans and to accept unwillingly arrangements such as rescheduling and moratoriums on existing loans and even rescheduling of interest, let alone of principal.
  One of the great pressures is the prospect of the lending bank being helped to do more business in the country concerned. Obviously this can make things easier for the commercial bank. However, the real pressure that such countries bring to bear on banks that have already lent them a lot of money is the threat of a formal default. There is an enormous legal difference between an informal default and a formal default. A formal default carries with it far more serious financial implications in terms of accounting, reporting to regulatory authorities and the making of provisions than does an informal default.
  As is widely documented, sovereign borrowing of Third world countries has risen at least fourfold in the past 10 years. I shall not waste the time of the House by itemising the borrowing of individual countries, but three examples are Argentina at $37 billion, Brazil at $85 billion and Poland $27 billion. Those are loans of staggering proportions in relation to the underlying economies of those nations.
  The size of such loans in relation to the capital base of the financial institutions that hold them on their books as assets should give us cause for serious concern. The problems of normal debt service on those loans are serious enough, but the implications of a formal default give us even more cause for concern, not only for the liquidity of the international financial system, but for its solvency.
  Throughout the past 10 years or so, the domestic regulatory authorities or central banks have shown little sign of exercising much control over acts of imprudence within the Euromarkets. It is fully appreciated that freedom from regulation was one of the main reasons for growth in those markets, but it is felt that they have grown

  1473
  to such proportions that any banking failures within them would have a substantial effect on our own and other people's domestic financial institutions.
  It could be argued that the unregulated growth in the Euromarkets has occurred largely on the back of the underlying credit of the domestic financial institutions. Not only do such institutions stand liable for their world-wide branches, under the custom of ultimate parental responsibility, but it is often difficult for the managers of such institutions to know the true nature of their risk exposure, especially as regards sovereign borrowing. That point was illustrated vividly by the difficulty that certain banks had in itemising their exposure to Argentina when we froze Argentine assets earlier this year.
  For example, a bank may have made direct loans to country A. In addition, it may have managed syndicated loans to country A or have participated in such syndicates. I term those as primary risks. More problematical are what I term secondary risks, where a bank has perhaps made loans to corporations that have commercial business with inherent political risk exposure to country A. In addition, the bank may have managed or participated in financing projects managed by reputable Western companies which also have an inherent political risk exposure to country A. Finally, the bank may have foreign exchange and short-term money market exposure to other banks with similar, but unknown—to the money market—exposure to country A.
  The total profile of a bank's primary and secondary political risk exposure to country A is difficult to monitor and measure, even if all the loans are made from one head office or branch. The problem is magnified even more when one recognises that many international banks have exposure undertaken through a world-wide network of branches.
  Furthermore, many Euromarket loans are either managed from, or booked to, branches of Western banks situated in offshore financial centres. The domestic head office is ultimately responsible for the activities of those branches, but the role of lender of last resort in many offshore centres is unclear, to say the least. The recent example of the Banco Ambrosiano is just one example. In short, much business is carried out in offshore financial centres on the back of the credit of domestic financial institutions.
  When one considers the present economic situation facing the Western world, with zero growth predicted for 1982, and 30 million people already unemployed in OECD countries, one can see the true seriousness of an expected rise in United States and, therefore, international interest rates and its implication upon our domestic banking structures.
  If one adds to that the enormous problem of international debt and distressed borrowing by major corporations within domestic economies, which often lead to an unexplained increase in money supply growth rates, one begins to see the emergence of a serious picture of potential illiquidity and insolvency problems among international financial institutions.
  At the margin, which is often the critical area—the straw that breaks the camel's back—one also notices an accrual by Soviet countries of United States dollars that they have received in return for arms sales and so forth. It appears that many of those dollars are not being recycled to the Western financial system, but are being used for
  1474
  settlement within Comecon. If that is true, it represents an important net destruction of United States dollar liquidity at the margin, which could have serious consequences.
  We must ensure that, in case such illiquidity and insolvency problems materialise, the Western financial system and particularly the United Kingdom financial system are as insulated as possible from them. That means that the Government must face the possibility of illiquidity and insolvency problems within the financial system and take appropriate preventive and protective measures.
  I should like to ask my hon. Friend the Economic Secretary some specific questions. I am sorry that 1 have taken a long time and I shall understand if my hon. Friend feels that I have not left him enough time to answer my questions, but I should be grateful for written replies to these questions of which I have given him prior written notice.
  First, do the Government agree that the major central banks—the group of 30—should ensure that they are both ready and legally able to deal not only with an illiquidity crisis but also with an insolvency crisis in the banking and financial industries? Does he believe that it would be advisable for the group of 30 to establish a major international safety net of usable liquid funds that could be deployed by central banks to mediate in problems of illiquidity and therefore avoid any risk of insolvency?
  Secondly, will the Minister comment on the security of deposits in United Kingdom banks and the position of the Bank of England as lender of last resort both within our own system and particularly with regard to offshore branches of domestic British banks?
  Thirdly, will the Minister comment on the custom of ultimate responsibility of British banks for their offshore branches and the responsibilities that their head offices should exercise, particularly with respect to major offshore financial centres where the local lender of last resort may or may not share the same criteria and sense of obligation as is shown by the Bank of England in Great Britain?
  Fourthly, in return for commitments as lenders of last resort by central banks, will the Government support the motion that major central banks should exercise more regulatory control over the Euromarket?
  Fifthly, in an effort to curb the headlong and unrestricted growth of high risk sovereign borrowing, would the Government support the notion that the group of 30 central banks should establish a quota system for Third world sovereign borrowers using the facility and credit of Western banks? I suggest that under such a system each sovereign borrower should be granted a quota by agreement among the central banks and the Third world borrowers could then raise its loans within their individual quotas by tendering from within the international banking community.
  Under such a system, the group of 30 could force potential borrowers to disclose more relevant data and thus enable Western bankers to exercise proper due diligence before granting loans. It would also be possible gradually to reduce the loan exposure of Western banks to high risk sovereign loans and move it more towards development banks where it would be more correctly placed. Furthermore, any sovereign borrower who borrowed without being on the approved list or borrowed in excess of its agreed quota would do so with the lending bank knowing that loans made under such conditions would be rendered unprotected by the lender of last resort facilities from the central banks of the group of 30.

  1475
  Sixthly, will the Government act formally to support the harmonisation of EEC financial accounting according to EEC document No. 1129/76 and press specifically for disclosure by banks with regard to reserves, for improved declarations of direct sovereign lending and a more realistic declaration of the status of loans—that is, whether they are non-performing or effectively in a state of informal default?
  Seventhly, will the Minister comment on the status of the British freeze of Argentine assets?
  Eighthly, will the Government support the establishment of a code of conduct to be observed by all IMF member banks in the event of their freezing the financial assets of another Government? Could such a code of conduct be designed to prevent extra-territorial claims, the right of set-off and the waiving of sovereign immunity as was exercised by the United States Government in the freezing of Iranian assets?
  Ninthly, does the Minister agree that, although the international financial system now faces severe constraints, British banks have two major advantages—first, that they have been generally more cautious and financially prudent than many foreign competitors, and, secondly, that they have the outstanding back-up of perhaps the most experienced and sophisticated central bank in the world?
  Tenthly, will the Minister agree to urge our right hon. and learned Friend the Chancellor of the Exchequer to avoid any further taxes like the recent windfall profits tax which serve to erode the capital base of and confidence in the British banking system in an extremely hostile and high-risk international environment?
  Finally—looking back at those questions, I am glad that I gave my hon. Friend advance notice of them does the Minister agree that it would be in the interests of the Western economies to avoid any foolhardy and simplistic pressures to trigger a massive sovereign loan default such as that currently proposed in the United States by the Kasten amendment in relation to Polish loans, which seeks to force the United States President to trigger a formal default of all Polish loans outstanding to American banks? Does the Minister agree with me that that would be disastrous for the world?
  11.26 am
  The Economic Secretary to the Treasury (Mr. Jock Bruce-Gardyne): I must congratulate my hon. Friend the Member for Winchester (Mr. Browne) on obtaining this debate and his achievement in putting his important views on these matters on the record—at, I believe, the fourth attempt. The matters that my hon. Friend has raised are of considerable importance, topicality and concern to us all. It would be foolish to deny the existence of anxieties about high real rates of interest on the international economy and on the stability of international banking system in particular.
  I wonder, however, whether my hon. Friend is right to assume that the markets in the United States cannot peer behind the published figures for the federal deficit and draw the kind of conclusions that he drew about the importance of so-called off-balance-sheet items. I suspect that it is precisely the awareness of the extent of such items that has caused the reluctance of American interest rates to move downwards, notwithstanding the rather dramatic
  1476
  fall in the level of American domestic inflation. The published federal deficit as a proportion of the nation's GDP is very modest.
  Mr. John Browne: I agree that the figure is apparently modest, but the savings rate there is much lower than that in Western Europe. As for other financial institutions looking at the figures correctly, I can only say that they certainly do not publish them. When they talk to their clients, American stockbrokers and investment banks always still focus on a figure between $100 billion and $140 billion, and although the information is published it takes a great deal of finding.
  Mr. Bruce-Gardyne: On the ratio of the published deficit to the American savings level, my hon. Friend has anticipated me. I was about to make precisely that point. Although the savings ratio is low, one would have thought that with inflation down to low single figures there would be a tendency for the savings ratio to be reconstituted. I do not underestimate the anxieties expressed by my hon. Friend, which are widely shared, but I think that it is a mistake to assume that the American financial markets cannot make calculations of the kind that my hon. Friend has presented to the House today.
  On sovereign borrowing, again, the anxieties that my hon. Friend has expressed are widely shared. It is not all that different from the old proposition that if a customer has an overdraft of £100 the bank owns him, but if he has an overdraft of £100,000 he owns the bank. It is true that the scale of indebtedness of some of these countries presents the possibility of pressures on the commercial lenders that it may not always be easy for them to resist.
  I wish now to turn to the questions that my hon. Friend has posed. I shall endeavour to answer as many of them as time permits. Before doing so, I should put on record two propositions that I regard as background. It must be in the interests of all to see fulfilled the determination of the present United States Administration to prevent a fresh surge of inflation fuelled by excessive monetary laxity. The sheer weight of the United States economy means, as we saw to our cost in the early 1970s, that accelerating American inflation, fuelled by the manner in which the Vietnam war was financed, swiftly feeds round the international system.
  While we in this country cannot hope to insulate ourselves from the impact of interest rate movements elsewhere in the world and especially in the United States, responsible fiscal and monetary policies at home give us some freedom of manoeuvre that would be denied us if our domestic stance was perceived to be one of budgetary laxity such as suggested by Opposition parties. The proof of the pudding is in the eating. At the beginning of this year, United Kingdom interest rates were two points higher than dollar rates, whereas today they are a point lower. Yet our effective exchange rate is stable and inflation is falling rather faster than most commentators were predicting even at the time of the Budget.
  The moral of this experience is that excessive deficit financing is debilitating at home and potentially damaging abroad. I share my hon. Friend's concern about the size of the United States federal deficit on-budget and off-budget. I assure him that my right hon. and learned Friend the Chancellor of the Exchequer has voiced the sort of anxieties that he has expressed about the impact of very high real rates of interest resulting in New York, not only

  1477
  upon the prospects of recovery in advanced industrial countries but also on the indebtedness of less developed countries.
  My hon. Friend asked about the case for the group of 30 to establish a major international safety net of usable funds that could be deployed by central banks. There has been a substantial development of co-operation among supervisory authorities in major countries. This in itself offers us considerable reassurances. It is not possible to tell in advance what response, if any, would be appropriate from the authorities in any case of insolvency of an individual institution, but the immediate risk of such an insolvency causing more general problems lies in its possible effects on liquidity. I agree with my hon. Friend. The governors of the group of ten countries have stated publicly that means are available for the provision of temporary liquidity to the Euromarket and would be used if and when necessary.
  My hon. Friend asked about the security of deposits in United Kingdom banks and the position of the Bank of England as lender of last resort. Depositors with United Kingdom recognised banks and licensed deposit-taking institutions are covered by the deposit protection scheme under the Banking Act 1979. This provides cover for 75 per cent. of the first £10,000 of a depositor's sterling deposit with any of these institutions. It would be wrong, in our view, for the authorities to remove responsibility altogether from the depositor by providing 100 per cent. cover for deposits or blanket assurances of support regardless of circumstances. The Bank of England has acted as lender of last resort to the banking system in the past and will, I am sure, stand ready to do so where appropriate in the future.
  Mr. Browne rose—
  Mr. Bruce-Gardyne: I hope my hon. Friend will forgive me. If he wishes me to answer his questions, I think that I should proceed. I am sorry, but I do not think that I have time to give way.
  My hon. Friend asked about the ultimate responsibility of British banks for their offshore branches and the responsibilities that head offices should exercise, particularly in respect of major offshore financial centres. Our banks are legally responsible for the activities of their branches. The Bank of England, which has statutory responsibility for the prudential supervision of the British banking system, supervises British banks on the basis of their total world-wide business, including that of branches and subsidiaries. The Bank of England is confident that British banks are aware of their responsibilities in respect of their overseas activities.
  My hon. Friend asked whether Her Majesty's Government would support the motion that major central banks should exercise more regulatory control over Euromarkets. The Euromarkets are already effectively subjected to supervision and control from a prudential point of view. Banks in all major banking centres and their activities elsewhere in the world are covered by one supervisory authority or another. My hon. Friend asked whether the group of 30 central banks should establish a quota system for Third world foreign borrowers. We do not consider that this is either appropriate or possible. It would not be possible for any one institution to say how much any country should be allowed to borrow. It is for the individual bank to ensure that it does not on-lend
  1478
  money to borrowers who cannot repay it. I realise that this is easier said than done. We do not think that it is either possible or appropriate for a particular institution to establish a sort of pecking order of sovereign borrowers.
  Mr. Browne rose—
  Mr. Bruce-Gardyne: I am sorry, but I cannot give way to my hon. Friend.
  My hon. Friend says that the IMF already does this. Of course the IMF has a role. It is crucial that it should have a role. We support the IMF in exercising that role, but it is different from the establishment of a specific quota system or a pecking order in which sovereign borrowers should be made to queue. We do not think that this is appropriate or possible.
  My hon. Friend also asked about proposals for harmonisation of EEC financial accounting procedures. I take it that my hon. Friend is referring to the draft EEC directive on annual accounts of credit institutions. As my hon. Friend knows, the Government support the principle of harmonisation within the Community in this respect. Our attitude on hidden reserves is that the onus of proof is on those who wish to maintain them to make the case for doing so. I believe that my hon. Friend referred to these matters and also to direct foreign lending and the status of loans in the Second Standing Committee on European Community Documents a fortnight ago. My hon. Friend the Minister for Consumer Affairs told him in reply, I believe, that the Government were grateful for the suggestions and thoughts that he put forward and that they would be studied with interest and taken into account in deciding the United Kingdom's stance on the EEC draft directive.
  My hon. Friend asked me to comment on the status of the British freeze of Argentine assets. This matter is currently under consideration. I do not think that it would be helpful for me at this stage to go into further detail.
  My hon. Friend also asked about the establishment of a code of conduct to be observed by all IMF member banks in the event of their freezing financial assets of sovereign Governments. A code of conduct implies that financial asset freezes will become regular affairs. We do not foresee that. We do not wish it. Of course, there may be extreme circumstances when a freeze of financial assets has to be imposed. There have been two occasions in the past three or four years when this has happened. It would not be helpful to spell out circumstances in which such a freeze could or should be imposed or the method of its application.
  Mr. Browne: Will my hon. Friend give way?
  Mr. Bruce-Gardyne: I am very sorry. I cannot give way to my hon. Friend. There are still one or two more questions that he has asked. If he wants answers to his questions, he must allow me to complete what I have to say, and he has not left me much time to do so.
  My hon. Friend asked me whether I agreed that, while the international financial system faced severe strains, our own banking system was a good deal more strongly and securely placed. It is fair to say that British banks have benefited from taking a relatively cautious view, and I have no doubt that the prudential supervision of the Bank of England has played a useful role in that. It is possible to argue that we had our experience with lending problems in the mid-1970s and that perhaps we have learned lessons from them.
  Mr. Browne: May I put to my hon. Friend a brief point of information? On the code of conduct, I was not getting at conditions under which a freeze would be instituted. I was pointing out what must not be done in a freeze, such as right of set-off and waiving sovereign immunity.
  Mr. Bruce-Gardyne: I have to say again that I do not think that it is practicable, possible or necessarily desirable to spell out the precise nature of the methods to be used in the case of a freeze of financial assets, not least because we do not want to establish the idea that this is to be part of the normal course of events. We hope very much that it will not be.
  My hon. Friend asked about domestic banking taxation. I do not accept that the 1981 special tax on banking deposits had the effects suggested by my hon. Friend. I did not accept that when I was on the Back Benches at the time.
  As for the future, my right hon. and learned Friend has made it clear that further thought needs to be given during the current financial year to the problem of how best to ensure a sufficient contribution to the Exchequer from the banking sector. He approaches this with an open mind. I can assure my hon. Friend that all the relevant factors are taken into account in this review, but I cannot give him any idea at this stage of the outcome. We are aware of the factors which my hon. Friend mentioned, and I assure him that they will be taken into account.
  Mr. Browne: Will my hon. Friend give way?
  Mr. Bruce-Gardyne: I cannot give way to my hon. Friend again.
  1480
  My hon. Friend asked whether I agreed that it would be extremely foolhardy and against the interests of Western economies to adopt the proposal contained in the Kasten amendment for sovereign loan default in the case of Poland. We are entirely at one about that. That would be a very mistaken way of proceeding.
  The world is passing through a transition from a period of very high and rising inflation rates to a period perhaps of much more stable money and lower inflation rates. Inevitably, there are financial transactions which in the previous period appeared to be good sense but which in the very changed circumstances of a much lower and more stable regime of inflation internationally are bound to look very different today. It is essential that we get through this phase of transition. It is not without risks and dangers, and I accept my hon. Friend's warnings, but the prospects for the world economy must be substantially better in the long term once we have gone through this transition and moved back to a period of much more stable prices and much lower inflation, as I believe we shall be doing.
  The essential role of the Government is to act in concert with our allies and our trading partners to make sure that the sort of risks to which my hon. Friend referred are taken fully into account. At the same time, we should not indulge in exaggerated expectations or fears about the extent of the risks that we face.
  We can at least feel with some reasonable confidence that we in this country, thanks to the prudent management of our affairs by Her Majesty's Government, are much more soundly and solidly placed than some of our neighbours, and we hope that they will take notice of our example.

  Extradition (Irish Republic)
  11.45 am
  Mr. John Ryman: I wish to draw attention to the problems arising in the implementation of extradition arrangements with the Irish Republic. I am glad to see that the Minister of State, Home Office is here to give the Government's views. I shall be mercifully brief. I have four points to make. In the wake of the recent IRA outrages in London, the problem has become extremely acute once again. My four points are: first, the problem; secondly, the long-term solution; thirdly, the interim period; and, fourthly, the Government's plans.
  The problem can be stated very simply and has been stated on a number of occasions recently in the House and elsewhere. In the House on 26 April the Attorney-General said in reply to an oral question:
  "I have always made it clear that the ability of terrorists to shelter behind the exception of political offenders is one of the major obstacles facing us. The Irish side is well aware of this. A number of ways of overcoming the difficulty are available and they were discussed during my previous talks."
  The right hon. and learned Gentleman was referring to previous talks with the Irish Attorney-General.
  "However, I am not prepared to go into details of what were private and confidential discussions."—[Official Report, 26 April 1982; Vol. 22, c. 607.]
  The background was that as long ago as 9 November 1981 the Secretary of State for Northern Ireland said in a written answer:
  "Although the police believe that some people whom they would like to interview in connection with terrorist crimes committed in the United Kingdom are now in the Republic, it cannot be said for certain where they all are.
  Since 1969, arrest warrants have been forwarded by the Royal Ulster Constabulary to the Garda Siochana in relation to 82 cases connected with terrorism. As a result one person has been extradited; the suspect was returned to Northern Ireland in 1976 and was subsequently convicted of arson. The Irish courts have refused extradition on 45 occasions. The reasons given for these refusals and the outcome of the remaining warrants have been as follows:
  subject arrested in the Republic of Ireland but extradition refused:

  (i) on the grounds that the offence was political

  34

  (ii) on the grounds that no comparable offence existed within the Republic

  9

  subject arrested in the Republic but habeas corpus granted

  2

  Warrants refused

  45

  Other warrants:

  subject arrested in United Kingdom

  17

  subject prosecuted and imprisoned in the Republic

  1

  warrants later withdrawn by RUC

  12

  warrants not yet executed

  6"

  —[Official Report, 9 November 1981; Vol. 12, c. 45.]
  Those figures state the problem, which can be formulated in the proposition that, in the vast majority of cases, terrorists who commit serious criminal offences in the United Kingdom and elsewhere, and then leave the jurisdiction of our courts and subsequently are arrested in Ireland, successfully raise a political defence if extradition proceedings are taken. That defence has a long and respectable history in the law of extradition, but it has no place in modern times when we are dealing with professional criminals who pretend that they are achieving political ends by committing serious criminal offences in Britain.
  1482
  The position of the Republic of Ireland has always been special and the reasons for that are varied. It can be summed up by quoting from "The Law and Practice of Extradition":
  "The Republic of Ireland is treated for the purpose of extradition as a special case. Although not part of the Commonwealth, it is treated as a designated Commonwealth country by the United Kingdom dependencies for the purposes of requests made to them by the Republic for accused persons found in the dependencies. In relation to the United Kingdom the position is wholly exceptional. The physical proximity of the Republic to the United Kingdom, the ease with which its citizens have customarily been allowed to come and go and enjoy civic rights in Britain, and the common origin of most of its law with the United Kingdom, justifies special treatment for the return of accused persons one to the other. Most of the general principles of extradition law apply, however, except for the specialty rule and the need to prove a prima facie case."
  That general principle of law has been applied for a long time and was applied recently in the High Court of Justice when, on 13 March 1982, Mr, Justice Forbes and Mr. Justice McCulloch, in a case called In re McFadden, reported in "Times Law Reports" on 13 March 1982, in the Divisional Court of the Queen's Bench Division that
  "the rule of international law known as the specialty rule, that no one should be prosecuted for any matter following extradition other than that for which the extradition had been requested, did not extend to the special arrangements made under the Backing of Warrants (Republic of Ireland) Act 1965 and the corresponding Irish legislation whereby, instead of extradition, matters were dealt with by mutual application of each country's warrants."
  Therefore, the history, as interpreted very recently, discloses that the Republic of Ireland is in a very special position. Although it is in a special legal position, the plain fact is that terrorists are committing outrages in the United Kingdom and can find safe refuges in the Republic of Ireland, confident in the belief that the Irish courts will not extradite them, because the political defence is raised successfully again and again. For that reason there has been special legislation, under the Criminal Law Jurisdiction Act 1976, under which the terrorist Tuite was recently prosecuted to conviction in the Republic of Ireland and sentenced, but that was a wholly exceptional situation. Tuite was a defendant who was awaiting trail in the United Kingdom, escaped from custody, was then rearrested in the Republic of Ireland and tried by the Irish courts under that legislation on evidence provided by the United Kingdom law enforcement agencies.
  The practical problem is that it is difficult in Ireland to get convictions because it is difficult to obtain the evidence necessary to produce those convictions. The Tuite case was somewhat exceptional. We did not have to rely on the Irish to get the evidence; we got it ourselves. In those circumstances, the evidence was adduced in an Irish court before three Irish judges, who convicted the defendant and then sentenced him. It was a wholly exceptional situation and cannot in any way be of comfort to those of us in Britain who wish to see strong steps taken by the Government to ensure that fugitives from justice do not escape.
  There are plans afoot in the long term to reform the law, and the Home Office has recently produced a formidable document headed "The Review of the Law and Practice of Extradition in the United Kingdom". That excellent document was prepared by a working party appointed in March 1979. If I have any criticism of the document, it is that the case references are all at the back and that terrible abbreviations are used in the body of the document. Instead of the case being cited properly in the body of the

  1483
  document, one has to turn to the last page but one to find the reference. Subject to that relatively minor criticism, it is an excellent document. It states the law succinctly and accurately and makes several sensible recommendations.
  The recommendation which is of particular interest in regard to the Republic of Ireland is No. 22 on page 94, which says:
  "The new law should contain a wider politicial safeguard similar to that provided in the Fugitive Offenders Act 1967. This should not extend to offences connected with a political offence".
  There is one other specific recommendation showing the absurdity of the Irish position. It is illustrated in the case of Bourke v. Attorney-General, reported in (1972) IR 36, and the extract from the headnote puts the point succinctly:
  "The Irish decision"
  —that is, in Bourke's case—
  "which offers some interpretation of the phrase `offence connected with a political offence' was in the case of Sean Bourke. Bourke helped George Blake, who was serving a term of 42 years' imprisonment for espionage, to escape from prison. His extradition was sought from the Republic of Ireland under the Backing of Warrants (Republic of Ireland) Act 1965. The application was rejected by the Supreme Court, with one dissenting voice, the court holding that Blake's offence in escaping was a political one and that Bourke's offence in helping him was an offence connected with a political offence in terms of the Republic's Extradition Act 1965, which follows the European Convention in this respect. The Chief Justice noted that the statute did not specify that the connected offence should itself have a political complexion".
  That is simply one example of the operation of the rule which enables criminals—Blake was a criminal and not a political crusader—convicted by due process of law of a criminal offence, and sentenced to a long term of imprisonment, to escape justice by pleading a political defence which in all common sense and reality is totally invalid. We have to look at the reality of the position and not at the form in which things operate.
  It has at last been recognised that something must be done, and must be done very quickly. Even the European Parliament, of which I am not a particular fan, has woken up to the problem, for on 10 July this year it voted for the abolition of the concept of political crime as a bar to extradition between members of the European Economic Community.
  The document produced by the Home Office working party makes several recommendations about the amendment of the law of extradition in relation to European countries, but all that is no comfort to those of us in this House who wish to see terrorists, whether they be Irish terrorists, PLO terrorists or any other kind of terrorist, brought to justice, if necessary by extraditing them from abroad, trying them in our courts and sentencing them in our courts if convicted.
  I should like to end my contribution to this short debate by asking the Minister to state the Government's intentions. I am sure that he recognises, as does the whole House, the gravity of the problem, which is particularly important in the context of the aftermath of the recent outrages. What are the Government's plans? It is true that the Government are in a difficult position, because extradition law, by its very nature, involves the consent of the Government of the country with which one is negotiating an extradition treaty.
  There are many anomalies in the law, as the Minister will be the first to admit. It has always struck me as an
  1484
  extraordinary anomaly that one can extradite for the substantive offence, but not for the offence of conspiracy. That seems to fly in the face of all common sense. Whether it is a crooked financier in California, a murderer in Malta, or a terrorist in Ireland, one can seek to extradite that individual on the substantive offence, but if a criminal conspiracy of any type is alleged extradition does not apply. That seems to be an extraordinary state of affairs and should be examined as soon as possible.
  I do not want to take up any more time. The hour is late, both in the Session and in the day. This is a serious subject and one to which I know the Government have given anxious consideration for a long time.
  Perhaps I can finally illustrate the issue in this manner. When questions were asked about extradition in the Republic of Ireland, the Secretary of State for Northern Ireland on 13 November 1981 told journalists at a Stormont Castle press conference
  "that he considered it `unreasonable' for the Dublin Government to refuse to extradite terrorists wanted in Northern Ireland. Pressed on the question he said: 'We feel very strongly extradition should take place. We do put pressure about it but such pressure can be counter-productive'."
  The Government have recognised the problem. Even the former Secretary of State, the right hon. Member for Spelthorne (Mr. Atkins), said:
  "The Government's views on extradition are well known to the new Government in the Republic of Ireland. We consider that extradition can be the best way of bringing to justice fugitives south of the border for crimes they are alleged to have committed in Northern Ireland. In its absence, the extra-territorial legislation remains the best alternative."
  It is all very well for the former Secretary of State to say that, but that depends on the evidence being available to prove the charges. The Government cannot shirk their responsibility and say that they will leave it to the prosecuting authority in the Republic of Ireland, because they very rarely get cogent evidence placed before the courts which would justify the court coming to a conviction in a particular case. That is a shirking of responsibility. Responsibility is ours and we must take it.
  The former Secretary of State's reply continued:
  "As in the past, we expect the Government of the Republic to use this legislation, which permits prosecution in one jurisdiction for an offence committed in the other."
  In answer to a supplementary question from the right hon. Member for Mansfield (Mr. Concannon), the right hon. Gentleman said:
  "I note what the right hon. Gentleman says. The new Government of the Republic are in the early days of office. Let us hope that the procedures agreed between us will prove to be the more effective than they sometimes seem to have been in the past."—[Official Report, 16 July 1981; Vol. 8, c. 1382–83.]
  That was a somewhat pious hope without any real foundation.
  Apart from the Tuite case recently, my researches have disclosed that there has been no other case in which that procedure has been followed. In all the other cases the criminals have got off scot-free. Although we have known who they were, when they have been brought before the Irish courts they have laughed at British justice and escaped all punishment.
  It is against that background that I ask the Minister to tell the House what the Government's attitude is and what steps they contemplate taking to deal with this serious problem.
  12.4 pm
  The Minister of State, Home Office (Mr. Patrick Mayhew): This is a timely debate, and I congratulate the hon. Member for Blyth (Mr. Ryman) on his success in bringing this subject to the attention of the House. It is timely today because of the terrible and disgusting attacks that we have recently experienced in central London and the continuing outrages in Northern Ireland. They remind us of the need to ensure that the perpetrators of such offences are brought to justice wherever they may be found. This is particularly necessary when the jurisdictions of two separate countries are geographically so close, communications are easy and there is a common travel area.
  All those factors are true of the relationship between the United Kingdom and the Republic of Ireland and tend to make it easy for criminals to evade justice by fleeing from one jurisdiction to another. They ought also, however, to make it easier for the neighbouring States to co-operate in the apprehension and prosecution of fugitive criminals. Moreover, measures of co-operation are further eased between the United Kingdom and the Irish Republic by the common origin and similarity of our respective legal systems. Consequently, as the House is aware, the basic arrangements for the return of fugitive criminals between the United Kingdom and the Irish Republic are much simpler, and more comprehensive, than those which exist between the United Kingdom and other States.
  Return from the United Kingdom is governed by the Backing of Warrants (Republic of Ireland) Act 1965, to which the hon. Gentleman has referred, and from the Republic of Ireland by the largely reciprocal provisions of its Extradition Act 1965. Those Acts provide for the return of persons accused or convicted of indictable offences or of offences punishable on summary conviction with six months' imprisonment, and for which there is a corresponding offence under the law of the requested State.
  The procedure is that a warrant issued by a judicial authority in the requesting country is submitted to the police force in the requested country in whose area the fugitive is thought to be. If the necessary supporting evidence has been produced, the warrant is endorsed. The person sought may then be arrested and brought before a court whose function it is to consider whether to order his return. This simplified procedure omits certain important features of the Extradition Act 1870 and the Fugitive Offenders Act 1967—in particular, the need to establish a prima facie case against the accused person. The requirement for a warrant to be issued for the arrest of the fugitive, before the machinery for his return can be set in motion, means that the police must have satisfied a judicial authority that there is a case to justify the arrest of that person for the alleged offence.
  The system is therefore based firmly on the respect which courts throughout the United Kingdom and the Republic rightly have for each other's decisions. It is an excellent arrangement, which is fully justified by the close ties of tradition, common interest and compatibility of law between the two States, and it greatly eases the task of both in securing the return of offenders where the evidence is available. The hon. Gentleman rightly emphasised that point.
  As the hon. Gentleman has forcefully reminded us, however, there is a snag. Both the United Kingdom's and
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  the Republic of Ireland's legislation provide that a person shall not be returned for a political offence. In the Irish Extradition Act this restriction is further extended to apply to an offence connected with a political offence. In some cases involving terrorists, courts in the Republic of Ireland have held that the offence was a political offence, or connected with a political offence, and it has not therefore been possible for the Republic of Ireland authorities to return the offenders to the United Kingdom in accordance with their law. That is the problem on which we must focus. It may be helpful if I say something more about it and about the efforts that have been made to overcome it.
  The principle of non-extradition for an offence of a political character, which is closely associated with the power to grant political asylum, is of long standing and is internationally recognised. It has been an essential feature of United Kingdom extradition arrangements since at least the middle of the last century, and was given statutory effect by our Extradition Act 1870. The inclusion in the Irish Extradition Act of an additional provision covering an offence connected with a political offence is not something that we have felt any need to imitate, but it is fair to say that it accords with the European convention on extradition. The Republic of Ireland is a party to that convention. The United Kingdom is not. However, the wider safeguard is included in our extradition treaties with Belgium and France. Of course, treaties almost always impose equal obligations on, and afford equal safeguards to, both parties.
  There is no internationally agreed definition of what constitutes an offence of a political character, nor does our own or the Republic of Ireland's legislation define it. Moreover, our own courts have declined to bind themselves to any hard and fast definition, but they have made it clear that, in considering the safeguard contained in the Extradition Act 1870, the motives and purpose of the fugitive in committing the offence are highly relevant.
  For some years now, there have been discussions between the Governments of the United Kingdom and the Republic of Ireland, as well as between like-minded States generally, on how to overcome the problems posed by terrorist criminals enjoying the benefit of the political safeguard. As to arrangements between the United Kingdom and the Republic, the problem was from our point of view one of the most significant of those discussed at the Sunningdale conference in 1973. As the House knows, it was agreed at that conference that a law enforcement commission should be appointed jointly by the Irish and the United Kingdom Governments to consider how persons committing crimes of violence, however motivated, in any part of Ireland could be brought to trial irrespective of the part of Ireland in which they were found. The commission considered different ways of approaching the problem, including the amendment of the extradition legislation. Regrettably, the members of the commission were divided in their views.
  The Irish members adhered to the view previously taken by the Government of the Republic that it is a principle of international law that the extradition of a person accused of a political offence does not take place. They were also of the view that, because article 29.3 of the Irish constitution declares that Ireland accepts the generally recognised principles of international law as its rules of

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  conduct in its relations with other States, the law of the Republic of Ireland could not be amended so as to permit extradition for a political offence.
  The United Kingdom members took a different view. They concluded that sovereign States may, where their mutual interests demand it, make or contemplate exceptions to the non-extradition rule. They also concluded that, while international law recognises a general practice of refusing extradition for political offences, there is no principle of international law forbidding it.
  They further concluded that sovereign States, where it is in their mutual interests to do so, make exceptions to the general rule of non-extradition and that it is the practice of States to make such an exception where that is justified by the enormity or barbarism of the crime or the threat that it poses to international law and order. A number of international conventions concluded in recent years make such an exception.
  Successive United Kingdom Governments have adopted the views of the United Kingdom members of the commission. However, successive Irish Governments have hitherto felt unable to change their position. Nevertheless, I know that my right hon. and learned Friend the Attorney-General is in touch with his opposite number in the Republic and that he hopes to resume discussions with him as soon as possible.
  In the consciousness that agreement on extradition was not available, the joint law enforcement commission explored the contribution which an extension of extraterritorial jurisdiction could make to solving the problem of bringing to trial those accused of crimes of violence which might be regarded by the courts as being politically motivated. The commission recognised that the efficacy of such an arrangement would depend upon witnesses, both for the prosecution and defence, being ready to cross the border to the place of trial. Nevertheless, in the absence of agreement on extradition, it was agreed between the Irish and United Kingdom Governments that this course should be followed. The Criminal Jurisdiction Act 1975 and the Republic's Criminal Law (Jurisdiction) Act 1976 gave effect to the recommendation.
  The scope of these Acts is wider in relation to co-operation between Northern Ireland and the Republic than in relation to Great Britain. So far as Great Britain is concerned, courts are limited to trying a United Kingdom citizen for an offence committed in the Republic only if it is an offence involving the use of explosives. The corresponding jurisdiction of the Republic is also limited to explosive offences, giving the Irish courts jurisdiction over such offences committed by Irish citizens anywhere. It is under the provisions of the Irish legislation that Gerard Tuite was tried and convicted at the Dublin special criminal court on 3 July for possessing explosives in Greenwich between June 1978 and March 1979, and it is of course a matter of satisfaction to the British Government that the extra-territorial arrangement should have proved effective in this case. However, I entirely accept the hon. Gentleman's point that the finding and provision of the evidence in that case rested with the British Government and that that was the primary reason for the successful conclusion of that prosecution.
  I referred earlier to the fact that discussions on bringing terrorist criminals to justice have taken place not only
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  between the United Kingdom and Irish Governments but among Governments of European countries generally. Successive United Kingdom Governments have participated fully in these discussions, the most outstanding product of which, so far, is the European convention on the suppression of terrorism. The convention, drawn up under the auspices of the Council of Europe, is designed to ensure that the perpetration of acts of terrorism do not escape justice by a plea that these acts have political motives and that, if extradition cannot be granted, the requested State must consider prosecution. The passage by Parliament of the Suppression of Terrorism Act 1978 enabled the United Kingdom to ratify the convention.
  The Republic of Ireland has felt unable to become a party to the convention. Its Government have explained the point about the Irish constitution to which I have referred. Nevertheless, in order to make arrangements for bringing offenders to trial as effective as possible throughout Western Europe, an agreement on the application of the convention on the suppression of terrorism was signed in Dublin by the then nine member States of the European Community in December 1979. This provides that if extradition is refused on the grounds that the offences are political offences, the requested State should submit the case to its prosecuting authorities for the purpose of prosecution. The agreement can, however, come into force only when it is ratified, and there is no immediate prospect that this can be achieved. The French, for example, have linked it with further progress on a proposed European Community convention on co-operation in criminal matters.
  The Government, like their predecessors, are in no doubt about the repugnance which is felt by the overwhelming majority of British people at the notion that those who commit outrageous and indiscriminate acts of violence or barbarism such as those which we have recently witnessed should escape justice because their acts can be regarded, apparently, as political. I understand and endorse every word that the hon. Gentleman has uttered in condemnation of that result.
  Whatever the merits of the political safeguard in a world-wide context, we believe that it should be possible for neighbouring States with close ties, common interests and full respect for each other's judicial systems to agree that advantage shall not be taken of it in matters so closely affecting them all. It is apparent that these sentiments are shared by the Governments and peoples of other European countries, especially those which have become parties to the European convention on the suppression of terrorism.
  We remain of the view that extradition is the best way of dealing with fugitive offenders. It has been the position of successive United Kingdom Governments, in respect of terrorist criminals and in respect of all fugitive offenders, that it is proper and most effective for a person to be tried by the courts of the State within whose territory the offence has been committed. We have always been reluctant, although very ready to admit exceptions, to see any extension of extra-territorial jurisdiction. The reasons for this are well known and, as I have already mentioned, they were recognised by the joint United Kingdom-Irish law enforcement commission.
  In essence, the common law tradition attaches an importance to oral witnesses and best evidence which makes it more difficult for us than for civil law countries to try or help to prosecute offenders outside their own country. In our discussions with the Government of the

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  Irish Republic, therefore, we shall continue to draw their attention to what we see as a continuing problem of great gravity. Nevertheless, in the absence of extradition arrangements which will deal satisfactorily with terrorist offenders, we attach great value to the legislation enacted in both countries to provide for the extra-territorial treatment of offences. Mounting prosecutions under the legislation is not without its difficulties, for the reasons that the hon. Gentleman has mentioned among others, but several prosecutions have successfully been brought in the Republic recently, which represent a step forward in making effective use of the legislation. The prosecuting authorities, both in Great Britain and Northern Ireland, will continue to ask the Irish prosecuting authorities to consider prosecution when they are satisfied that there is sufficient evidence to justify proceedings.
  The hon. Gentleman rightly reminded us in fairness that the essence of extradition is that it derives from a treaty, and a treaty is merely the expression of an agreement. We can reform our own extradition law but that is merely the foundation for the agreement that is necessary to get a satisfactory arrangement established between Britain and another country. However, I was grateful to the hon. Gentleman for what he had to say about the report of the working party that was produced by my Department on 22 July. I am encouraged by the comments that he has made about it, coming from someone who takes so informed an interest in this difficult subject.
  We intend to pay careful attention to the comments which we shall receive in substantial numbers. We have asked the hon. Gentleman and many others who take an interest in this subject to consider the document. In the light of the comments that we receive, we shall be better equipped to know how to move forward, perhaps along the lines of the recommendations contained in the report.
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  I wish that I could have told the hon. Gentleman that the problems that he has raised so lucidly and compellingly permit of some easy solution that has become clear to us, but I cannot do so. I hope, however, that the hon. Gentleman and the House will accept, as second best, my assurance that the Government and the prosecuting authorities are fully aware of the importance and the gravity of the problem with which this debate has been concerned, as well as of the difficulties, and that we shall continue to do all that we can to find the best and the most just solution to them.

  Royal Assent
  Mr. Deputy Speaker (Mr. Paul Dean): 1 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:

  1. Finance Act 1982

  2. Appropriation Act 1982

  3. Stock Transfer Act 1982

  4. Derelict Land Act 1982

  5. Local Government and Planning (Scotland) Act 1982

  6. Woolworths (Aberdeen Development) Order Confirmation Act 1982

  7. Commercial Banking Company of Sydney Limited (Merger) Act 1982

  8. Derwent Valley Railway Act 1982

  9. West Yorkshire (Parking and Transport) Act 1982

  10. Greater London Council (Money) Act 1982

  Question again proposed, That this House do now adjourn.—[Mr. Berry.]

  Motor Vehicles (Imports)
  12.25 pm
  Mr. Hal Miller: I hope that my hon. Friend the Minister will not think me churlish if I return to him on the motor trade after his generous—one might say sweeping—response to my earlier question about hire-purchase restrictions. I do not expect such a wholesale response today. The motor trade is grateful to him for what he has done so far and expects better things to come. My purpose in raising the subject springs from the announcement by my right hon. Friend the Secretary of State for Transport on 2 February in response to a question about the trade in so-called parallel imports of motor vehicles. These are imports from the Continent by individuals or non-accredited dealers.
  My right hon. Friend's response demonstrated that there would be no change in the type approval regulations in Britain to restrict such trade until the type approval information was readily forthcoming to those who wished to take part in the trade. He said that discussions would be held with the industry to that end. My information is that it has not been possible for the Department and the trade to reach agreement on a code of practice to give effect to that aim. With the increase in the trade since his announcement, we might question whether it is still desirable to take those steps.
  More recently, there has been much activity by DG IV, the directorate responsible for competition policy in the European Economic Commission. That directorate has subjected Continental motor manufacturers—people are often only too ready to decry our manufacturers—to the threat of action to remove the limitations on the supply of right-hand drive vehicles to Continental dealers even before the case has been decided. I must warn my hon. Friend that any such action would bring the EEC into further disrepute in Britain. I hope to demonstrate that a common market is not operating because of the difficulties in tax structures and licensing provisions.
  I am conscious of the fact that in raising the subject and in taking the line that I intend to take I am taking on the wisdom of the Establishment, and no doubt I shall receive an unsatisfactory press. The Economist carried a headline "Carry on importing". The article stated:
  "The British Government has, bravely, tried to encourage the trade".
  The Scotsman suggests:
  "The British car buyer: taken for a ride?"
  The Times opines that life is "too comfortable for cars." The Sunday Times sent the redoubtable Mr. Barrie Penrose to investigate the trade, which—this is near to the Minister's heart—issued 40,000 kits to would-be do-it-yourself importers.
  We must examine carefully the facts and figures behind the trade and why I, a humble Back Bencher, should take on the might of the Establishment in this way. It is difficult to establish the exact size of the trade at present. The best estimate that I have been able to arrive at is about 50,000 units a year. That is about 3 per cent. of the British new car market. Coincidentally, it corresponds to the drop in forecasters' estimates of demand in the United Kingdom market this year, from 1Ċ5 million to 1Ċ45 million. However, much higher figures are being quoted in some quarters.
  I am interested to see the hon. Member for Antrim, South (Mr. Molyneaux) here today, because of the rapid
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  developments in the Ulster markets of imports across the land frontier from Eire, where the vehicles are not subject to the construction and use regulations. Therefore, there is no certainty that they comply with the safety requirements.
  The right hon. Member for Down, South (Mr. Powell) raised the matter in the House a fortnight ago, but I do not think that he mentioned the scale of such imports. One quarter of new registrations in Ulster consist of uncertificated vehicles. That proportion is rising and the effects on the motor trade in the Province can well be imagined. I shall come later to the general effects on the motor trade throughout the United Kingdom.
  What are the reasons for the sizeable trade? Let us admit at once that there is still a considerable disparity in price between cars available on the Continent and in Britain. I shall seek to go into the reasons for that. I would just issue a cautionary note, that the figures widely quoted in the press often give a discounted price that is available on the Continent but a list price for Britain, taking no account of the discount available here. Discounting is widely practised because of the oversupply of the British market. Indeed, it is estimated that 1Ċ5 million new units are sold, compared to a rate of supply of 2 million units. Therefore, considerable discounts are available.
  None the less, if we take the example of a Volkswagen Golf or an Audi, the manufacturers tell me that there is a disparity of about £800. If one takes a more popular model, perhaps a 1600 four-door Cortina, the price would range from £4,300 in Britain, to £2,500 in Denmark, to £2,900 in Belgium. I should make it plain that those are the pre-tax prices—the manufacturer's price and the dealer's margin. I say "pre-tax" because here is one of the reasons why there is no common market. The tax on a 1600 four-door Cortina in Belgium is 200 per cent. That is twice the combined manufacturer's price and dealer's margin. That is one reason why the manufacturer's price in Denmark and the dealer's margin have both been depressed below profitable levels.
  Another reason—apart from the Danish tax system—is that Denmark is not a manufacturing base for motor vehicles and all manufacturers use it as a marginal market. Car manufacture is a volume business, and if additional units can be sold on the basis of variable costs, taking no account of fixed costs, a contribution to profit can still be achieved. A high rate of tax also appertains in Eire and that has given an impetus to the trade into Ulster.
  I deal next with Belgium. I have already mentioned the figure for the Cortina. It is low, because there is price control in Belgium to protect Belgium's devaluation. That is another significant factor. Despite the European monetary system, there have been recent devaluations in both France and Belgium, which have been protected by price controls. I shall return to that later in the context of the European Commission's attempts to ensure that prices between markets do not vary by more than 12 per cent. If they do, the Commission will not allow the distribution to continue.
  The devaluations of 12 per cent. and the imposition of price controls in both Belgium and France mean that a price cut below a profitable level is being forced on manufacturers—not only British manufacturers—if the Commission insists on freedom of trade being based on French and Belgian prices.
  There is a differential in manufacturing efficiency between many United Kingdom manufacturers and their

  1493
  Continental counterparts. The differential in manufacturing cost for a small to medium-sized family saloon works out at about £350. I doubt whether anyone would go to the Continent, pay the deposit in advance and go through all the bureaucracy to import a car for such a low saving. Nevertheless, that differential in manufacturing efficiency exists. Of course, our manufacturers are trying to reduce that differential and to bring our performance up to Continental levels. There has been great success with the Austin Metro, which already exceeds Continental levels.
  The Metro is more efficiently produced than other British-made cars, but it has to be sold in Belgium at a lower price than in the United Kingdom because of devaluation and price controls. That is one important reason for the differential, which has apparently not been understood by The Economist, the Financial Times or any of the other pundits that I have cited. It is not a difficult concept to grasp.
  We must bear in mind that there are not only manufacturing differentials, but differentials in the economies of the various member States. An index of competitiveness that is based on exchange and inflation rates shows that since 1977 all British manufacturers—not only car manufacturers—have been put at a competitive disadvantage during the past five years in relation to France and Germany. Germany is one and a half times more competitive than Britain, and Belgium is almost twice as competitive as Britain.
  That has nothing to do with manufacturing efficiency, but everything to do with the movement in the exchange and inflation rates. I have excluded from the index the effect of interest rates. Therefore, despite what some of the financial pundits may say, it is not only our manufacturers that are to blame.
  There are differences between member States of the Community. I have talked about manufacturing efficiency and the indexation of competitiveness with exchange and inflation rates. I have mentioned price controls, excise duties and devaluation, and there are also marketing differences. Manufacturers launch their new models into different national markets at different times, and obtain price increases in different markets at different times. I have pointed to the disparity in the Volkswagen Golf. A year ago that disparity was £1,800, because in Germany the manufacturers had not been able to obtain a price increase because of unrestricted Japanese competition. They put through three price increases this year after some understandings had been reached with the Japanese which reduced the differential, but then there were exchange rate problems.
  There are still national as opposed to Community markets. How important is the question that I should seek to raise it again? I have attempted to show the size of the trade. What will be the effect of that trade on our manufacturers and traders? The motor trade is going through a depressed time. For example, 13 per cent. of all bankruptcies in the first six months of the year were in the motor trade. Apart from having to discount on new models, the motor trade has an obligation to keep spare parts, to provide services and to carry out warranty work on those so-called parallel imports, without having had the benefit of the original sale. The result of an unchecked growth in that trade would inevitably put several more of our dealers out of business.
  It is not often appreciated that motor dealers employ over 400,000 people which is as many as are employed by
  1494
  motor manufacturers. They have a heavy investment in servicing, warranties and spare parts. They fear that if the trade is allowed to continue, fleet buyers will be tempted to participate. Fleet buying accounts for 70 per cent. of all new car sales.
  There are arguments—although I do not wish to overstress them—about the safety of parallel imports, apart from the ones that are uncertificated in Ulster. There are dangers in converting left-hand drive to right-hand drive unless it is carried out in a proper manner with the appropriate parts. The bulk of the parallel trade is in factory-built models, and that is what I am discussing.
  The trade does not affect only dealers near ports. Representations have been received from Mr. Rollings of North-East Motors, who fears that if the EEC Commission continues in that way there may be a forced withdrawal of certain marques from the market altogether in the same way as Red Label whisky has had to be withdrawn from the United Kingdom market, resulting in a restriction of the consumer's choice rather than an extension of it. I am sure that that would be of concern to the Minister.
  Manufacturers would be seriously affected if the trade grew too much or if the Commission were allowed to impose uniform prices across the Community. That would inevitably result in a decrease in manufacture and assembly in this country, with further consequences for employment, particularly among the component makers.
  The manufacturers realise and accept their responsibility to become as competitive in this country as in Europe, and great strides have been made by the Austin Metro. Enormous progress has also been made by Vauxhall at Luton, where the assembly of the Cavalier is nearly as efficient as the assembly in Germany and by the end of the year will be even more efficient. Good progress is also being made by Talbot at Ryton near Coventry.
  Our manufacturers are not complacent or hanging on desperately to a cosy, protected and profitable market. The whole European market is not profitable because of overcapacity and the incursion of cheap imports from Japan, Korea, Spain, Australia and South Africa—all markets to which our manufacturers have no access. In addition, we should not forget the politically priced vehicles from Eastern Europe.
  Manufacturers and traders are worried and I ask the Minister to think carefully before he and the Secretary of State for Transport go ahead with the proposals that they announced on 2 February. There is no common market while there is no fiscal harmony and no harmony in exchange rates or price structures.
  A political dimension threatens further the acceptability of our membership of the EEC. It is noteworthy that we have not yet achieved a common type approval system for motor vehicles throughout the EEC. Some member States make no provision for personal imports through the parallel trade. They are not possible without individual inspection of vehicles and the consequent expense and delay.
  I ask the Minister to hasten slowly on the proposed changes and strongly to resist attempts being made by DG IV of the Commission to impose findings without the matter having been brought to trial.
  12.49 pm
  The Minister for Consumer Affairs (Dr. Gerard Vaughan): I wish straight away to congratulate my hon. Friend the Member for Bromsgrove and Redditch (Mr.

  1495
  Miller) on securing this debate on a highly topical subject of great interest to British car buyers and of great importance to the British car industry generally. As he said, it is a complicated subject, but he explained it very clearly and his expert knowledge in these matters is greatly appreciated by all of us, as is the way in which he supports the car industry in this country—quite apart from the fact that he is chairman of the all-party motor industry group in the House.
  I listened with interest to what my hon. Friend said. I also read with great interest the various articles that he publishes on this from time to time. I was, for example, extremely interested to see an article only last Tuesday, 27 July, in the Birmingham Post, in which my hon. Friend pointed out the needs and problems of the motor industry. This is very much appreciated.
  Hon. Members will already be familiar with the controversy about parallel imports of cars from other parts of the EEC. I was glad that in this context my hon. Friend mentioned the recent lifting of hire purchase controls, which is highly relevant to the car industry. I was also glad that last Monday I was able to give him such an important answer on this subject. We hope that by lifting the hire purchase controls we have taken a further modest step to improve not only general trade but the British car industry in particular.
  I know that my hon. Friend appreciates that the controversy and concern about parallel imports follow speculation that the Government might restrict the exemption that personal car imports enjoy from type approval regulations. We all appreciate the importance of those regulations, as they ensure the safety standards of cars coming into the British market.
  I should say at once that we have no intention at all of restricting the exemption. It is possible, of course, to buy the same car at different prices in different parts of Europe. We take the firm view, however, that it is of benefit for us to have open competition. It is of benefit to the customers and also to the car industry. Wherever possible, we take the view that it is for the industry itself to manage its trading activities as efficiently and effectively as possible. I agree with my hon. Friend. We do not take the view that the car industry is in any way complacent about the situation, and it is making changes that it believes to be of benefit to customers generally. The statement made on 2 February by my right hon. Friend the Secretary of State for Transport made it clear that unless there were arrangements to ensure that type approval information was readily available to individuals and to independent dealers there would be no question of changing the present personal import arrangements. Therefore, on two fronts we are really saying the same thing.
  It is well known that over the past few years substantial differences in car prices have arisen between the United Kingdom and the rest of the Community. This country is not alone in experiencing such problems. There are also difficulties, for example, between Denmark and Germany. The main cause has been the greater strength of sterling, although it is not the only cause. Higher production costs in this country are also an important factor. There are also the other aspects to which my hon. Friend has referred.
  Price differences between the United Kingdom and the Continent have created great interest in personal car imports from other EEC countries. This in turn has been
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  associated with a growth in complaints that manufacturers are seeking to obstruct imports outside the normal dealer network. I do not wish to give a view on individual cases, although we can investigate them if and when that is necessary. Anti-competitive practices, as defined in the Competition Act, are, in the first instance, for the Director General of Fair Trading to consider.
  Most recent complaints have involved transnational trade and represent possible breaches of the competition rules of the European Community. These rules are administered by the European Commission which has, I understand, received a number of complaints alleging attempts by manufacturers, United Kingdom and non-United Kingdom, to restrict the parallel import of cars. My hon. Friend referred to allegations that it had not been possible to buy cars with the driving position on the correct side. We regard a strong, open European competition policy as an essential part of free trading provisions of the Common Market. We see this as a benefit in the long run to customers.
  Although the Commission administers the competition rules, we are free to express our own opinion on individual cases without prejudice to such views as we might wish to express on particular cases coming before the advisory committee or the European Court. I assure my hon. Friend that I would not subscribe to the view that price differentials on cars are due solely to attempts by manufacturers to maintain market segmentation.
  My hon. Friend referred briefly to the Commission's draft. I would emphasise that, at this stage, it is only a draft block exemption on motor vehicle distributor networks. The proposal is still at an early stage of discussion. There will be opportunities for those concerned to give their views before a definitive instrument is produced. We shall take all options into account, including those of the industry, before we come to any conclusions. I assure my hon. Friend that these are early days and that there is plenty of opportunity for views to be considered and dealt with.
  Mr. James Molyneaux: Will the Minister take into account what his hon. Friend said about the impact already of imports on the United Kingdom market? Will he study especially the figures that his hon. Friend gave relating to Northern Ireland which show that 25 per cent. of new registrations are composed of vehicles imported across the land frontier of the United Kingdom? Although the Minister says that these are early days and that there is still time available, will he accept the warning that this situation will escalate in Northern Ireland and in Great Britain unless speedy action is taken?
  Dr. Vaughan: I am glad that the hon. Gentleman has raised that matter. I listened carefully to the remarks of my hon. Friend. My hon. Friend also mentioned that type approval does not apply in Northern Ireland. This is a matter for the Northern Ireland Office. As my hon. Friend the Under-Secretary of State for Northern Ireland announced on 27 May, it is intended to introduce a type approval system in Northern Ireland as soon as possible. I mention that now as the hon. Gentleman has mentioned the Northern Ireland market.
  I am conscious of the industry's view that any sudden reduction in price disparities would have a harmful effect on the profitability of car manufacture in this country. I shall strive to ensure that the Commission is made well

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  aware of this. I feel, however, that these fears may be exaggerated, given the Commission's time scale on block exemption. I am sure my hon. Friend agrees that the interests of United Kingdom manufacturers, as much as United Kingdom consumers, lie in the establishment of genuine free competition throughout the Community. I have referred to this a number of times. It is important. This is an important subject for the United Kingdom car market. We are well aware of the problems. I congratulate my hon. Friend on having brought the matter before the House.

  Pensioners (Heating Costs)
  1 pm
  Mr. A. W. Stallard: During the past year, the problems of pensioners' heating costs have been raised several times. Early-day motion 656 is the latest in a series of motions on the subject. In the short time that it has been before the House, it has attracted 50 signatures from right hon. and hon. Members on both sides. During the Supply day debate on 25 January, the Opposition urged the Government to bring forward proposals for immediate assistance with heating costs.. My own contribution, the Fuel Standing Charges (Exemption For Pensioners) Bill, which received the support of all national pensioners' organisations, is still blocked by the Government. In addition, motions on fuel disconnection and repayment policies as well as gas price increases have been on the Order Paper. However, we are still no neareer anything resembling a comprehensive fuel plicy to assist pensioners to deal with the high costs of heating.
  All of us who support the urgent need for such a policy are anxious that something should be done before pensioners have to face the coming winter. We have quoted at length the cases of hypothermia that arise every year. We also know that the number of deaths generally rises in the winter. Although many deaths are brought on by the cold, the statistics mention them not as cases of hypotheria but as deaths from chest infections and heart disease. Thus, the problem of hypothermia is much more serious than we have been led to believe.
  We also know, as the Electricity Consumer Council report showed last year, that on average pensioners spend less on heating their rooms in winter than families do in summer. Over 40 per cent. of pensioners cannot even heat their bedrooms. The problem is mostly caused by the high cost of heating. From April 1980 to the present, the rate of increase in gas prices was nearly double that of the rate of increase of pensions. That fact was confirmed in a reply to my hon. Friend the Member for Aberdeen, North (Mr. Robert Hughes). Sir Dennis Rooke, chairman of British Gas, said:
  "I accept that gas prices have risen more rapidly than the rate of pension increases since April 1980."
  In the last six years, the increase in the fuel and light component of the price index, which includes all domestic fuels has far outstripped both the general price index and the increase in pensions. Many pensioners take great care over their fuel consumption and, in our opinion, make too many economies, sometimes with drastic results. Many keep their fuel consumption to a minimum and then they find that they have to pay much more in standing charges than for the fuel that they consume. Therefore, the price per unit or per therm for pensioners far exceeds that paid by the rest of us.
  Hon. Members on both sides of the House have produced many examples of hardships caused by that predicament, so I shall not weary the House by giving the scores of examples that I have received since I introduced my Bill on 12 May. However, I shall quote the latest, which I received only yesterday.
  A bill issued in June to one of my constituents shows that only eight units of electricity were used. This man tells me that in the winter, because of his strong objections to the standing charges and the resultant high price of the fuel that he consumes, he burns paraffin and uses candles. I

  1499
  imagine that now and again he has to switch on the light to see where the candles are. Those eight units of electricity consumed were shown on the bill as costing 43p. That was his total consumption but the standing charges and repayment charges amounted to £7·79—18 times the cost of the fuel consumed. Pensioners do not understand that; nor do the rest of us. It is ridiculous that that should be allowed to continue. I could quote many other examples, some of them worse and some of them not so bad. However, time limits me to this one.
  We have been joined in our campaign in recent months by four gas consumers' councils, and I wish to make brief quotations from each of their annual reports.
  The Scottish Gas Consumers' Council says in its annual report:
  "In March 1981 the quarterly standing charge was £6. It is now £9. We feel strongly that the standing charge should not be increased further. Scotland in particular was hit by Arctic conditions in January which sent gas bills rocketing for all our consumers and caused special hardship to pensioners, who could hardly have foreseen unexpectedly large bills dropping through their letterboxes in the spring. At the other end of the scale we have customers who have tried very hard to economise in their use of gas and are dismayed to find when the bill comes that the standing charge is more than the charge for gas."
  The North-Eastern Gas Consumers' Council said:
  "The Council was extremely critical of the increase called for in quarterly standing charges which, when the April and October increases are implemented, will mean that since 1976 these quarterly charges will have risen from £1 to £9Ċ20 per quarter. A break-down of the costs was provided by British Gas but Council were not satisfied with it. They rejected totally the proposed rises and requested the National Gas Consumers' Council to challenge them."
  The North-West Gas Consumers' Council said:
  "The Council is particularly concerned at the rate of increase of the quarterly standing charge. At the time of the announcement of the Government's current pricing policy, the charge was £1Ċ62. By October 1982, it will be £9Ċ20, a massive increase. Whilst the Council recognises the argument for each consumer bearing a reasonable share of the cost he incurs, it is alarmed at this rate of increase. It is particularly hard on the lower paid members of society to have to meet increases of this size in charges over which it is not possible for the individual consumer to exercise economy."
  The South-Eastern Gas Consumers' Council called for a review of the "philosophy and general policy" in the matter of standing charges.
  So these powerful bodies support the argument for a review and a serious look at fuel costs.
  It is only fair to say that the Government have one supporter. The North Thames Gas Board said:
  "During the year considerable concern has been expressed over the frequently increasing standing charge—£8Ċ00 per quarter from 1st October 1981. Many organisations and individual consumers have expressed a desire to see the charge withdrawn, particularly for certain groups of customers. Whilst we sympathise with those less able to pay we believe this remains a problem for the social services and not British Gas."
  It goes on to imply that the standing charge will have to be increased still further if the board is to meet its commitments.
  We await with interest the deliberations that we have been awaiting for many months of the Department of Energy and the Department of Health and Social Security which are looking into this problem.
  I expect that the Minister will say, first, that people can economise by using slot meters. This has been said before. But I remind the hon. Gentleman that there is now a standing charge on slot meters as well. One or two of the
  1500
  consumers' councils said that they were equally perturbed that these standing charges for slot meters would have risen, by October, by 83 per cent. since 1981. They were introduced only a little more than 12 months ago and already they have increased from £1Ċ80 to £3Ċ30. That needs a bit of explaining to ordinary folk who are suddenly getting these big bills.
  It may be that the Minister will say that these people can be or are being helped through the social security system single payment benefits. Despite the great claim that the Government made in January about this provision, it was summed up by Age Concern when it said:
  "It is nothing new for far too few."
  As I understand it, although the guidance was given to local DHSS offices and it was said that £255 million was to be spent on this scheme, only £65 million of it was new money, and of that only £21 million went to the over-70s. It did not apply to those pensioners under 70 who were on rent and rate rebates, so it was of very limited application and of very limited help, if it helped any at all. Age Concern was absolutely right when it said that it was
  "nothing new for far too few".
  It is known that many other people will probably lose entitlement even to that small claim when the switch to the unified housing benefit becomes operative. The new scheme should be extended immediately to all recipients of rebates and housing benefit.
  Members of Parliament, as well as Age Concern, have urged the Government to devise in consultation with interested organisations, a comprehensive fuel strategy, which will take account of the needs of the elderly and other low income consumers, and look at pricing, efficiency, insulation and regional problems.
  Two weeks ago the Minister, in reply to a letter from Age Concern, made it clear that the Government had no intention of devising a new policy. I gather from the tone of his reply that it is obvious that the Government's fuel policy is being determined by short-term Treasury dogma rather than by any other considerations. For example, on the issue of assistance with heating costs, the Minister said:
  "Much as we would like to extend it, I am afraid that in present economic circumstances the resources are simply not available to finance the kind of schemes which you appear to have in mind".
  He did not, of course, mention the colossal profits recently made by the various corporations, nor did he mention the effects of the Gas Levy Bill introduced recently by his Government, and the attempts being made by the telephone authorities to assist some consumers. He could have mentioned all of them in a far more constructive way, but he did not.
  I also had the impression from his reply that the Minister appears to be satisfied with current attempts to improve energy efficiency in buildings through insulation measures. Many of us are far from satisfied. In its letter to the Minister, Age Concern asked for improvements in the standard and extent of domestic insulation and energy conservation. Its case was supported by the recent report of the Select Committee on Energy, dealing with energy conservation in buildings, which recommended
  "a programme to insulate fully the houses of those in receipt of fuel allowances, currently costing the nation £240 million per year".
  The Select Committee laid the blame fairly and squarely at the Minister's door. It complained of the lack of political

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  will at the heart of Government which smothers the efforts of the Department of Energy's conservation division—a very serious charge, and one which should be answered.
  All that I have said so far surely shows that there is an urgent need for a comprehensive fuel policy, not based on short-sighted Treasury policy. The all-party group for pensioners knows well that it is only through Government initiative that there can be any hope for pensioners. It is clear to us from a recent meeting with British Gas that the corporation's hands will remain tied until the Government take a new look at the problem.
  In addition to the major reforms in pricing, social assistance and insulation that we want to see, we believe that the Government should stimulate simple measures in the interim to assist pensioners. I believe that the National Federation of Old Age Pensioners' Associations has recently suggested that in some areas the Economy 7 tariff, which operates within the time band 1 am to 9 am, could be better used to the advantage of pensioners and others. The federation has suggested that adjustments could be made to that time band that would make a tremendous difference to some people. I suggest that such constructive proposals and suggestions should be treated seriously. I hope that the Minister, together with the electricity boards, the pensioners' organisations and the charities, will examine the matter, and find an arrangement that will better suit the needs of pensioners and others in similar circumstances.
  Pensioners do not want to hear from the Minister pious words, expressions of sympathy or promises of help at some future unspecified date when and if the economic position changes, because too many by then will have died from cold. Pensioners want action now. Now is the time, during the summer. If we cannot solve the problem in summer when the weather is reasonable, there is hardly any point in solving it when the problem is at its worst. We need action now to reduce the tremendously high heating bills, to remove the fears and the worries of the people affected, and to relieve them from the savage winters and years and years of fuel poverty.
  Before the House adjourns for the Summer Recess, the Minister must tell us what he proposes to do before the next winter is upon us.
  1.16 pm
  The Under-Secretary of State for Energy (Mr. David Mellor): In responding to the hon. Member for St. Pancras, North (Mr. Stallard), may I first acknowledge the genuine and consistent interest that he has taken in this subject? I welcome his interest and that of other hon. Members on both sides of the House in recent months. The impact of fuel bills on poor consumers is a serious issue. It is one to which I have been paying considerable attention since I came to the Department of Energy last year and, before that, in representing a London constituency, as does the hon. Gentleman. I faced problems at my advice centres which were not much different from those which confront him It is a subject which, I can assure the hon. Gentleman, my colleagues at the Department of Energy, and certainly my colleagues at the Department of Health and Social Security, have in mind.
  We took a genuine interest in trying to deal with the problems of disconnections earlier this year, with satisfactory results, which were achieved only by paying attention to the industries, to the consumer councils and to the various groups which represent some of the
  1502
  consumers who were worst affected, and we were able to go forward on that basis. I hope that the hon. Gentleman was not suggesting that there was anything of a sham in the present investigation or that any of the groups which have supplied him with information do not have the opportunity to put their case to us in the knowledge that the points they make will be seriously considered.
  I can assure the hon. Gentleman that he will not hear any pious words from me today. I hope to paint in some of the difficulties that lie in the way of making some of the changes that he suggests. Those difficulties existed while the Labour Government were in office. Since he was able to curb his frustration about the presence of the standing charge at that time, he should realise that, when the review went forward in 1976, problems stood in the way. Although I can deliver today only an interim report on what has happened, I must tell the House that problems of some magnitude face the Government. The magnitude of those problems should be recognised by Opposition Members.
  I should like to make a few general comments on energy prices. We have had two substantial debates on domestic fuel prices this year and I shall not attempt to recover all the points made in them. It is important in a discussion of this problem to have a clear perspective. When the Government came to ofice, we deliberately set out to re-establish realism in energy pricing. We made it clear that prices needed to be sensibly related to costs and the market. Artificial price restraint, related not to the industry's efficiency but simply to subsidy and cross-subsidy, paid for by the taxpayer, could not continue.
  These increases affected all parts of the community and have now virtually fed through. In the case of gas, this year' increase is the last of the three-year programme. It will leave gas cheaper in real terms than it was in 1970.
  One particularly relevant statistic is that, over the last 14 years, the proportion of a married couple's old age pension needed for enough gas for a cooker and a gas fire has more than halved. If one goes back further, the price of gas has on average risen at about one third less than the rate of inflation over the last 20 years.
  It is also important to recognise that this has made possible the holding of industrial gas price rises to around 3 per cent. for both 1981 and 1982, a move that has been widely appreciated throughout industry at an especially difficult time. We could not perpetuate the situation that we found when we took office, when gas to industry was 25 per cent. more costly than gas to the home, even though supplying gas to industry was cheaper.
  The last two annual increases in electricity charges have both been held below the rate of inflation, and in addition a rebate averaging about was given on bills in the first quarter of this year.
  The price of domestic coal has also increased by less than the rate of inflation for each of the last two years. In comparison, the Government have kept their pledge to maintain the real value of the pension against general inflation.
  I should now like to look in more detail at the problems faced by pensioners and other poor consumers. As the hon. Gentleman said, hon. Members have voiced considerable concern about the difficulties faced by pensioner; in particular in paying their fuel bills. I entirely understand, respect and share that concern.
  A number of suggestions have also been made, not only today, about possible ways of assisting pensioners with

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  their fuel bills. The hon. Gentleman reminded us of his proposal for the simple abolition of standing charges for pensioners, a subsidy aimed at cutting their overall bills by a given proportion and alternative tariff structures with higher unit charges and no standing charge.
  I am not in a position today to give a definite answer to any of the proposals. One of the major purposes of the review that I and my hon. Friend the Under-Secretary of State for Health and Social Security have been conducting has been an investigation in depth of the possibilities of such proposals. However, a number of very difficult questions must be answered—they cannot simply be dismissed as pious words—before schemes such as these could be endorsed as sensible alternatives or additions to the current structure of tariffs and financial assistance.
  The most crucial question is probably "Does it provide worthwhile help to those most in need in the most cost-effective manner?" Let me illustrate the problem by referring to the hon. Gentleman's own suggestion of abolishing the standing charge for pensioner households. At first sight, the idea may appear simple and attractive to eliminate an aspect of bills that we all know causes widespread misunderstandings and annoyance.
  In the first place, the Government do not fix standing charges. That is entirely a matter for the industry, and it is for it alone to decide the level of standing charges. Secondly, such charges are not an arbitrary tax designed to raise unnecessary revenue from captive consumers. They are intended by the industries to reflect the real costs incurred in keeping supplies constantly available to consumers. It can be argued that these costs are different from the cost of generating or supplying the gas or electricity used by the consumer, which falls under the unit charge. Certain costs, it is said, exist regardless of the amount of energy consumed and are involved in installing and maintaining the system of supply.
  In the light of what the hon. Gentleman said about the consumer councils, I should make it clear that the principle of the distinction between the standing charge and the unit charge has been fully endorsed, not only by independent studies such as those carried out by the Price Commission established by the Labour Government in 1979, but also by the national electricity and gas consumer councils. In my meetings with the councils during the review, I have been told that they believe there is validity in the distinction in principle between the standing charge and the unit charge.
  The hon. Gentleman mentioned the observation of one regional consumer council about the increase in gas standing charges. Before 1979 there was a three-tier tariff with an additional charge for the first 52 therms of gas supplied, which bit especially heavily on poor consumers who were also small consumers. They paid a disproportionately high amount for their gas. That tariff was abolished. Had the two-tier tariff that we have been in force in 1979, the standing charge would in reality have been not the figure that the hon. Gentleman quoted of just over £1 a quarter but over £6 a quarter.
  There are two distinct issues. It is one thing to decide whether the distinction between standing charges and the unit charge is in principle a proper one on which to base the tariff system. It is quite another thing to be sure that the actual costs imposed in the standing charge reflect the optimum efficiency of operation of the industry imposing
  1504
  the charge and thus can be considered as being fairer for consumers. That is distinct from the question whether there should be a distinction drawn in principle between a standing charge and a unit charge.
  We are dealing with large sums in considering the various proposals for relief that have been put forward. As the money would have to come from the pockets of taxpayers, many of whom are not well enough off to take increases in their taxation at this moment, I must stress that to abolish the pensioner household standing charge would cost about £300 million in revenue. The taxpayer cannot be expected to make that up. The cost would not go away immediately, and perhaps it would never go away. The only way in which the industry could make up the shortfall would be by increasing the unit charge, which would pose difficulties.
  I have shown sympathy to pensioners who have come to my advice centre to show me a bill on which the standing charge is larger than the charge for the number of units consumed. Our research shows that in only 13 per cent. of poor pensioner households is the standing charge higher than the units charged. A number of poor consumers, through no fault of their own, are also large consumers. To move from the standing charge to the unit charge would merely transfer the difficulties of one poorer-off section of the community to another section. That is why some of the groups that represent poorly-off sectors in the community have not shown great enthusiasm for abolishing the standing charge as an end in itself. They recognise that for some large consumers such a move would pose problems.
  These difficulties are not new. I do not want to be partisan but I do not want the hon. Gentleman to make his criticism of the Government more bitter by making a few partisan observations about whether this Government, above and beyond any previous Government, are concerned to alleviate the problem if they were able to do so. The previous Labour Government carried out their own thorough study of alternative tariff regimes, which was designed to help all consumers, and published the results in a document on energy tariff reform in 1976. They met great difficulties, as we have, in finding a way of using tariff adjustments as a mechanism for helping poor consumers that did not carry severe penalties for others in great need.
  General tariff adjustments, concessionary tariffs and free fuel allowances were all examined in depth by the previous Labour Government. It was none other than the right hon. Member for Bristol, South-East (Mr. Benn) who summed up the Government's conclusions on introducing the study document by saying:
  "The Government had concluded that none of these possibilites offer a satisfactory way of helping poor consumers with their fuel bills."
  Although we have not yet drawn conclusions from our study, I must point out that if standing charges for domestic consumers were simply abolished and we were to recover all the revenue through the unit rate, small bills could be reduced by up to a maximum of about 65p a week. But the effect on those consumers who already face large bills could be extremely serious. Those who, through no fault of their own, are heavily reliant on electricity could face bills increased by about £2 per week.
  I am sure that I need not remind the hon. Gentleman that our direct assistance to poor consumers is the highest ever. More than £250 million is to be paid out in heating

  1505
  additions this year and about 1½ million pensioners will benefit by between £1Ċ65 and £4 a week. In the year from November the total will increase to more than £300 million. That increase protects its value against a rise in fuel prices. It shows that the Government are not complacent about the plight of poor consumers. Our assistance is not the token relief that was offered by the previous Government in their electricity discount scheme. It is a considerable addition to helping the poor to pay their fuel bills, which we recognise are an imposition.
  As the hon. Gentleman will appreciate, this must be an interim report on standing charges. We shall undoubtedly return to the matter in the autumn and, although I could not accept all of the hon. Gentleman's points today, he raised some interesting matters that I shall examine and bear in mind in bringing the review to a conclusion.

  Victoria Hospital, Romford
  1.31 pm
  Mr. Michael Neubert: The history of the matter that I raise today is a sorry story. As one would expect from a hospital called "Victoria", it was opened nearly 100 years ago in celebration of Queen Victoria's golden jubilee on land donated by a public benefactor, William Mashiter. The hospital was funded by public appeal in the tradition of public spirit and generosity that can be seen today in the money that has been raised and the enthusiasm generated for this hospital under threat.
  The hospital was further extended as a memorial to King Edward VII in 1912, and in 1939 the foundation stone of a three-storey building was laid by Lady Neave. Throughout years of service to the community, the hospital has gained nothing but praise, yet it is now proposed to close the hospital as a surgical unit and to transfer the acute in-patient services elsewhere. Most people find that astonishing. The people of Romford provided the hospital by public subscription. They regard it as "their" hospital and, having seen it taken over by the National Health Service in 1948, they now see the work it does threatened with closing.
  As their Member of Parliament, I welcome the opportunity of this Adjournment debate on the last day before the Summer Recess to express their outrage and disbelief at the proposals. It is the second time that I have raised the matter on the Floor of the House. I do so because of its importance to Romford. The first occasion was on 23 May 1979, when I took the earliest possible chance of seeking Government support for the retention of the hospital. My hon. Friend the Under-Secretary of State may remember that he was present then but in a different capacity.
  The then Minister for Health, now my hon. Friend the Minister for Consumer Affairs, responded to the debate by assuring the House that there was
  "a continuing place for the small local hospital where there is a useful and satisfactory role for it."—[Official Report, 23 May 1979; Vol. 967, c. 1193.]
  There can be no doubt about the Government's commitment to small hospitals. Within a fortnight of her historic election as Prime Minister, my right hon. Friend said in the debate on the Address on 15 May 1979:
  "I have great sympathy with the cause of small local hospitals."—[Official Report, 15 May 1979; Vol. 967, c. 81.]
  On 24 May 1979, in answer to a question from me about the Victoria hospital, 91 years to the day since it was opened by Mr. J. Theobald, MP, who I presume must have been one of my predecessors, the Prime Minister said:
  "we approach the question of small hospitals with considerable sympathy."—[Official Report, 24 May 1979; Vol. 967, c. 1226.]
  Later that same year the Minister for Health told the Conservative conference:
  "I can assure you that no closure of a small unit or hospital will be agreed by us unless we are certain that it is unavoidable and in the best interests of the patients … We must not have false economies. We must not close down small hospitals which are deficient yet vital to the local community."
  True to his word, during his three years of office, the then Minister for Health was able to save several small hospitals. It was only his personal intervention last summer, following a visit, that averted the closure of the Victoria and allowed this year's reprieve. I hope that his successor, my hon. and learned Friend the Minister for

  1507
  Health, will take the same view, will have equal success and will be able to find a way to save Victoria hospital. The hopes of many thousands of people now rest upon his decision.
  The value of the surgical unit cannot be disputed. About 2,000 operations are carried out there each year. They are, in the slightly chilling jargon of the medical profession, elective cold surgery—minor operations such as ruptures which are for conditions not of the greatest gravity but painful, disabling and inconvenient.
  In all my 13 years' association with Romford, eight years as its Member of Parliament and before that for five years as its parliamentary candidate, I have never heard a single complaint about the hospital, only warm appreciation. Patients come by appointment, make a rapid recovery in the restful surroundings of the cottage hospital and resume their active life with the minimum of delay.
  The advantages of a small hospital are evident everywhere. Its human scale is comfortingly intimate, the staff are attentive and intensely loyal, there is little noise at night and sleep is not disturbed by emergency admissions, and the homely atmosphere and attractive garden encourage recuperation.
  Why should anyone in his right mind want to close this unit? The answer is that the district health authority and its predecessors have the embarrassment of a spare ward and operating theatre in the district general hospital on which they have unwisely spent an unnecessary amount of public money in recent years and which they desperately need to justify. To that end the district health authority is prepared to discard the proven public asset, Victoria hospital, against almost total opposition from the community that it is there to serve.
  The debate is too short to go into all the details of the complex and unhappy history of this matter. As my hon. and learned Friend has kindly agreed to receive a small deputation led by me, with representatives of the nursing and medical staff as well as the general public, before he makes a final decision, it would be more appropriate for me to present our detailed case then.
  However, I should like to make one general point which the Government should study as a matter of wider interest; that is whether present procedures ensure democracy in the National Health Service. The division of opinion on this issue can be summarised as: "for" the proposal to close the Victoria hospital as we have known it for almost 100 years—the regional health authority, the district health authority and the community health council, all appointed, unelected bodies that are not directly accountable to the public; "against" the proposal—the Member of Parliament, the Member of the European Parliament, the member of the Greater London Council, and the borough council, all of whom are elected representatives of the public and accountable to them, and 45,000 members of the public themselves who put their signatures to a petition of protest which I presented to my hon. Friend last summer.
  Whose view should prevail? Whose Health Service is it, anyway? The defection of the community health council has been a particular disillusionment. From my experience, I cannot now confidently support its continuance. Originally, the Havering and Barking community health councils were foremost in opposition to the proposal. They organised a crowded town meeting
  1508
  over which they invited me to preside and from which many were turned away, and they set up an action committee to fight the closure.
  Later, the CHCs were quietly taken on one side by the area health authority and threatened with the prospect of never getting the child assessment unit and the psychogeriatric unit which they badly wanted, and which are part of the proposals for the re-use of the Victoria, unless they agreed to the closure of the surgical unit. Overnight they did a complete turnabout, disowned their own action committee and proceeded to rewrite their part in the history of the matter in a way equalled only by Soviet historians covering up the enormities of the post-revolutionary Stalinist regime. To explain their volte-face they suggested that the area health authority had changed its policy and that the original proposal was not only to close the Victoria as a surgical unit but to dispose of the buildings as well. That was never the case.
  The first proposals, like the second proposals and now the third proposals, were all for re-use, including, to start with, the proposal that part of the hospital should be used for offices for health administrators, an idea so outrageous that the area health authority quickly recoiled from the public anger that it aroused and dropped it in favour of more beneficial uses.
  If there is any postgraduate student who wishes to research the struggle between bureaucracy and the public, he could not choose a more revealing case study than this one. He would be able to examine how a hospital which, at the maximum, had 101 beds has gradually had the life snuffed out of it until it now has only 32 beds, how the most recent reduction of 16 beds was the closure of the children's ward in February 1978 at short notice, without consultation and within about 72 hours, how the authority was able to do that because it called it a "temporary" closure, and how it is still closed today, four and a half years later.
  That student would be able to study how the same authorities who profess concern for underused assets could leave the resultant empty wards to gather dust for years on end and let the grass grow knee-high in substantial grounds, undeveloped and at prime residential value. He could even calculate how many hundreds of thousands of pounds such stewardship has cost the taxpaying public in wasted opportunity and avoidable expenditure elsewhere.
  It would be better to look to the future. There could be positive, alternative plans to include the continuation of the surgical unit at Victoria hospital and there should be. It is clear that if the service is transferred to another ward at Oldchurch hospital, which has seven fewer beds, presumably mixed, and which is vulnerable to the prior claims of accidents and emergencies, hospital waiting lists will lengthen and many members of the public will be inconvenienced and kept off work longer than necessary. Alternative uses could certainly be found for the space at Oldchurch. Already, where previously it was said that two upgraded wards would remain empty, there is now only one. The site is overcrowded and other specialties are in need of expanded facilities. The claimed saving of £40,000 revenue a year is not a small sum, but it is a minor matter compared with the millions spent in the district and in these terms, sufficiently marginal to be capable of presentation to suit the case, without challenge from amateur outsiders.
  The Minister will appreciate that the general public has no specialist resources with which to combat such plans,

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  with which it can test the validity of the financial calculations or explore the possibility of alternative strategies. I hope that the Minister's expert staff can come up with a more acceptable alternative. Neither of the proposed new uses for the Victoria hospital is ideal. The district health authority acknowledges that the psycho-geriatric unit would be better located in the London borough of Barking and Dagenham next door, and to place the child assessment unit at the Victoria hospital rather than in association with a district general hospital is contrary to the recommendation of the Court report and Government policy. There would certainly be space for one of those services if surgery were continued, and the possibility of extra development in the future, given the will.
  As long as the district health authority remains dogged in its defence of the original mistaken decision, other constructive alternatives will be stifled, if not stillborn. I hope that my right hon. and hon. Friends at the Department of Health and Social Security will be able to liberate the debate and find a solution that puts patients and public first.
  1.45 pm
  The Under-Secretary of State for Health and Social Security (Mr. Tony Newton): I acknowledge the point made by my hon. Friend the Member for Romford (Mr. Neubert) that, to a degree, we have a common interest in at least some of the hospital services in his area, as many of my constituents use some of the facilities at Oldchurch hospital and its neuro-surgery unit. I vouch from experience for the vigour with which my hon. Friend fights for his constituents' interests. They are lucky to have him as an advocate on this and many other issues.
  It is important that the proposed change of use of Victoria hospital should be understood in the context of health provision as a whole in the Barking, Havering and Brentwood district, and the district health authority's strategy. It is also important—I acknowledge this readily in the light of what my hon. Friend said—that full account should be taken of local views when the future of a valued local hospital is being considered. I emphasise that this is not a total closure proposal, but technically a change of use. I hope that we can agree that there is a useful role for the hospital in the future as a small hospital. The argument is about what the role should be.
  The new Barking, Havering and Brentwood health authority is served by two district general hospitals, the Oldchurch and Rush Green hospital complex, which serves Dagenham and the western half of Havering, and Harold Wood hospital, which serves Brentwood and the eastern half of Havering. In recent years extensive development has been carried out at Oldchurch hospital in the form of six new operating theatres, an intensive therapy unit, and the upgrading of two wards. At the moment the sixth operating theatre and ward accommodation are unused due to shortage of revenue. Within this overall pattern of acute services in the district, the Victoria hospital in Romford has been playing a small but valued part. Victoria hospital is a 32-bed acute hospital situated on a prime site in a residential area about a mile and a half from Oldchurch hospital. In the main patients have been "intermediate" or "minor"—to use technical terms—surgical cases.
  During 1979 and 1980 the former Barking and Havering area health authority consulted on the transfer of
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  acute services from Victoria hospital to Oldchurch hospital, and on the future of Victoria hospital. The authority's initial plan was to transfer the case load of Victoria hospital to the spare theatre and ward at Oldchurch, releasing revenue to Oldchurch by the closure of Victoria hospital. That proposal was unacceptable to the former Barking and Havering community health councils, and it aroused widespread local concern, which was raised effectively in a previous Adjournment debate by my hon. Friend on 23 May 1979.
  In February 1981 a second proposal was advanced which linked the rationalisation of acute services in the district to the development of the priority services. It was proposed that the 32 surgical beds and the hearing aid and orthodontic service at Victoria should still be transferred to Oldchurch. However, out-patient services at Victoria would be retained and transferred from Harefield house, which is situated in the grounds of the hospital, to the main hospital building itself. That would enable the sale of a potentially desirable and valuable part of the site, thus liberating funds for use in making improvements to Victoria hospital. These improvements would be made—my hon. Friend acknowledged this fairly—to provide a much needed 30-place psychogeriatric day hospital and a paediatric assessment unit.
  The proposal must be assessed in the context of the district's own financial and strategic position, and the strategic position of North East Thames regional health authority as a whole. Barking, Havering and Brentwood health authority is adequately provided for in the terms of the Resource Allocation Working Party, and cannot expect any growth money in the foreseeable future.
  There is therefore a need to make economies in the acute services so that the regional strategy of redistributing resources to make greater provision within the district for the priority services can be pursued. The district is deficient in some aspects of priority service provision. For example, it has no service for elderly people with psychiatric disorders apart from a service provided from a large mental illness hospital. We fully support that basic strategy.
  There are also some important local considerations involved in the decision. The district health authority wishes to concentrate all its acute services in the western half of the district on the Oldchurch and Rush Green district general hospital complex where there are appropriate back-up facilities. It is also keen to utilise fully the new capital developments at Oldchurch and Rush Green hospitals. If acute work were to continue indefinitely at Victoria hospital, substantial upgrading would be required there, but capital is urgently required for other purposes, such as those that I have mentioned. In the event, the latest proposals have gained the support of many local bodies and interested parties.
  One significant objection to the proposals, which ray hon. Friend mentioned, is the fear amongst some of those involved that there would be longer waiting lists for "cold" surgery if the proposals were to be implemented. However, the district health authority is satisfied that Oldchurch hospital will be able to cope with the increased load. It points out that if the proposals were implemented, surgery would be carried out in upgraded, modernised, and safer buildings, which would lead to greater efficiency. It is also looking at the possibility of reserving

  1511
  certain beds at Oldchurch for "cold" surgery and the possibility of reallocating one or more extra beds to oral surgery.
  I said at the beginning that it was important to consider the strategic context of the current proposals, and I hope that I have shed some light on this aspect of the proposed change of use. My hon. Friend has also, rightly, emphasised the importance of taking account of local opinion in these matters. I believe that that is precisely what has happened throughout the extensive discussions which have taken place on the future of Victoria hospital over the last three or four years, in which my hon. Friend has played a leading and important part.
  Local objections from some interested parties, including Barking and Havering community health councils and my hon. Friend, led to the rejection of the former area health authority's initial proposal to close the hospital completely.
  Mr. Neubert: It is important that I challenge that description of the original proposal. It was not proposed to close the hospital completely. The original proposals were for a change of use, as are the present proposals.
  Mr. Newton: I note what my hon. Friend says, but I understand that the initial proposal at least came closer to closure than do the current proposals.
  In February 1981 the proposal that the hospital should have a new role was agreed by Barking and Havering community health councils, which opposed the original proposals. At that stage, the main opposition came from the Victoria hospital action group, with which my hon. Friend is associated.
  The procedures for the closure and change of use of health premises are set out in guidance issued by the DHSS in 1975. The aim of these procedures is to enable resources to be redeployed with the maximum speed and simplicity consistent with adequate local and, where relevant, national consultations. The guidance states that if the community health councils involved agree to a proposal and the Secretary of State has not asked to be consulted further before approval, the health authority—in this case, the former area health authority—may proceed, notifying the regional health authority and the Department of the decision.
  1512
  In this particular case, because of the local disquiet, the former Minister for Health, my hon. Friend the Member for Reading, South (Dr. Vaughan), took a particular interest in the consultations. On hearing of the area health authority's decision to proceed with the proposed change of use, he visited the hospital to inform himself of the strength of local opinion. He then decided to take the unusual step of intervening in the matter in spite of the community health council's agreement to the proposal. The area health authority was therefore requested to submit its proposal to the regional health authority, which would refer it to the Secretary of State if it supported the area health authority.
  Following careful consideration, the regional health authority asked the former area health authority to reexamine its proposals and present the results of its reexamination to the Barking, Havering and Brentwood health authority so that the new authority could give the matter urgent consideration sand report its decision by July 1982.
  In the event—this is what has given rise to my hon. Friend's concern and to today's debate—the new authority endorsed its predecessor's view. As my hon. Friend also said in no uncertain terms towards the end of his speech in criticising precisely that decision, the new community health council has also accepted the proposals in their entirety. The proposal has now received the agreement of the regional health authority and has been referred to Ministers.
  I am afraid that there is very little that I can add to what my hon. Friend has said today, except to confirm what he said at the end of his speech. My hon. and learned Friend the Minister for Health has agreed to meet my hon. Friend and a small deputation to discuss the whole matter in more detail before he makes the decision that he is now called upon to make. As I am sure my hon. Friend is aware from his knowledge of the Minister—and I happily confirm this—my hon. and learned Friend will give my hon. Friend's representations and what is said at that meeting very careful consideration before reaching his final conclusion.
  I shall, of course, also draw my hon. and learned Friend's attention to what has been said today, both about the specific issue which is to be the subject of the meeting and the wider points that my hon. Friend has made about the whole process surrounding proposals for closures and changes of use of hospital facilities of this kind.

  Merchant Navy
  1.58 pm
  Mr. R. C. Mitchell: During the last war, thousands of members of the Merchant Navy were killed and wounded in the service of their country. Throughout those six long years, the Merchant Navy provided the lifeline to this country, especially in the period 1940–41 when Britain stood alone—supplying this country with food and materials and subject to constant attacks from U-boats and enemy surface ships.
  After the United States came into the war in December 1941, the Merchant Navy played a vital role in bringing troops from the United States to Europe to take part in the conflict. My father, who was a member of the Merchant Navy for 50 years, sailed on the "Queen Mary" during the war and I understand that on one famous occasion she carried 18,000 American troops from New York to Southampton.
  The Merchant Navy will also be remembered for its part in the Murmansk convoys, supplying a lifeline to the Soviet Union, which was our ally during the war.
  At the end of the war the Merchant Navy was given its due credit. In the victory celebrations in London, the Merchant Navy marched side by side with the three Services. That was only right because it had played a vital part in the survival of this country. Sadly, after the war, the Merchant Navy tended to return to being just another industry. Like other industries, it gradually met the full weight of foreign competition. Since 1975, the United Kingdom merchant fleet has declined from 50 million tonnes to 29 million tonnes, a loss of 40 per cent. Among the ships that have gone are many cargo liners, which, according to the General Council of British Shipping, would have been most valuable to this country in time of war. It is, however, difficult to find in any defence White Paper in those years any reference to the Merchant Navy. I cannot find any mention of the Merchant Navy in the latest "Statement on the Defence Estimates".
  It was not until the Falklands operation that the Merchant Navy again hit the headlines. Everyone recognises that the operation could not have been mounted without the requisitioning of ships such as the QE2, the "Canberra", the "Uganda", the "Atlantic Conveyor" and many others. I recall two years ago taking part in a march through the streets of Southampton. I do not often take part in marches and that sort of protest. I was, however, proud to take part in that march preceded by the Union Jack and the Red Ensign and slogans that read "Keep the QE2 British". At that time, there were strong rumours that the QE2 would either be sold to a foreign shipping line or transferred to a flag of convenience.
  How could troops and supplies have been carried to the Falklands without the ships I have mentioned? Had they been sold to foreign shipping lines, they could not have been requisitioned. Even if they had been placed under flags of convenience and remained under British ownership, it would have been much more difficult to requisition them, as the Government recognised in a written answer that I received several months ago.
  It is a matter not only of the ships but of the men. It is an irony that there were tremendous celebrations in Southampton when the "Canberra" returned in triumph. It was not generally realised that many of the crew were volunteers for the Falklands who, on their return, were to
  1514
  be replaced by cheaper foreign labour. I am not blaming P & O for that. It was well known beforehand. Many of those who volunteered to go to the Falklands knew that it was a one-off job. This shows clearly that in times of conflict we need British seamen as well as British ships. We called for volunteers to go on "Canberra" to the Falklands. Since 1975, the number of British officers in the Merchant Navy has fallen from 41,000 to 28,000 and the number of United Kingdom ratings from 38,000 to 26,000. All the signs are that the decline will continue until steps are taken to halt it.
  The Falkland Islands conflict has clearly shown that the defence of this country requires adequate ships flying under a British flag and staffed by British officers and crew. My contention is that the Merchant Navy should be regarded as an essential part of Britain's defence strategy. If necessary, money should be made available from the defence budget to ensure that we keep in this country a strong Merchant Navy. In a sense, the principle has been conceded by the Government already in the replacement of the "Atlantic Conveyor". Originally, it was my intention to say a lot more about the "Atlantic Conveyor", but all I say now is that I am pleased that the Government have yielded to pressure from all quarters—unions, employers and the general public—and come to an arrangement with Lord Matthews to have the replacement built in a British shipyard.
  I do not expect the Under-Secretary of State to give me the full details, but I ask him two specific questions. Will the money involved come mainly from the defence budget? Is the Ministry insisting that the replacement "Atlantic Conveyor" has modifications to meet possible future defence requirements?
  As I understand it, talks have been going on for some time between the General Council of British Shipping and the Ministry of Defence about possible defence involvement in the design of new merchant ships and the modification of existing ones. I quote from a brief which the council was good enough to send me. It says:
  "The kind of defence features we have in mind are:

  (i) The installation on selected merchant ships of anti-missile `kit', the kind of 'kit' which could throw up `chaff' to divert missiles (if the `Atlantic Conveyor' had been so equipped, she might never have been hit) or containerised anti-missiles.

  (ii) More tankers to be equipped with RAS (Refuelling at Sea). The importance of this was shown in the Falklands conflict when RAS equipped tankers were needed immediately and proved essential to the Task Force.

  (iii) Containerships can be developed for a helicopter and possibly a Sea Harrier role—the Arapaho project. This has been talked about for years but nothing has been decided. The necessary merchant ship tests have not been carried out.

  (iv) The possibility of inclusion in some new ships, e.g oceangoing ro-ros, of strengthened decks (for Harriers and helicopters) and the installation of lifts so that aircraft can be parked below the main deck."

  Those are just some examples of how there could be cooperation between the Ministry of Defence and the shipping industry to ensure that in any future conflict similar to the Falklands which might happen elsewhere we had an equipped Merchant Navy ready to play its full part.
  I hope that in the review of the Falklands operation the Ministry of Defence will take full account of the role played by the Merchant Navy. I quote from Admiral Sir John Fieldhouse, the Commander-in-Chief of the Fleet, who said:

  1515
  "I cannot say too often or too clearly how important has been the Merchant Navy's contributions to our efforts. Without the ships taken up from trade, the operation could not have been undertaken, and I hope this message is clearly understood by the British nation."
  I hope that this message is clearly understood by the Government.
  The conclusion must be that in addition to the three Services—the Army, the Royal Navy and the Royal Air Force—there is a fourth arm of defence, the Merchant Navy. Appropriate steps should be taken to ensure that the British Merchant Navy—I stress the word "British"—does not decline further. In that, I hope that the Ministry of Defence will play its part.
  2.08 pm
  The Under-Secretary of State for the Armed Forces (Mr. Jerry Wiggin): The hon. Member for Southampton, Itchen (Mr. Mitchell) has rightly drawn attention to the relationship between all the Armed Forces, but particularly the Royal Navy, and the Merchant Navy. This relationship, which is one of interdependence, is of great national importance and of long standing. Therefore, I welcome the opportunity to say how my Department sees the role of the Merchant Navy, which was aptly described a moment ago by the hon. Gentleman as the fourth arm of defence.
  The hon. Gentleman will realise that part of what he said—for example, his remarks about the size of the British merchant fleet—is a matter for the Department of Trade rather than for my Department. But I shall draw his remarks to the attention of my right hon. and noble Friend the Secretary of State for Trade.
  Much of what the hon. Gentleman said touched on my own interests, and it is on these and on the part that the Merchant Navy plays in defence thinking that I propose to focus my remarks.
  This debate takes place against the backcloth of the Falklands operation in which the Merchant Navy played such an important and impressive part. My hon. Friend the Minister of State for the Armed Forces, opening last week's debate on the Royal Navy, said that he wished to pay a well deserved tribute to the contribution of the Merchant Navy, and I make no apology for reverting to that theme both because I believe that the House will wish to know a little more about the scale and nature of the contribution and because a great deal has been learnt from the events of the past few months. These lessons still have to be fully analysed, in this matter as in others. Inevitably that means that they will be taken into account by the Naval planning staffs in due course.
  As my right hon. Friend the Secretary of State said earlier in the week, the part played by the Merchant Navy will feature in his White Paper on the lessons of the Falklands operation which, as the House knows, is to be published later in the year.
  The taking up of ships from trade is no latter-day phenomenon. Half of Nelson's fleet at the battle of the Nile were merchant ships. More recently, a large number of merchant ships were engaged in support of our defence effort during the Second World War.
  There was reference in the Navy debate to the part played by the "Queens" as troop ships during the Second World War, and I was interested to hear of the contribution made by the hon. Gentleman's father in that operation.
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  Indeed, I remember my hon. Friend the Member for Wells (Mr. Boscawen) saying with what warmth he learnt, as a member of the invasion force, of the landing of a large number of American troops from the "Queen Elizabeth" in Cherbourg, and how confident he then felt that the invasion would proceed with success from that point. There are many examples, and that is just one of them.
  Our plans for a time of national emergency envisage a number of ships being taken up to assist the Armed Forces—tankers, roll-on roll-off vessels to ferry men and equipment to the Continent, trawlers to operate as mine counter measures vessels, and so on. Therefore, the framework for chartering and requisitioning ships already existed. The operational and logistical staffs did not have to start from scratch, but the characteristics of the ships taken up from the trade, or STUFT, as they quickly became known—my Department insists on the use of initials in all cases—were in many cases different from those likely to be needed in an operation within the NATO area, not least because of the vast distance that had to be covered and the very real logistical problems that had to be solved.
  So far, 58 ships have been taken up. The House will realise that the process has not yet stopped. Many ships have now returned to the United Kingdom and have been returned to their owners, but others are still needed to support our ships contributing to the naval force that will need to be maintained in the South Atlantic for the foreseeable future. The ships taken up cover a wide spectrum which amply illustrates the logistical support necessary to sustain an enterprise of this kind at the other end of the globe.
  Passenger liners such as the QE2 and "Canberra", or ferries such as the "Norland", were used to carry the troops who fought so bravely to recover the Falklands. The passenger liner "Uganda" was taken up at Naples, in the middle of an educational cruise, to be repainted and hastily converted into a hospital ship. Five trawlers were taken up to be used to sweep the waters off the Falklands which had been feared to have been mined. Ships such as the "Atlantic Conveyor"—so tragically sunk in the attacks on the task force—and her sister ship the "Atlantic Causeway" were used to ferry helicopters and Harrier aircraft.
  A number of ships were used to carry ammunition, heavy equipment and general stores. Those and a large number of tankers were acquired to supplement the vessels of the Royal Navy's own support fleet, the Royal Fleet Auxiliary. Other ships were taken up as floating workshops, as despatch vessels, and to lay moorings. Last, but by no means least, there were the tugs "Salvageman", "Yorkshireman" and "Irishman", which similarly had an important part to play. It was by any standards a formidable armada. If ranged end to end—a typically useless statistic—the vessels would have stretched from Nelson's Column to the Royal Naval College at Greenwich.
  During the Falklands operations, requisitioned and chartered ships carried over 8,000 personnel, 30,000 tons of freight, over 300 vehicles, 18 Harrier aircraft and about 80 helicopters to the Falkland Islands. Overall, about 12 million meals and 1 million operational ration packs were carried south, and on 14 June 420,000 tons of fuel were in the supply chain between the United Kingdom and the

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  South Atlantic. Latest figures indicate that more than 670,000 tons of fuel have been transported to support the operation.
  It is no exaggeration to say that the actual taking up of ships and the preparation for service in the South Atlantic went like the proverbial clockwork. That was principally due to the longstanding co-ordination of defence planning for merchant shipping between my Department and the Department of Trade. That brings me to the points raised by the hon. Gentleman. This enabled both Departments to tackle the operation with mutually-understood roles and led to the Department of Trade's rapid identification and acquisition of suitable ships followed by their handover to the Ministry of Defence for conversion to their designated role.
  Nineteen ships were fitted with flight decks or helicopter operating platforms. Many were equipped with gear to enable them to refuel at sea and others were adapted for self-defence, including the installation of special communications systems.
  Mr. R. C. Mitchell: The Minister said that the size of the merchant fleet was primarily a matter for the Secretary of State for Trade. Surely that is only partly so, because he has listed many of the ships that were requisitioned. However, had those vessels been sold or transferred to flags of convenience, they could not have been requisitioned. As a result, the Ministry of Defence has a vital role in assessing the size of the British merchant fleet.
  Mr. Wiggin: The hon. Gentleman's point has substantial implications for my Department, because in the event of any conflict we rely enormously on civilian resources. We are debating the Merchant Navy, but the hon. Gentleman can imagine what we would do with civilian plant and personnel in the event of war. The role of my Department is constantly to be aware of what is available.
  We keep an eye, but only an eye, on such matters as the size of the trawler fleet, bearing in mind that there is a wartime role for such ships. Given the way in which Whitehall is organised, it is right and proper that the Department of Trade should look after all merchant shipping. Our interest, involvement and responsibility is simply to be aware of what is available. I understand why the hon. Gentleman made that point, and I have considerable sympathy with it, especially in view of some of the activities of requisitioning the ships that took place in the Falklands operation.
  The average fitting-out time was a mere three days. That is a remarkable testimony to the enthusiasm and professionalism—not to mention the sheer ingenuity—of the naval and commercial yards involved. The labour force willingly worked long hours, day and night, to get the work done as quickly as possible.
  The part played by ships taken up from trade in the actual operation needs no further elaboration, but I should like to draw attention to one important aspect that was an essential element in preparing ships for service in the South Atlantic. I refer to the briefing and training that masters and crew underwent at the outset. Many masters were already members of the Royal Naval Reserve or had attended the courses regularly run by the Royal Navy on Merchant Navy defence, with especial reference to passive defence measures for the protection of a ship and her crew.
  Senior naval officers, officers of the Royal Fleet Auxiliary and Royal Naval supply and transport service
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  personnel were embarked on the larger ships. Tremendous enthusiasm to learn was shown by those masters and crews who were new to this role. The fact that ships sailed from the United Kingdom, rendezvoused with a ship of the Royal Fleet Auxiliary and carried out refuelling at sea for the first time, sailing on southwards, learning to operate fully darkened and without navigation lights once clear of the main shipping routes, occasionally putting on a zigzag and operating with minimum use of radar—and all of this within 10 days—reflects immense credit on the professionalism of the Merchant Navy and the tremendous team effort by the Merchant Navy, the Royal Navy and the Royal Fleet Auxiliary.
  The House can indeed be proud of the Merchant Navy. Nor can we afford to ignore the extent to which we, as island people, are dependent on sea-borne trade for our livelihood. It is all too easy to forget that the food and raw materials on which we must depend—and will continue to do so—are brought in by sea as they have been over the centuries. Ninety-six per cent. of our imports and exports are conveyed by ships, half of these in British ships. Our Merchant Navy is the fifth largest in the world, and the second largest in NATO.
  The hon. Gentleman expressed his worry about the decline in merchant tonnage. In one way or another, the Merchant Navy was able to meet the varied and difficult requirements that arose during the Falkland Islands operation. The hon. Gentleman mentioned the "Atlantic Conveyor". The details of the replacement are being dealt with now and I cannot add very much to what he will have read in the newspapers. My Department has agreed to contribute £4 million to the deal. He will be able to satisfy himself in due course that the defence interest will justify such an expenditure. The availability of a ship of this nature, guaranteed not only for emergencies but for exercises on a regular basis, will be a valuable defence asset to our reserves. One of the many lessons that will have been learned from this exercise was the way in which we were able to use the "Atlantic Conveyor". I have spoken recently with United States naval personnel who were extremely interested in that part of what happened. NATO has plans for such exercises—perhaps they will be accelerated—on a wider basis.
  I shall not delve into the role of the unions in the recent crisis. The merchant crews involved all volunteered. It would be not unfair to say that the unions insisted that all the crews should be British, and on extra wages to which the Government agreed immediately. The numbers involved were somewhat larger than some of the foreign crews who were represented before. There is no secrecy or politics in the fact that many British shipowners are finding it more profitable and economic to hire foreign crews. The hon. Gentleman, in representing Southampton, Itchen, knows the economics of the matter, which are not always to the benefit of the British seamen. That is a matter of opinion and I do not wish to get into a political argument with him about it.
  One of the Royal Navy's responsibilities is to safeguard British flag carriers in peace time. Although the hon. Gentleman did not mention it in his speech, that feature of the Navy's responsibilities is related to the subject that he raised. When we saw a threat to our merchant shipping in the Straits of Hormuz, after the war broke out between Iran and Iraq, we immediately established a Royal Naval patrol in the area. Currently, two warships—one of which, incidentally, thanks to the generosity of the New Zealand

  1519
  Government, is Her Majesty's New Zealand Ship "Canterbury"—are at notice to come to the assistance, if needed, of merchant shipping crossing those troubled waters.
  By the same token, we plan to resume the practice of out-of-area deployments by a task group. This will enable the Royal Navy to visit ports in friendly countries and, where possible, to exercise with other navies, thereby consolidating our ties with nations outside the NATO area. But these deployments can also be seen as an indication of the Royal Navy's preparedness to safeguard the interests of British merchant ships operating in other parts of the world.
  A great deal of work has been carried out on planning for the protection of merchant shipping in wartime. These plans, although largely prepared in conjunction with our NATO allies, extend worldwide and are regularly exercised.
  The Supreme Allied Commander Atlantic is charged specifically with maintaining control of vital sea areas of the Allied Command Atlantic and with protecting the seaborne traffic of the Alliance through these areas. A major objective is the safe and timely arrival of reinforcement and resupply shipping from North America as well as of economic shipping bringing vital supplies of food and raw materials. It is the Soviet submarine that will be the most significant threat to this shipping, although the air and surface threat cannot be discounted.
  It is for this reason that our own maritime forces are configured very largely for anti-submarine operations. It is the role of the naval control of shipping organisation to co-ordinate shipping movements so that the necessary protection can be afforded. Last year's major maritime exercises Ocean Safari and Ocean Venture were designed essentially to test the ability to keep open the transatlantic sea link, and a number of useful lessons were learnt as a result. The means by which protection would be afforded to merchant shipping in time of crisis were explained in detail to members of the General Council of British Shipping at a meeting with my hon. Friend the Minister of State for the Armed Forces earlier in the year, and I believe that this was a most valuable occasion.
  It gave me a great deal of pleasure to host a dinner given by the Admiralty Board only the night before last to the general council and to representatives of firms involved with the exercise that has so recently been successfully concluded. I was able to say to the shipowners themselves a big "Thank you" on behalf of the country and the
  1520
  Government for the contribution which the Merchant Navy undertook and is still carrying out in supporting the task force.
  I have already referred to the close relationship between my Department and the Department of Trade,. I should mention briefly the number of committees that sit to coordinate this relationship. The principal forum is the shipping defence advisory committee. The joint merchant shipping defence committee, which is chaired by the Department of Trade but on which my Department is represented, contains representatives of the industry. It is designed to improve liaison between Government and industry on planning for the direction and role of merchant shipping in time of tension or war. The Royal Navy-Merchant Navy committee, which reports to the shipping defence advisory committee, meets on a regular basis. There are other committees in the wider NATO context—for example, the planning board for ocean shipping.
  I have gone into some detail in order to illustrate the regular discussions that take place between the Government in general, and my Department in particular, and the shipping industry on matters of mutual concern. A formal presentation was given to members of the General Council of British Shipping at the fleet headquarters at Northwood last week on the part played by merchant shipping in the recent operations, and I understand that this was well received and provided useful food for thought.
  There are many lessons to be learnt from our experience in the South Atlantic. We shall need to share these lessons once they have been fully digested with the industry. It is important to bear in mind that the circumstances of the Falklands operations—the long distances, the absence of nearby port facilities and the appalling climatic conditions—were very different from those which could be expected to apply in the event of a European war.
  The Falklands operation has highlighted the interdependence between the Royal and Merchant Navies. This debate has provided a useful occasion briefly to demonstrate the part that the Merchant Navy plays in defence thinking and to bring out the close and continuing liaison that exists between the Ministry of Defence and the shipping industry.
  I wish, in conclusion, again to express my Department's appreciation of the co-operation of the industry during the Falklands crisis and of the skill, determination and great courage shown by the masters and crews of the vessels who sailed in support of the task force. It was a magnificent achievement. We are truly grateful.

  Hearing-impaired Persons (Telephones)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]
  2.30 pm
  Mr. John Golding: This afternoon I appeal to the Government on behalf of literally millions of people who are hard of hearing and so phone deaf, and the increasing number who will become so in the future. As part of their liberalisation programme, which I deplore, the Government are in the process of setting mandatory standards for telecommunications apparatus to prevent hazards for British Telecom operators and interference to the system. To those new standards should be added a mandatory requirement that any telephone fitted to the BT system should be capable of being used with hearing aids.
  I do not ask that all telephones be adapted immediately, nor do I expect that a mandatory standard can come into force immediately. I ask, however, that a mandatory standard for the future be adopted now. Exhortation is not sufficient. A voluntary standard will not do the trick. It could not survive in the present competitive jungle.
  This cause has been presented diligently and persistently by Mr. John Hart, a former Post Office Engineering Union branch officer. He has had the backing of the establishment committee and the national executive council of the POEU and Peter Shaw and Ron Collett, officers of the union. This cause is supported by the Post Office Users National Council, Royal National Institute for the Deaf and the British Association for the Hard of Hearing. Much help has been given by my right hon. Friends the Members for Manchester, Wythenshawe (Mr. Morris) and for Stoke-on-Trent, South (Mr. Ashley).
  As a union, we in the POEU have always been concerned to provide a service to individuals. We do not wish to see groups of physically handicapped people suffer disadvantage in the use of telephones because of commercial attitudes or advancing technology. Isolation is already a curse on the hard of hearing and we should not intensify it.
  The telephone was invented as a by-product of Alexander Graham Bell's attempt to help the hard of hearing, including his wife. In time, it was discovered that telephones could be used by eight out of 10 hearing aid users at a flick of a T switch. That ceased to be true in Britain with the introduction of a type 700 telephone, which was phased in from 1958. Now, due to the advance of telephone technology, the T switch does not work with many telephones. The hard of hearing face telephones that are always dead. Why is that so?
  To put it crudely, the sounds of the caller created magnetism that leaked from the ear piece and could be converted back into the original sounds by a hearing aid pick-up. Through time, the amount of stray magnetism has been reduced, until now there is too little for it to be used in the interests of the hard of hearing. We must rectify that. We must make it possible for hearing aids to be used effectively again with telephones.
  For me, any method will do, but what is now practical and urgently required is the general use of the inductive coupler. This is a cheap and easy way of restoring the magnetism, being simply a few turns of thin wire round a receiver inset, contained in a plastic moulding. It is devastatingly simple, cheap costing perhaps 20p to 30p
  1522
  to produce and less than £1 to buy—and efficient. Indeed, there is no argument about its efficiency, although there is some transmission loss which, however, is negligible. Thanks to the Department of Transport, all motorway telephones are now to be fitted and, despite some inexcusable dragging of feet, all BT kiosks will be fitted by the end of the year.
  The problem is that of the 27 million telephones, only a quarter of a million are fitted with inductive couplers. The POEU has done everything possible to push BT. As a contribution to the International Year of Disabled People, we approached BT with a proposal that members would demonstrate inductive couplers in homes and work places, if necessary in their own time, if BT would waive the £5 installation charge. However, we want the problem to be solved in a more workmanlike, thorough-going manner.
  As I have said, there are still only a quarter of a million telephones out of 27 million fitted with inductive couplers. In all new telephones, and in replacements over 10 to 15 years, it should be compulsory to fit inductive couplers, or any other device which provides a solution for the hard of hearing. Let me emphasise that manufacturers should be required to produce telephones that are usable, not forced if they can find a better method to achieve this, to use inductive couplers.
  Why make it compulsory? The answer is because BT is so lukewarm on this issue. Without compulsion BT, not fully comprehending the problem, would not, in this new competitive era, be prepared to accept the cost, however small, or risk being undercut by competitors, despite the fact that perhaps new traffic could be created.
  It is essential that any regulations apply to all, whether to BT or British or foreign organisations. BT resisted also because it believes that inductive coupling could impede technological progress in the years to come, although who wants technology for progress at the expense of millions being unable to use the telephone? The answer, of course, is to work now for the distant day when digital telephones will be common.
  BT believes that it is sufficient to provide inductive couplers generally in public telephones only, although even here it has been dreadfully negligent in publicising the facility where it already exists. Others, it thinks, should be fitted only on demand, at a price. That is just not good enough. As evidence given to a United States Congressional Committee has clearly shown, that does not meet the needs of the hard of hearing at work, at college, in hotels, restaurants, hospitals, or in the homes of friends and relatives that they may be visiting. It can stop them getting work or accepting transfers. It totally restricts their mobility. It impinges on their dignity.
  The hard of hearing want to feel confident that they can use any telephone and they do not wish to be dependent on individual adaptors which they have to remember to carry around. There are sufficient penalties to being handicapped without adding to them. Nor can we be content with passing the buck to the hearing aid manufacturers. There is a solution. Let us adopt it now.
  It is for the Government to come to the aid of the hard of hearing and introduce a mandatory requirement that any telephone fitted to the BT network must be capable of being used with hearing aids now and, ideally, at no additional cost to the hard of hearing. The Royal National

  1523
  Institute for the Deaf feels, like me, that there should be no extra charge for aids for the deaf—certainly that the present rental of 80p a quarter is totally excessive.
  Of course, it is not only the inductive coupler that is important; there are also other aids. Amplified handsets are equally as important and should be readily available, particularly in conjunction with the coupler. Additionally, the RNID is concerned to provide a service to those who cannot use a hearing aid—a bureau-based telephone service for the deaf. A successful experimental trial took place in 1980. In essence, this means providing a contact point for the deaf to ring to get assistance to converse on the telephone through a visual means. British Telecom has agreed to give practical support by providing the bureau with equipment and with the maintenance support for one year free of charge. Additionally, the RNID has asked for help, £35,000 plus VAT, from the Department of Industry towards a further experiment. The question for the Minister this afternoon is: can it be given, please?
  2.41 pm
  Mr. Laurie Pavitt: Like the rest of the House, I am grateful to my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) because he has brought to the subject his experience in two areas. First, he has a profound knowledge of the telecommunications industry. Secondly, he is one of the few hon. Members to understand the great difference between complete deafness and a hearing impairment. As a Member of Parliament he has sought to help both categories.
  I am probably the only hon. Member to listen all the time in the House with an inductive coupling. It took seven years for the House to accept that, but now every Bench is looped. I achieved that only because the late Sir Winston Churchill, sitting below the Gangway, had his seat wired. That provided a precedent and I was therefore able to persuade the House on the matter.
  My hon. Friend the Member for Newcastle-under-Lyme has raised several extremely practical points. I shall be very disappointed if neither the Minister nor the directorate of BT do not take them to heart, particularly when it comes to an additional telephone charge. I still find it a little unpleasant, to say the least, that transistorised telephones are subject to an increased quarterly rental. The House will know that there is one transistorised telephone behind the Chair and one in the Members' Lobby. There are 15 transistorised telephones here. If a person has a transistorised telephone in his home he has to pay not only an extra installation charge but an extra rental fee. Therefore, among the disabled, the deaf are the only people not to have parity with the rest of the community.
  My hon. Friend is right about the way in which British Telecom, and previously the Post Office, dragged their feet. For several years, I campaigned for inductive couplings to be placed in airports, at mainline terminal stations and at Crown post offices. I suspect that it is due to the pressure applied by my hon. Friend that that work has recently been carried out. The deaf, and those disabled by a hearing impairment, are the least visible of the disabled. They are lonely. A person with impaired hearing wants to stay within the community. The big problem, particularly with the elderly, is to persuade people to come
  1524
  out of their shells and to keep in contact. One way of keeping in contact, particularly for grandparents, is by using the telephone.
  If British Telecom will accede to the request made by my hon. Friend, it will open up a whole world for the deaf. It is not just a way of dealing with those people who have a hearing impediment, but it will help the aged and lonely. Over a period the National Health Service will save millions of pounds on the care of the elderly and on social services.
  I am delighted that most local authorities, through social services, are prepared to allow elderly people living alone to have a telephone at the ratepayers' expense. With the cuts in social service expenditure, it becomes extremely difficult to provide them. It is important that telephones provided for the elderly should have the inductive coupling, because they will often suffer from a hearing impediment. That will enable them to use a telephone that a compassionate society still seeks to provide.
  2.45 pm
  The Under-Secretary of State for Industry (Mr. John Butcher): I congratulate the hon. Member for Newcastle-under-Lyme (Mr. Golding) on having the last word in this parliamentary Session. We were exchanging views at 8 o'clock this morning and I dare say that in the coming Session we shall exchange views on the British Telecommunications Bill. I was not aware, I confess, that the hon. Member for Brent, South (Mr. Pavitt) was instrumental in achieving the wiring of this place so that those with hearing impediments could take part properly in our proceedings.
  My hon. Friend the Minister of State, Department of Industry, has charged me with the responsibility of ensuring that Information Technology Year 1982 makes an impact on the disabled and those who are disadvantaged. I am delighted to have been given that task. I wish to see that IT82 shows the human face of information technology, which will allow people to free themselves from certain difficulties by the use of the facilities that information technology makes available. I am grateful to the hon. Member for Newcastle-under-Lyme for raising this important subject. Clearly it is desirable that the deaf should have as much access to the advantages of modern telecommunications as anyone else, so far as it is technically possible. It is important in reducing their isolation. Although the hon. Member for Newcastle-under-Lyme has sounded a warning note about the disadvantages of some recent technical developments, I believe that on balance the information technology revolution will make available more possibilities rather than fewer.
  The main point raised is the suggestion that telephones connected to British Telecom's network should be required to incorporate a device, known as an inductive coupler, which will allow incoming calls to be picked up by a suitably equipped hearing aid.
  Mr. Golding: My request is that the telephones should be such that they can be used by those with a hearing aid. I said that if manufacturers could find a way other than the inductive coupler that was sufficient, I should want only a mandatory requirement that they be compatible.
  Mr. Butcher: Before answering that directly, I might point out that this is directed at the concern of the hon.

  1525
  Member for Newcastle-under-Lyme that it is not sufficient for public telephones only to include an inductive coupler, but that the deaf want to be able to use the telephone, as he said, at work, in colleges, hotels, restaurants and in the homes of relatives and friends.
  That said—I may have to return to him for clarification on his earlier point—I believe that the hon. Member will nevertheless appreciate the prime importance of suitable public telephones and the availability of special instruments for use by the hard of hearing in their own homes or where they usually work.
  The hon. Member for Newcastle-under-Lyme will agree that the record of British Telecom, especially during the past year, is a good one. From April 1981 to March this year 67 per cent. of the 77,000 public kiosks were equipped with inductive couplers. Work on the rest—mainly the less used rural kiosks—is progressing. The new standard call office, which will begin to be provided next year, will include inductive couplers, and telephones on motorways and AA and RAC phones have been so equipped.
  I am glad that the hon. Member is not asking for all existing telephones to be adapted or that the mandatory requirement that he advocates should take effect at once. It would be unacceptable, as well as impracticable, to compel British Telecom to adapt the many millions of installed telephones that lack the facility. The cost of visits to nearly every subscriber in the land would be prohibitive and it would also not be right to insist immediately that all new telephones should be built with inductive couplers. If such a change is contemplated, manufacturers must have due notice so that they can redesign, where necessary, and modify their production methods.
  A far more reasonable idea, and the one that I believe the hon. Gentleman is putting forward, is that inductive couplers should be made mandatory from a future date. I have considerable sympathy with that view, at least in relation to new telephone models. I am less sure that models that were designed and approved for connection under earlier rules that said nothing about inductive couplers should subsequently be compelled to incorporate those devices. The designs may not lend themselves to such a change and a manufacturer who has had the initiative to take early advantage of the opportunities of liberalisation would abruptly find himself at a serious disadvantage to one whose response had been slower.
  Mr. Pavitt: Telephones have been made by GEC Associated Automation in my constituency for decades. The hon. Gentleman is rightly outlining some possible difficulties, but I can assure him that there will be no problem on new contracts provided that the specification is as he requires it.
  Mr. Butcher: I do not think that we disagree on the point and I thank the hon. Member for that clarification. If a change is to be made it should follow a sufficient period of notice and apply only to models approved after the new requirement became mandatory.
  The hon. Member for Newcastle-under-Lyme has eloquently made the case for the measure that he proposes to help the hard of hearing. There is, of course, a cost to what he proposes, which would be passed on to those who buy or rent telephones made to the new standard. Therefore, before the Government can decide finally on the matter that the hon. Gentleman has raised, we must balance the arguments on both sides.
  1526
  A standard for simple extension telephones is close to completion by the British Standards Institution. An important stage in the preparation of the standard, as with all standards, is the consideration of comments by the public on the standard in draft form.
  A number of comments along the line of the hon. Member's suggestion have been made by people and organisations representing the interests of the hard of hearing. These comments have been fully considered by the technical committee responsible for the simple extension telephone standard. The committee has decided that, while the first edition of the standard should contain no mandatory requirement for inductive couplers, the case for including such a requirement in a later edition should be thoroughly examined as soon as possible.
  The committee has been made aware that the Government find the case made on behalf of the hard of hearing a strong one, and I am asking the committee to meet representatives of the hard of hearing so that the question of inductive couplers can be fully examined. In the light of that discussion, the Government will decide whether to use their powers under the British Telecommunications Act to make the fitting of inductive couplers a mandatory requirement for the approval of extension telephones for connection to British Telecom's network.
  Apart from extension phones, there is the question of prime instruments, and in particular the question of the telephones that British Telecom supplies as prime instruments. Clearly, in the foreseeable future those will make up a substantial proportion of all telephones and, as the hon. Gentleman said, most telephones now supplied require, and are capable of, adaptation for use with a hearing aid.
  British Telecom's new standard telephones are of course a matter primarily for BT. It does not believe that it is right for all subscribers to bear the cost of a facility which benefits only a minority. It also appreciates that inductive couplers will not work with the very latest electronic telephones, but it is important to remember that those represent only a relatively small segment of the market, perhaps 10 to 13 per cent. in the next year.
  British Telecom is considering new ways of adapting these phones to help the hard of hearing. I take this opportunity to urge them to give considerable priority to this important work and to do so in conjuction with the manufacturers. Clearly, the proportion of such phones will rise in the next few years and there is therefore some urgency.
  British Telecom's recent tariff proposals contain the welcome proposal that the 80p quarter charge for an inductive coupler should be abolished from November. The installation fee will be retained, but at its present level of £5.
  This brings me to the imaginative initiative that the hon. Gentleman mentioned by the Post Office Engineering Union during the International Year of Disabled People. I understand that from April 1981 to March this year POEU engineers fitted in their own time and free of charge some 20,000 to 30,000 inductive couplers. That is a splendid achievement and I am grateful to the hon. Gentleman for giving me the opportunity of bringing it to the notice of the House.
  I began by mentioning ways in which new technology may help the hard of hearing. The hon. Gentleman may be interested to know that the Department has received

  1527
  several proposals which concern telecommunications for the deaf, and these are receiving particular consideration. However, they vary in size and scope and also in terms of the technology involved. It is necessary to evaluate relative merits of the proposals and to assess their viability, including the proposal that the hon. Gentleman made in his speech. At this time is not appropriate that conclusions should be forced, but I hope to make an announcment of what the Department can do to help in the near future. I might add that one important and comprehensive project—called VISICOM—arose from an initiative by British Telecom.
  1528
  I undertake to keep with the hon. Members for Brent, South and Newcastle-under-Lyme apprised of developments and, as I said earlier, I congratulate the hon. Member for Newcastle-under-Lyme on having the last word in the current Session of Parliament.
  I do not know whether it is a convention, Mr. Deputy Speaker, but may I wish you a most pleasant recess?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): I am grateful for the hon. Gentleman's kind wishes and reciprocate them to all Membes of the House.
  Question put and agreed to.
  Adjourned accordingly at three minutes to Three o' clock till Monday 18 October, pursuant to the Resolution of the House of yesterday.

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  Disposal of Assets (Tax Liability)
  Company Taxation
  Company Taxation
  Earnings-Savings Ratio
  Earnings-Savings Ratio
  Contingency Reserve
  Contingency Reserve
PRIME MINISTER
  Falkland Islands
  Falkland Islands
  Her Majesty the Queen (Security)
  Her Majesty the Queen (Security)
  Members' Correspondence
  Members' Correspondence
  China (Visit)
  China (Visit)
  Central Policy Review Staff
  Central Policy Review Staff
  Fishery Offences
  Fishery Offences
  National Federation of Building Trades Employers (Correspondence)
  National Federation of Building Trades Employers (Correspondence)
  Arms Sales (Israel)
  Arms Sales (Israel)
  Falklands Campaign (Victory Parade)
  Falklands Campaign (Victory Parade)
  Argentine Aircraft (Exocet Missiles)
  Argentine Aircraft (Exocet Missiles)
  Pay Review Bodies
  Pay Review Bodies
SOCIAL SERVICES
  Family Practitioner Committees
  Family Practitioner Committees
  NHS (Consultants)
  NHS (Consultants)
  Nuclear War (Health Care)
  Nuclear War (Health Care)
  Anti-smoking Campaigns
  Anti-smoking Campaigns
  NHS (Pay)
  NHS (Pay)
  Registrars of Births, Deaths and Marriages
  Registrars of Births, Deaths and Marriages
  NHS (Catering and Cleaning Services)
  NHS (Catering and Cleaning Services)
  Benefits (Payment)
  Benefits (Payment)
  Health Care Staffs
  Health Care Staffs
  Children (Welfare Milk)
  Children (Welfare Milk)
  Benefits
  Benefits
  Acheson Report
  Acheson Report
  Personal Social Services
  Personal Social Services
  Housing Benefit
  Housing Benefit
  Mobility Allowance
  Mobility Allowance
  Revenue Allocation
  Revenue Allocation
  Professions Supplementary to Medicine
  Professions Supplementary to Medicine
  Attendance Allowance
  Attendance Allowance
  Breast Milk Substitutes
  Breast Milk Substitutes
  Supplementary Benefit
  Supplementary Benefit
  Death Grant
  Death Grant
  National Health Service
  National Health Service
  International Year of Disabled People
  International Year of Disabled People
  Drug Costs
  Drug Costs
  Fraud Investigations
  Fraud Investigations
  Zyldric Daonil and Septrin
  Zyldric Daonil and Septrin
  Unemployment Benefit
  Unemployment Benefit
  Ministerial Visit (Israel)
  Ministerial Visit (Israel)
  Sickness Claim Forms
  Sickness Claim Forms
  Birmingham
  Birmingham
  Repatriation
  Repatriation
  Deaf-blind Persons
  Deaf-blind Persons
  National Health Service (Management)
  National Health Service (Management)
  Mentally Handicapped Persons (Scotland)
  Mentally Handicapped Persons (Scotland)
  Care Proceedings
  Care Proceedings
  Mexborough Montagu Hospital
  Mexborough Montagu Hospital
  Maternity Allowance
  Maternity Allowance
  Ambulance Costs
  Ambulance Costs
  Asbestosis and Mesothelioma
  Asbestosis and Mesothelioma
  Students
  Students
  Prescription Charges
  Prescription Charges
  Invalid Care Allowance
  Invalid Care Allowance
  Management Information and Accounting System
  Management Information and Accounting System
  Cigarette Advertising
  Cigarette Advertising
  Nurses
  Nurses
  Fluoridation
  Fluoridation
  New Cross Dental School
  New Cross Dental School
  Geriatric Patients, Mentally Ill and Mentally Handicapped Persons
  Geriatric Patients, Mentally Ill and Mentally Handicapped Persons
  National Health Service (Expenditure)
  National Health Service (Expenditure)
  Pensions
  Pensions
  Pensioners (Earnings Rule)
  Pensioners (Earnings Rule)
  Pension Age
  Pension Age
  NHS (Theft, Fraud and Arson)
  NHS (Theft, Fraud and Arson)
ENERGY
  Fluorescent Tubes
  Fluorescent Tubes
  Pensioners (Fuel Standing Charges)
  Pensioners (Fuel Standing Charges)
  Atomic Energy (Miscellaneous Provisions) Act 1981
  Atomic Energy (Miscellaneous Provisions) Act 1981
  British National Oil Corporation
  British National Oil Corporation
  Coal
  Coal
  Uranium
  Uranium
  Bulk Supply Tariff
  Bulk Supply Tariff
  Coal Mining (Subsidence)
  Coal Mining (Subsidence)
  Fuel Standing Charges
  Fuel Standing Charges
  Combined Heat and Power
  Combined Heat and Power
  Pressurised Water Reactors
  Pressurised Water Reactors

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

Namibia: Independence Negotiations
Lord Hatch of Lusby: 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 progress they and the other members of the "Contact Group" have made towards securing agreement for the independence of Namibia.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): My Lords, in a letter to the United Nations Secretary-General on 12th July, the Five recorded the agreement of all parties to the constitutional principles proposed for the envisaged Constituent Assembly. In the course of informal consultations with the Front-Line States and SWAPO in New York, the Five have made encouraging progress towards the resolution of other outstanding issues relating to implementation of Security Council Resolution 435.
Lord Hatch of Lusby: My Lords, in thanking the noble Lord for that Answer, may I press him a little further on what has happened since the publication of the letter? First, may I ask him whether he is aware that every word spoken in answer to my Question this morning will be reported back to Africa, where the final decision is bound to be made? May I also ask him whether he has read this week's South African press, which has reported that the South African Government are now linking continued negotiations with the Contact Group with two points—the first being the withdrawal of Cuban troops from Angola, and the second being the inclusion of at least one member of Unita, the rebel group in Angola, in the Angolan Government? That has been reported this week in the South African press.
Finally, may I ask the noble Lord, since it has been reported in this morning's press that two days ago his office assured the anti-apartheid movement that there were no formal preconditions relating to the withdrawal of Cuban troops from Angola—
Several noble Lords: Speech!
Lord Hatch of Lusby: Can he explain the meaning of the word "formal", which could cause some concern?
Lord Belstead: My Lords, the first and the last of the noble Lord's supplementary questions deal with the matter of withdrawal of Cuban troops from Angola. As a member of the Five, Britain agrees that while
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withdrawal of Cuban troops cannot be a formal precondition for a Namibia settlement, it is a desirable and interrelated objective. A Namibia solution provides an outstanding opportunity for a broader regional settlement. So far as the noble Lord's question about South African views of the Angolan Cabinet is concerned, I have no comments to make on that.
The Earl of Bessborough: My Lords, can my noble friend say whether any progress has been made in agreeing on the electoral system to be employed?
Lord Belstead: My Lords, in their letter to the United Nations Secretary-General on 12th July, which I mentioned in my original reply to the noble Lord, Lord Hatch, the Five stated their belief that a decision on the method to be employed to elect the Constituent Assembly should be made in accordance with the provisions of Security Council Resolution 435, without causing delay in the implementation of the resolution.
Baroness Llewelyn-Davies of Hastoe: My Lords, is the noble Lord aware that we very much welcome his statement about no preconditions over the Cuban troops in Angola, and that we all very much hope for peace in the whole region? May I ask whether he can comment on many statements in the press that Western diplomats in the United Nations are worried by what they call noises from the military in South Africa and the president's latest accusations against SWAPO?
Lord Belstead: My Lords, I am bound to say that we are concerned at any increase in violence in the Namibia context, by either side—and by that I mean both South Africa and SWAPO. We have always made it clear to both sides that increased violence cannot help the prospects of success for the Five's continuing efforts.
Lord Duncan-Sandys: My Lords, in his first reply the noble Lord said that the withdrawal of Cuban troops from Angola was desirable; I felt that remark to be rather feeble, if I may say so. I would ask the noble Lord to assure us that the Government recognise that the withdrawal of Cuban troops from Angola is an essential element in the establishment of stable conditions in southern Africa.
Lord Belstead: My Lords, I think that the words I used were that a Namibia solution provides an outstanding opportunity for a broader regional settlement. I like to think that those words are robust; they are certainly meant so to be. I consider that this is a desirable and interrelated objective, even though it cannot be a formal precondition for Namibia.
Lord Brockway: My Lords, while I welcome the fact that the impossible dual electoral proposal has been withdrawn, may I ask the noble Lord whether he can indicate to us what is now the proposal for the election? Secondly, may I ask him whether he is aware that the Angolan Government have indicated that if the South African troops were withdrawn from Namibia a solution in the withdrawal of the Cuban armies would be more acceptable?
Lord Belstead: My Lords, so far as the noble Lord's second supplementary question is concerned, I think we must see how we go along those lines, but both the eventualities which the noble Lord, Lord Brockway, mentions are, I think, wholly desirable. So far as the details are concerned—that is, the nuts and bolts of the electoral process being proposed by the Five—I can today only reiterate that the Five are doing their best to narrow the differences between the parties on the outstanding issues, and the two main outstanding issues are the electoral process and the composition and deployment of the United Nations Transitional Assistance Group.
Lord Hatch of Lusby: My Lords, may I ask the noble Lord to go one stage further so far as the Cuban troops are concerned? Is this not a matter which is just as much within the sovereignty of the Angolan Government as the presence of American troops in Europe is within the sovereignty of European countries? Further, would he tell us whether it is true that representatives of the Contact Group are now in Windhoek; and, if so, what are they doing there?
Lord Belstead: My Lords, so far as the first question is concerned, the presence of Cuban troops in Angola is a matter of concern to all who are concerned with the Namibia process; and I repeat that the process of trying to sort out the Namibia problem provides an outstanding opportunity for a broader regional settlement in this matter. So far as the presence of a mission of the Five in Windhoek is concerned, that mission is there in order to bring the internal parties up to date on developments in New York, and I think that is a highly desirable thing for the Five to do.

The START Talks in Geneva
11.15 a.m.
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made at the Geneva START talks between the USA and the USSR on strategic arms reduction.
Lord Belstead: My Lords, the START talks, and the briefings which the Americans give to us and their other allies about them, are confidential. We have noted and welcomed the serious intentions with which the United States has entered these negotiations. We must hope that the Russians reciprocate.
Lord Brockway: My Lords, may I ask the Minister whether we can have an assurance that the Western Governments, supplementing the efforts of the unaligned Governments, will exert the fullest pressure, both on the American Government and on the Soviet Union, to make the necessary compromises in these discussions to enable a satisfactory solution to be reached?
Lord Belstead: My Lords, the United States, of course, has proposed to concentrate in the START talks on the most destabilising elements—the ballistic missiles, including, particularly, land-based ballistic missiles—but the Americans have also made clear their
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willingness to include in the negotiations other classes of system. Now we await the response of the Russians.
Lord Peart: My Lords, is the Minister aware that this matter was raised during the recent defence debate? I also noticed that at an international gathering the Prime Minister stressed it, as well.
Lord Belstead: Yes, my Lords, I also had noted the reference to this in the debate.
Lord Kennet: My Lords, do the Government agree that the START talks are very closely related to the intermediate-range nuclear force reduction talks, that progress in either is very unlikely without progress in the other, and that both concern this country crucially?
Lord Belstead: My Lords, I entirely agree with the noble Lord, Lord Kennet. The two sets of negotiations are proceeding in parallel, and, of course, they are proceeding together in Geneva. There is close co-ordination between the delegations.
Lord Molloy: My Lords, is the noble Lord aware that all sane people would wish to see, urgently, a massive reduction in all sorts of arms, strategic and otherwise, but that the thought in the mind of everyone is that when Governments agree, at whatever level, on talks about reductions, ordinary people ask themselves, "How do we know that they will honour what they have agreed at conferences?" Is it not now about time that the way in which agreements on the reduction of arms reached at summits or elsewhere are going to be made a reality, should be the main subject of discussion in all these debates on the reduction of arms? It is: Will the agreements be honoured, and how can they be proved to be honoured?
Lord Belstead: My Lords, the noble Lord's question gives me the opportunity to record that in the three sets of talks which are taking place at the present time—the START talks, the intermediate-range nuclear force reduction talks and also what are known as the MBFR talks (the mutual and balanced force reduction talks) in Vienna—the West has made proposals for reductions in force levels, and we await a response from the Russians. But those proposals rely, as the noble Lord so rightly says, upon the agreement as to what everybody has—in other words, data—and also verification, to see that both sides are playing the game in undertaking their reductions; and the talks will not be successful unless the questions of data and verification can be agreed.
Lord Brockway: But, my Lords, is it not the case, as indeed was indicated from the Front Bench, that the Soviet Union has now agreed to on-the-spot verification in relation to chemical weapons? Was that not welcomed from the Front Bench, and does that not give us hope that a system of verification may be completed?
Lord Belstead: My Lords, as the United Kingdom disposed of all its chemical weapons 10 years ago, naturally I agree with the noble Lord that we welcome this move by the Russians.

Educational Provision for 16- to 19-Year-Olds
11.20 a.m.
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 how they have responded to the increased demand for full-time education from 16–19 year-olds.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, the Government are anxious to encourage this welcome development as much as possible. Our current expenditure plans contain provision for a large expansion of demand, including an extra £100 million for the current financial year, compared with our original plans. In May, the Government announced the launching of a new prevocational qualification for 17-year-olds.
Baroness Gardner of Parkes: I thank my noble friend for his reply. In view of the Chancellor's Statement earlier this week on job sharing which is to come into force in January 1983, may I ask him whether it is possible that this has an effect on the numbers of 16 to 19-year-olds seeking full-time education, and could the Minister assure me that the Government will see that these groups have no obstacles placed in their way of continuing in part-time education? Could he also assure me that he is aware that there is a changing world in employment and that many skills are now needed to be learned—skills such as communications—which are not job-specific but would relate to many jobs and would increase the employment prospects of that age group?
Lord Elton: My Lords, the job-splitting scheme, although it is experimental will, we hope, if people like it, provide real jobs which could be opened up for more people, including the 16- to 19-year-olds. Full details of this scheme will be announced in the autumn and the scheme itself will run from 1st January 1983 till 31st March 1984. We will not place obstacles in the way of young people wishing to remain in full-time or part-time education and the numbers doing so continue to rise to a remarkable level already.
Lord Avebury: My Lords, would the noble Lord not agree that one of the few qualifications for which there is still an excess of demand over supply is computer programming and, in this Year of Information Technology, I wonder if the Government will consider financing education and training schemes within industry which would enable young people of this age group to get the two years' experience which is required by most employers before they will take on somebody in a paid job, and thereby enable more of this age group to get their feet on the first rung of that employment ladder?
Lord Elton: My Lords, certainly the area to which the noble Lord has addressed himself is a very important one. Perhaps it should be considered in the
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context of what we are providing in the way of the Manpower Services Commission's proposals for the new training initiative. There will be, in that, full place for the sort of thing that the noble Lord is talking about and it is in fact a determined effort to produce a better-educated and better-trained workforce in all respects. I should tell your Lordships that by 1984–85 investment by the MSC will be around £1½ billion per year.
Lord Davies of Leek: My Lords, is the noble Lord aware that, without being churlish, nevertheless we welcome the extension and better attitude that is now taken to further education? Secondly, is he further aware that the young of today are the seed corn for the future of Britain and the future of this nation; and that for the following up of education it is essential—and I know this from people who have come to me only in the last year or so—for the 16- to 19-year-olds to have some supplementary monetary support, because many of the families cannot support the 16- to 19-year-olds in further education unless there are generous, understanding grants made to them?
Lord Elton: My Lords, I am not quite sure what the noble Lord implies by, I think he said, "monitoring support", but we are very well aware (and I particularly am aware) of the great importance of this age group. It may help your Lordships to visualise what is going on if I say that our plans assumed an increase in pupils above school-leaving age in schools from 310,000 in 1980–81, to 340,000 in 1981–82 and the 16- to 19-year-olds on courses of full-time, non-advanced further education will be, in 1982–83, 266,000. There are a great many people doing this and we want to encourage it.
Lord Renton: My Lords, may I remind my noble friend that, in his previous appointment last winter, he was so good as to tell us what the Government proposed to do about the further education of those mentally-handicapped young people who are capable of it? Will he bear in mind this in further developments in this matter?
Lord Elton: My Lords, certainly, it will be borne in mind.
Lord Hoosen: My Lords, will the noble Lord not agree that, in the present circumstances of this country, there is a great deal to be said for paying these young people unemployment benefit but allowing them to continue in full-time education? It seems to me that we should make a virtue of necessity in the present state of this country.
Lord Elton: My Lords, more and more young people recognise the importance of improving their qualifications and are staying on. Therefore, that seems to put the question of need for greater support than at present perhaps a little in question. But we shall keep the matter of a staying-on allowance of some sort under review. Our first priority must be the NTI (new training initiative) on which there will be major expenditure to which I have already referred.
Lord Somers: My Lords, would the noble Lord agree that, when you reach the age of 16, you pass the stage where general education is necessary and that from then on it is much more specialist education to suit the career which you are going to follow; and that, therefore, being the case, it will be a pity to have completely unselected education from 16 to 19 years of age at the expense of those who perhaps need it?
Lord Elton: My Lords, a feature of present developments is the way that education is being extended right across the spectrum from the academic to the totally non-academic. The noble Lord is referring to the latter; and that is the area in which there is the greatest expansion. However, many who have undertaken university degree courses in their youth will recognise that there is room for general education as well as specialist education at about the age of 16.
Lord Wynne-Jones: My Lords, how does the noble Lord reconcile his statements about the expansion of education in the further and higher education field with the cutting back of the numbers to be admitted to universities and polytechnics? Would he not agree that it is much more sensible to use the institutions which now exist for the purpose of giving education to that age rather than to create new methods of very doubtful significance?
Lord Elton: My Lords, we are using the existing plant. A feature of what we are doing is to use it more productively, and what we are doing, I think, is not doubtful but practical.

Nuclear Weapons and Public Opinion
11.27 a.m.
Lord Jenkins of Putney: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware that according to a poll conducted by the Opinion Research Centre 63 per cent. of people disapproved of their decision to buy Trident II, and 53 per cent. believe that Polaris should be scrapped; and whether they will act in accordance with this expression of public opinion.
The Earl of Avon: My Lords, the Government are aware of the results of this poll. The way in which the question is put is, of course, crucial to the result of any opinion poll. The Government believe that, when presented objectively with all the relevant facts, the majority of the population of the United Kingdom would be in favour of retaining the United Kingdom's independent strategic nuclear deterrent and of the choice of Trident as the most cost-effective way of maintaining this capability.
Lord Jenkins of Putney: My Lords, is the noble Earl aware that the Government believe what they want to believe and that the reality of the situation is that there has been a fundamental shift in opinion, not only in this country but also in Europe, in favour of the view
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that we must get rid of the nuclear weapon or it will get rid of us?
The Earl of Avon: My Lords, of course we believe what we wish to believe, just as the noble Lord does. We believe that unilateral nuclear disarmament would be a step away from and not towards continuing peace and security. The best prospect of reducing nuclear weapons is by concrete multilateral negotiations to limit the forces on both sides.
Viscount Massereene and Ferrard: My Lords, would my noble friend agree that such polls conducted are quite worthless because the general public are not privy to the information which is necessary to come to a balanced judgment on such a subject?
The Earl of Avon: My Lords, one of the difficulties is, as I have said, the presentation of the question.
Lord Duncan-Sandys: My Lords, does the noble Lord agree that opinion polls are not the way to decide defence policy?
The Earl of Avon: I do indeed, my Lords.
Lord Annan: My Lords, will the noble Earl share my surprise that the noble Lord, Lord Jenkins of Putney, must apparently be in favour of the reintroduction of capital punishment since opinion polls have shown opinion to be in favour of it although Parliament in its wisdom has decreed against it?
The Earl of Avon: My Lords, the noble Lord stresses the difficulty of governing by opinion polls.
Lord Jenkins of Putney: My Lords, is the noble Earl aware that, contrary to the opinion expressed by the noble Lord, Lord Annan, I am not suggesting a referendum on the subject? I am suggesting, however, that the Government should not remain immune from the development and trend of a public opinion in many parts of the world and that a simple reiteration of the Government's dependence upon nuclear weapons is not enough. Is it not the case that it is high time that the Government expressed abhorrence of this weapon, which is very widely shared, and their determination in their own way—multilateral, whatever it may be—to do their utmost to get rid of it?
The Earl of Avon: My Lords, we do indeed share the abhorrence of these weapons. We do not believe that it would do any good if we were to disarm unilaterally. Russia would certainly not follow suit. I believe that the majority of people agree that we must keep our defences strong otherwise we shall put ourselves as well as our NATO partners at serious risk. The only way to achieve disarmament is through a realistic process and negotiated arms control arrangements, as were explained earlier by my noble friend Lord Belstead.
Lord Thorneycroft: My Lords, does the noble Lord agree that the responsible opinion of British people is expressed at general elections and that they have now elected eight Governments in succession, including a

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number of Labour Governments, all firmly committed to a policy of maintaining an independent nuclear deterrent?
The Earl of Avon: My Lords, I am grateful to the noble Lord for bringing out one of the points that I had in my brief.

Consolidated Fund (Appropriation) Bill
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911, and read a first time.
Then, Standing Order No. 43 having been suspended (pursuant to Resolution of 21st July), Bill read a second time: Committee negatived; Bill read a third time, and passed.

Motor Vehicles (Wearing of Seat Belts) Regulations 1982
11.33 a.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin) rose to move, That the draft regulations laid before the House on 17th July be approved.
The noble Lord said: My Lords, it is a year since this House exercised its judgment, and amended the Transport Act 1981, to make provision for the introduction of compulsory seat-belt wearing. As the House will know, although the Government were neutral on this issue, we did undertake to implement Parliament's decision, and that is why these regulations have been brought before us today. This House will, I am sure, be aware that these regulations have already been considered in another place and were approved by a considerable majority. I know that some of your Lordships will still be opposed to the principle of compulsion, but it is important to bear in mind that we are now discussing the regulations which will implement Parliament's decision in favour of compulsion. We are not here today to debate whether or not that decision should have been made.
Whatever our views on compulsion, the regulations I am presenting to you today will ensure that the law is as fair and easy to enforce as possible. This was our underlying aim in drawing up these regulations, and it is why we have proposed so few exemptions. I hope the House will keep the importance of this in mind during today's debate.
Turning to the regulations themselves, I think it would be helpful to the House if I went through them and explained, as briefly as possible, what they mean. The preamble sets out the requirements which have been fulfilled in accordance with the terms of the 1981 Act. My right honourable friend the Secretary of State for Transport laid a statement of proposals for implementing compulsion before this House and another place on 8th December last year. This was sent to a wide range of interested organisations and to the public. During the three months that had to follow before the regulations could be laid we received
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many useful comments on the proposals. I can assure the House that we carefully considered all these views before we drafted the regulations.
Of the regulations themselves, Regulation 1 gives the commencement date; Regulations 2 and 3 are mainly technical; Regulation 4 introduces the requirement to wear seat belts; Regulation 5 specifies the exemptions; Regulation 6 specifies the types of vehicles covered; and Regulation 7 deals with the types of seat belt required.
If I may explain these regulations in more detail, Regulation 1 gives the commencement date as the 23rd Monday after they have been made. I realise this may seem curious but we chose a Monday after consulting the police as to the best day to bring in a requirement affecting most motorists. Clearly we could not specify an actual date as we could not tell how long it would take for the regulations to be approved by both Houses—your Lordships will know only too well how crowded our programme becomes before a recess. This unusually long period of 23 weeks is necessary if we are to prepare properly for the introduction of compulsion. First, we need to allow time for the printing and distribution of the medical exemption forms. Obviously, we could not incur possibly abortive expenditure by doing this work prior to the approval of this House. Secondly, we shall be mounting a publicity campaign in the press advising people about the new law. Leaflets will also be available and these will explain the law, give advice on the comfort and safety of belts, and on how to obtain medical exemption. Thirdly, sufficient time must then be left for people, if necessary, to apply to their doctors if they have a medical problem. As the House knows, we have taken powers in the Transport Bill to enable us to provide examinations for certain people who are on low incomes or disabled, and we plan to do so through the DHSS. Your Lordships will appreciate that it will take time for applications to be made and for doctors to consider them. I can therefore assure the House that we have only allowed enough time for these three provisions to be completed and are not needlessly delaying compulsion.
Turning to Regulations 2 and 3, these are mainly technical provisions, containing the citation and definition of terms used in the regulations. However, as the House will know, the Joint Committee has reported that Regulation 3(2) is an unusual use of powers. The regulation is simply designed to pick up future amendments to other legislation which is referred to in the regulations. This has been done to ensure that these regulations do not become incomplete or otherwise defective when minor changes are made in, primarily, the Construction and Use Regulations, which deal with the compulsory fitting of seat belts. As your Lordships may know, minor amendments are often made to those regulations to take account of technical changes in, for example, ECE regulations. It would be extremely time-consuming if every time such changes were made an affirmative resolution instrument also had to be laid to ensure that the wearing regulations did not become out of date. It is certainly true that major changes could be made: some have suggested that compulsory seat-belt wearing in the back of cars could be introduced in this way. However, I cannot stress too strongly that the Government

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consider that such action would be improper given the sensitive nature of this whole issue and given successive Governments' recognition that specific powers were necessary to introduce compulsion in this field. I am sure, however, your Lordships will see the sense of this regulation.
Looking at Regulation 4, your Lordships will note that this requires a seat belt to be worn when driving or riding in a vehicle. The latter requirement only extends to the specified passenger seat which is normally the front nearside passenger seat or in the middle front seat if the specified passenger seat is not occupied.
It is Regulation 5 which lists the categories of exemption, and it is this question which arouses the most interest. As I said earlier, we have tried to make the law as fair and as enforceable as possible. Our aim has been, therefore, to keep exemptions to a minimum, and we have only included categories of exemption which seemed very compelling. The exemptions in Regulation 5(a), (b) and (d) are those required to be given under the 1981 Act; that is the users of vehicles constructed or adapted for the delivery of goods while on local rounds; drivers carrying out a manoeuvre which includes reversing; and holders of medical exemption certificates. As my right honourable friend indicated in his statement of proposals, he recognised the need to extend the first category of exemption to those collecting as well as delivering goods. I am sure the House will agree that it would be illogical to exempt one and not the other, especially as in some cases, such as Post Office and laundry rounds, the same person may be both collecting and delivering items. At the request of the National Joint Council of Approved Driving Instructor Organisations, we have also extended the exemption for drivers while reversing, to include in Regulation 5(c) a person supervising a learner driver, so that they can ensure that the manoeuvre is being carried out safely.
As far as the medical exemption is concerned, we have not, however, used the permissive powers available to us under the Act, to prescribe the size of the fee doctors may charge. The BMA are recommending to their members that they should carry out an examination of all applicants for exemption for which they should charge £19. But it will be for the individual doctor to decide what work he needs to do before deciding on an application, and therefore what fee, if any, he should charge. A prescribed fee might be too large in some circumstances, and too small in others. Nor can we limit the issue of certificates to a person's own GP. The 1981 Act applies to any medical practitioner, and it would have been ultra vires to restrict someone to their GP.
As proposed in my right honourable friend's statement, Regulation 5(e), (f) and (g) exempts the emergency services in limited circumstances. After consultation with them, we did not consider a general exemption necessary; nor did they ask for one. Of course, as with existing exemptions for the emergency services, under the road traffic law they may have to justify to a court their decision not to wear a belt. The House will note that we have not provided an exemption for the armed services. This is because many of their operational vehicles are not required to have belts fitted and we are not, by and large, proposing
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compulsory wearing of belts where they are not compulsorily fitted. The armed services were, of course, consulted over these regulations, and are content.
As a result of our consultations, we were persuaded that other exemptions were necessary. The representatives of the taxi drivers and private hire car drivers pointed to the increasing number of attacks on their members, which could be increased if they had to wear a seat belt. Unfortunately, this argument is a valid one. It is related to the exemption for the police and other officers in escorting duty. We have therefore proposed, in Regulation 5(h), an exemption for taxi drivers when plying for hire or carrying a passenger, and for private hire car drivers when carrying a passenger. The exemption has been restricted to vehicles displaying the relevant licence plates, so as to aid enforcement.
Moving to Regulation 5(i), we have given very careful consideration to the question of exemption for drivers accompanying learner drivers. We see no justification for a general exemption for instructors and others supervising learner drivers—a view shared by the National Joint Council of Approved Driving Instructors Organisations. Indeed, one of the council's founder members, the British School of Motoring, already requires its 1,500 instructors (and its pupils) to wear their belts. However, we recognise the danger to road users, including the driving test candidate and examiner himself or herself, if the latter has to wear a belt at all times. This danger arises because the examiner may not take any action during a test until the candidate has been given every opportunity to correct a fault or to deal with a problem. This inevitably means the examiner has to act at the last possible moment, and once this has happened, the candidate has failed the test. We have therefore provided a limited exemption for examiners.
I can assure the House that Regulation 5(j) does not provide an escape route from compulsion for those who do not wish to wear belts. It is simply a sensible exemption for those odd occasions when a belt cannot be worn. It is an offence to drive a vehicle with defective belts, but we will be amending the Construction and Use Regulations, so that a person cannot be prosecuted for having a defective belt if it has only become faulty on that journey, or steps have already been taken to get the fault rectified. The second part of the exemption only applies for that short time at the start of a journey on a hill, when some belts do not unreel. However, once the vehicle has moved and the belt is again free to unreel, it must be put on.
Finally, in Regulation 5(k), we have proposed a limited exemption for motor mechanics. On occasions, we appreciate that mechanics may need to carry out adjustments or diagnosis, as front seat passengers. Wearing a seat belt could prevent this, as the work may involve getting under the dashboard as the car is driven along. However, so that the exemption can be enforced, it will only apply when a vehicle is being used with trade plates. Your Lordships will not be surprised to learn that we received a large number of requests for other exemptions, but I would again emphasise that for the law to be fair, and enforceable, then exemptions must be kept to a minimum.
Regulation 6 is an important one, listing the vehicles in which seat belts must be worn. As I mentioned earlier, broadly, these are the vehicles in which belts are already compulsorily fitted: that is cars registered since 1st January 1965, light vans registered since 1st April 1967, and three-wheelers first used on or after 1st September 1970. However, seat belts must also be worn if they are fitted to various classes of vehicles which are outside the requirement to fit belts. These are listed in Regulation 6(b) and include, for example, foreign visitors. Regulation 7 simply describes the type of seat belt which must be worn.
I must apologise to the House for taking up so much time in explaining these regulations. I am sure that your Lordships will appreciate their importance and the interest, particularly in the exemptions, that they arouse. After much soul-searching, I was myself persuaded by the medical evidence to support compulsory seat-belt wearing; but whatever views your Lordships hold on the principle, I hope you will agree that these regulations are a very sensible approach to a difficult subject. I trust that your Lordships will vote in favour of them and I beg to move.
Moved, That the draft regulations laid before the House on 17th July be approved.—(Lord Bellwin.)
11.47 a.m.
Lord Underhill: My Lords, at last we are approaching the final stage of this protracted effort to secure legislation for the compulsory wearing of seat belts. As the noble Lord the Minister has said, Parliament has clearly decided on the principle. Your Lordships' House approved by 132 to 92 votes the new clause introduced by the noble Lord, Lord Nugent, which made this provision. I should make it clear that although there was a free vote I was not neutral, and I was pleased to have the opportunity of supporting the noble Lord, Lord Nugent, in his effort.
When the new clause went to another place it was approved again, again on a free vote, by the substantial majority of 221 votes to 144; so the principle has been determined by both Houses. The debate concentrated on the freedom of choice and action of the individual, and again there was widespread concern about the tragic toll of fatalities and serious injuries on which the combined medical opinion had such a strong influence; and support for the principle came from a wide range of safety and other organisations. So the issue has been settled and the task of your Lordships today is to consider the regulations presented to us so carefully and clearly by the noble Minister, to whom I think we are all very grateful.
I must emphasise again that the regulations were approved by the Commons only last Friday by the very large majority of 181 votes to 59. The regulations follow the pattern laid down in the 1981 Act, and the noble Lord has clearly explained to us all the exemptions under Regulation 5. The exemptions (a), (b), (c) and (d) are the main ones as laid down in the Act. Most of the other additional exemptions were either set out in the details published by the Secretary of State last December or arose from the consultations. I am grateful to learn that so many useful consultations were conducted as a result of the publication of the Secretary of State's proposals.
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The one exception that I queried right at the outset was the inclusion of paragraph (h)(ii), dealing with private hire vehicles. As distinct from the position of taxis, hire cars do not pick up passengers en route and they carry out journeys from point to point, just like other motorists. But I note the arguments which have been put about possible attack, and I assume that this category is included based on information about such occurrences. In any event, I would not wish a minor point of that kind to hold up the passage of these regulations.
Paragraphs (e), (f) and (g) in the exemption list appear to me reasonable, but I trust that the police and fire authorities will give clear instructions as to when their personnel must wear seat belts. It is essential that those authorities should set an example to the rest of the motorists. I am pleased to hear from the Minister this morning his emphasis on the steps that will be taken to publicise both the regulations and the exemptions that are open to individuals.
My major concern is the fee of £19, which is proposed by the BMA in connection with exemptions on medical grounds. In the other place, the Under-Secretary of State, Mrs. Lynda Chalker, said on 22nd July at col. 646 of the Official Report, that she took a sympathetic attitude, and went on:
"Nobody was sadder than I when the British Medical Association said that it would suggest to its doctor members a fee of £19 for a medical examination. The doctors do not need to charge that fee. A doctor may waive the fee, charge a pound or two, or charge nothing."
That position was set out further by the noble Lord, Lord Bellwin, in his opening speech this morning. I appreciate that this is not a matter which is covered by the regulations now before us; but I hope that the Secretary of State will not take the BMA's proposal as the last word. More may be said about this when we deal with matters related to the seat belt provisions in our further discussions on the Transport Bill which is before your Lordships.
I have studied very carefully what was said in the other place and here this morning, in amplification, by the noble Lord, Lord Bellwin, and what has been set out in the 30th Report of the Joint Committee on Statutory Instruments concerning Regulation 3(2). I think that the Joint Committee was right to draw attention to the implication of the provision for possible future amendments of the Construction and Use Regulations. I clearly understand the point made in the Department of Transport's memo and I appreciate the further clarification given this morning by the noble Lord the Minister.
Before concluding, I should like to ask two questions, but I shall readily understand if the Minister feels that he is unable to answer them this morning. First, will the medical exemption certificate be valid for British motorists when travelling in other countries which have seat belt legislation, as many of them do? If they will be valid, will travellers require an appropriate translation of their medical exemption certificate? Secondly, what will be the position of overseas visitors to this country? Presumably, they will be covered by our legislation—at least, constables will think so. If they have a medical exemption certificate from their own doctor, will they be expected to carry a translation in those circumstances?

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Except for those two questions, and the other points which I have made, I welcome the regulations. I look forward to what I hope will be the unanimous approval of this House, so that we can move as quickly as possible to the implementation of this important piece of legislation.
11.54 a.m.
Baroness Stedman: My Lords, I rise to support the regulations that are before us this morning and will be very brief, because this is not the time to rehearse the pros and cons as to whether seat belts ought to be introduced. That decision has been taken and all we are discussing this morning are the regulations. We have had this question before us eight times since 1973, and from 1975 to 1978 I heard the arguments rehearsed at least three times when I was sitting where the noble Lord the Minister is now, and I have been convinced throughout the whole of our discussions over the years that this is a proper course of action to take.
What I am concerned about, and have some slight reservations over, is the exemptions for people doing short deliveries, because the statistics have sometimes shown that you are more liable to an accident on a very short journey than you are on a long one, and I would be in favour of people being encouraged to wear their seat belts at all times.
I am also concerned, like the noble Lord, Lord Underhill, and, indeed, the Minister, at the fact that £19 has been recommended as a possible certification fee. It seems to me that, if people have a genuine hardship and a genuine handicap, their own general practitioner ought to be able to certify that, without it taking up very much of his time or very much effort. The fact that a fee of up to £19 is likely to be charged may be open to abuse, in that people may be encouraged to shop around and go not to their own general practitioner, but to one who, perhaps, is not in favour of these regulations.
There is another point about the medical certificate on which I should like to be assured. For how long is that certificate valid? I can think of some circumstances where you would not want a certificate for life but only for a few months, and will that be specified on the medical exemption certificate when people get it? With those two qualifications, I congratulate the noble Lord on being privileged to bring forward these regulations, and I wish them a speedy passage.
11.56 a.m.
Lord Nugent of Guildford: My Lords, I must congratulate my noble friend Lord Bellwin on his clear and lucid exposition of these regulations, and, indeed, on his moving of them at the end of this long saga to which the noble Lord, Lord Underhill, and the noble Baroness, Lady Stedman, have referred. It is the final act of a piece of legislation which, I believe, will bring much benefit to life and limb, and I should like to thank all those who have supported me over this long period.
I would remind noble Lords that these regulations have a life of only three years, according to the 1981 Act, and that is a sensible provision. It should comfort
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those who are still opposing the idea of compulsory seat belts, because it will give us time to see whether the hopes and beliefs of supporters are realised; because most people will wear seat belts when it is the law; because those, who are in the majority today, who feel that it is a bit of a nuisance to wear them, will be persuaded to wear them when it is a legal requirement to do so, and will find that it is really not much trouble and it becomes a habit, so that you do not notice it one way or the other.
Among the large fan mail that I had during the passage of this legislation, I had a letter from a man who wrote to me complaining about the prospect. I wrote back and explained the justification, to which he replied:
"I am a law-abiding man so I shall keep to the law, but I still shall not wear a seat belt. I shall always drive my car backwards in future."
I replied to him that next time I was in Brighton, where he lives, I would look for any car travelling backwards, because I would know that he was in it.
But the fact is that most people are law-abiding, and when it is the law they will make the little effort required to start wearing seat belts and will find that it is no trouble. Then I hope that we shall find the benefits which we believe will come from this provision, and I trust that everyone will be contented with what I believe is a reasonable measure. But, in any event, we can review it in three years' time, and if any of the regulations are not right we shall have a chance to propose amendments to my noble friend or his successor, whoever that may be, and also to look at the whole principle of compulsory seat belts, if we still have doubts about it.
There is just one point which I have noticed in the regulations and which I ask my noble friend to look at for the future. I refer to the taxi drivers. I understand that taxi drivers were left out in Australia to start with, but subsequently they asked to be included, because they felt, on the whole, that it gave them protection. Quite a few taxi drivers do wear seat belts, and it is a very rare occasion when one gets out of his seat and does anything for a passenger. All the taxi drivers I have ever driven behind sit tight all the time. Perhaps my noble friend will look at this. I know that the rationale behind it is that he particularly needs to protect himself against possible assault late at night, but I am not sure that it is a very good case. In the differentation between driving examiners and driving instructors, I think that my noble friend has got it right. The driving instructor is, on the whole, going to be safer with a seat belt. I was delighted to learn that the BSM have always made this a rule with their instructors. But the examiner is in rather a different position and it is probably right to give him an exception.
With regard to the medical exemption, as my noble friend has said, these exemptions have been drawn very tightly. The consultative document which the Accident Commission has sent out gives very strong advice to medical practitioners to give exemptions very sparingly. I do not doubt we shall hear from noble Lords who are medically qualified—my noble friend Lord Porritt and the noble Lord, Lord Richardson—that the view of the profession is that the regulations will be justified. But the charging of a fee of £19 does seem a lot. I am hopeful that many doctors

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will not feel it to be necessary to charge that amount. However, as my noble friend has said, the escape route is that the Department of Health and Social Security can give a free examination to the disabled and to those on low incomes. So I hope that that very important aspect of these regulations may prove to be satisfactory.
I believe that these regulations will bring great benefit to our community as a whole, and again I thank all those who have given such splendid support, especially RoSPA, the BMA and the AA, who have helped me so much in this long and now, I hope, eventually successful campaign.
12.2 p.m.
Lord Balfour of Inchrye: My Lords, only due to the courtesy of the noble Lord, Lord Monson, and to an error in the administration who collect the names of those noble Lords who wish to speak am I now intervening very briefly. These regulations are the consummation of a long, hard fought fight, whose history is quite interesting. In 1974, by a majority of seven, your Lordships threw out a proposal in the Transport Bill of the Government of that day, the amendment being that the compulsory use of seat belts was to be introduced. The second victory for those who opposed was Lord Avebury's Bill in 1977 which the House rejected by a majority of 55 to 53. The third victory was over Lord Wigg's Bill, rejected by 86 votes to 82. Then Lord Nugent came along, and since then we have suffered nothing but defeat. The principles of Lord Nugent's Bill were accepted and incorporated by Her Majesty's Government. These regulations implement a Government victory over the opponents, of whom I have been at all times a fairly leading member. I do not like any of these regulations because they still impose the basic principle of compulsion, to which I object. Nevertheless, I shall not argue against these regulations in any detail but will accept defeat on the principle behind them.
I have had now, I regret to say, something over 53 years in Parliament, in both Houses, and I have learned—sometimes the hard way, sometimes not—that the will of Parliament must be accepted in the long run. That is why I think it would be a mistake today to try to counter these regulations. But, while I concede defeat on the main principle, this does not mean that I like all the draft regulations, the weaknesses of which will no doubt be exposed by subsequent speakers.
I conclude my speech of defeat by saying that those of your Lordships in this House old enough to remember Noel Coward's "Bitter Sweet" will remember the lovely song by Peggy Wood, "I'll see you again". These regulations have but a limited life, thanks to the amendment of the noble Lord, Lord Inglewood, which the Government accepted. Therefore I shall see them all again—or, if I do not, I hope other noble Lords will see them again. And then, maybe, we shall see whether they were right or whether they were wrong.
12.6 p.m.
Lord Monson: My Lords, first may I pick up one small point made by the noble Lord, Lord Nugent of Guildford. He claimed that Australian taxi drivers had asked to to be made to wear seat belts
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compulsorily because they felt safer. This does seem strange. Surely there is nothing whatsoever to prevent them from wearing seat belts on a voluntary basis. But I will let that pass.
When we debated seat belt compulsion on numerous occasions last summer we were repeatedly assured by the Government that very serious consideration would be given to the many anxious pleas and suggestions for widespread and generous exemptions. Ministers naturally gave no promises; they were in no position to do so. But, perhaps naïvely, although the maximum fine was particularly draconian by world standards—ten times higher than the new 20 Deutschmark fine introduced in West Germany—we believed that the regulations, in a spirit of traditional British compromise, would not be harsh, given the widespread opposition in the country and given that a large majority of Conservatives were, and are, opposed to compulsion. And we do have a Conservative Government. In the event, the regulations have turned out to be very nearly the strictest in the world, comparable with those in that indelibly socialist country, Sweden. This being so, many noble Lords who voted, perhaps rather hesitantly, last year for compulsion may well wish to change their minds today.
Let me examine some of the regulations. Contrary to expectations, neither pregnant women nor nursing mothers are automatically exempted. One can only imagine the distress this will cause pregnant women who will be worried that their unborn child may be injured when the car in which they are driving brakes sharply at a roundabout or at an intersection, and the worry about discomfort and possibly pain that may be caused to nursing mothers in similar circumstances. No automatic exemption is given to short people—those under 1·5 metres or 5 feet in height. This is all the more surprising in view of a letter from an eye surgeon in The Times a few months ago which described how one of his patients, shorter than the average individual, had been thrown up against his seat belt when the car braked sharply. The seat belt had pressed against an artery in his neck and he had partially lost the sight of one or both eyes.
The Government say that short people can spend money on adapting their seat belts but, as the RAC points out, it is contrary to all normal practice to force motorists to spend money upon altering their cars to conform with regulations which did not exist when they bought their cars. Nor is there any exemption for those whose size or shape makes seat belt wearing difficult or dangerous but whose condition is not strictly a medical one, although 14 out of the 21 European countries, the Australian States and the Canadian Provinces listed do grant such an exemption, including New Zealand, Switzerland, West Germany and Israel. The exemption for those on delivery journeys seems to me to be inadequate. What about newsagents, who have to stop their cars every few yards to deliver newspapers in the morning? Next, there seems to be no provision to counteract the in-explicable failure last year to bring Section 27 of the Transport Act into line with Section 28, as logically should have occurred, by inserting the words, "without reasonable excuse", into the section. This omission is unfair, illogical and anomalous. It is true that exemptions have been given when an inertia reel locks

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when a car is on a hill. But as many motorists will know, the inertia reel frequently locks when a car is standing on the level. Are those living in the Cambridgeshire fens not to have this defence open to them? And what about the many occasions when passengers and sometimes drivers travel by car following minor or semi-serious accidents, when there has been no time to obtain a medical certificate?
It is really not enough to suggest that in these circumstances a court would almost certainly acquit. The point is that the individual should not have to attend the court in the first place. As the noble Lord, Lord Bellwin, has pointed out, driving examiners are not exempt, although driving instructors are: I believe that many people consider this to be totally illogical. After all, the driving instructor is dealing with total novices and he may have to make a grab for the brake at any time. A driving examiner, by the nature of things, deals with people who have had a certain amount of experience.
There is then the question of older cars. The Government themselves admitted in their consultative document—in Annexe B, paragraph 3—that until 1973 many types of belts were difficult to fasten and release. Given that within a few years there will not be many pre-1973 cars available, it seems extraordinary that they have not been exempted from the regulations. In order to conform with the regulations and in order to protect themselves, in providing buckles which release properly, drivers of such vehicles will have to spend money. I suggest that this will penalise the poorer sections of the community.
The question of fees has also already been mentioned. The Minister, in charge at the time told the House of Commons on 19th February 1980 that he envisaged fees in the region of £1 or £2. As we know, the fees have been set at a possible £19. The noble Lord, Lord Bellwin, also mentioned that this affirmative instrument can be modified by a negative procedure under the Construction and Use Regulations at a later date. The noble Lord the Minister assured us that no Government would think of taking advantage of such a loophole but as he surely knows, no Government can bind their successor.
Last but by no means least, there is no exemption for those who are prepared to testify before a commissioner for oaths that wearing a seatbelt adversely affects their driving ability, as many of us urged. I must expand on this extremely important point. We are told that 2,000 drivers and front seat passengers are killed on the roads each year—about one-tenth of the proportionate number 45 years ago—and that some of these lives will be saved if this order is approved. Perhaps this is true, but let us put the matter in perspective. We are not told that there are 4,000 people killed on the roads every year who are not drivers or front seat passengers. Some of them are passengers in the rear seats, lorry drivers, bus drivers or bus passengers—but most are pedestrians, cyclists and motor cyclists. Many of these may be at risk if this order is implemented.
Incidentally, we are not told that several hundred thousand people who are drivers and front seat passengers die every year of causes totally unconnected with motoring; from smoking too much, drinking
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too much, over-eating, falling off step ladders, engaging in hazardous sports and from old age. I merely mention this to put the statistics into perspective. In comparison with the 2,000 drivers and front-seat passengers who are killed, we are not told that each year between 25 and 30 million drivers and front seat passengers do not die for any reason whatsoever.
What is the relevance of this? If this order is approved several million of these 25 to 30 million will suffer irritation and discomfort. If the Government had permitted lap straps belts as opposed to lap and diagonal belts, like the sensible and pragmatic Dutch Government do, this problem might have been avoided. But such a concession has not been granted. The noble Lord, Lord Nugent of Guildford, told us last year that he felt no discomfort when wearing a seat belt. All I can say is that not all of us are as tall, slim and elegant as the noble Lord, Lord Nugent of Guildford. It is a normal human reaction to try to minimise discomfort. For the front-seat passenger the solution is relatively simple. He can tilt and slide his seat back as far as it will go, so as to take the pressure off his chest—or her chest, because one must stress that it is women above all who are going to suffer the discomfort and possibly even the danger of pressure across the chest. The driver, on the other hand, will face a dilemma.
Either he leaves his seat in the optimum position for good driving or he slides it back. Human nature being what it is, I believe that he will, perhaps even without realising it, slide his seat back away from the wheel and become somewhat more of a risk to other road users as a consequence. Nor is this all. We have seen from the events at Buckingham Palace recently how a sense of complacency and over-confidence can lead to slackness and inattentiveness. This applies equally the question of seat belts. An over-complacent driver is far more likely to lack alertness and be involved in accidents.
Furthermore we read in the Daily Telegraph of 23rd July 1981 that an institution called the Applied Psychology Unit of Cranfield Institute of Technology's School of Automotive Studies in Bedfordshire discovered that 14 per cent. of drivers risk their lives when overtaking. If drivers gain further confidence as the result of a false sense of security given by a seat belt, is not that 14 per cent. likely to rise to more than 20 per cent.?
Also, there is no dispute that some will be killed because they were wearing seat belts: for example on 4th August 1981 a woman was strangled by her seat belt. To be fair to the noble Lord, Lord Nugent of Guildford, he did concede this point last year. In other words, if this order is agreed to, what is gained on the swings will be to some extent at least lost on the roundabouts.
Less than three weeks before his untimely death in February of this year, the late Sir Ronald Bell wrote to the then Minister suggesting that the general tenor of the proposals,
"is unduly influenced by the à l'outrance approach of the most militant campaigners. As the comparative table in the consultative document shows, the proposals are the strictest and most vehement of all the regulations in the world. When you are dealing with the British people, I cannot think that that is right".

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I believe in traditional British moderation and compromise. We have not had this British moderation and compromise. The proponents of compulsion seem unwilling to see other points of view and have been totally inflexible. Traditionally, we have always had a free vote on this issue and I hope that those of your Lordships who agree with me will cast your votes accordingly.
Viscount Cross: My Lords—
The Earl of Avon: My Lords, I believe it is the noble Lord, Lord Richardson, who is next to speak.
12.19 p.m.
Lord Richardson: My Lords, I am sure that the noble Lord, Lord Nugent of Guildford, is right, as he is in so many things, when he says that the medical profession will apply medical exemptions very carefully and conscientiously, and will try to minimise their number because there is so little justification for them to do otherwise. I am equally sure that they will wish to follow the suggestion of the noble Baroness, Lady Stedman, that temporary exemption should be used, and that exemptions should be reviewed from time to time. I think that this means that doctors who will be concerned with giving exemption will be determined to do so scrupulously, and I hope that the fee that has been discussed between the Minister of Transport and the BMA will be seen as reflecting the possibility of a great deal of careful work having to go into the signing of, and estimating the justification for, the certificate.
I feel that in quite a number of instances the candidates for exemption would be well advised to discuss the matter with such consultants as orthopaedic surgeons, rheumatologists, perhaps obstetricians; but I will point out, I hope for the comfort of the noble Lord, Lord Monson, that a series of 23 pregnant women who were wearing their seat belts when involved in accidents was followed up from the time of their accidents, accidents involving collisions from five miles up to over 70 miles an hour, and all those 23 were delivered normally at the normal time without any damage from the seat belts to themselves or to the foetus, to the baby.
I feel that considerable difficulty may arise with those who are severely disabled, and the noble Baroness, Lady Lane-Fox, will doubtless mention this. Proper adjustment of the car and of the seat belts, careful experimentation in design and modification will be part of the information which your Lordships will require when this matter comes up for review. I feel that this element of finding out what really is helpful, what can be done for the cars and for the fitting of the belts to people of various shapes, however eccentric, is a most important part of the programme of review, and I hope that it will take place with the greatest possible care.
I must confess to an interest in Motability, the organisation that helps people to make the best use of their mobility allowance. They are able to modify cars really rather simply; it is surprising how much can be done by simple measures. This, I hope, may enable most people to wear their seat belts; and I am sure that all doctors, when they are considering exemption or not, will consider whether the failure to
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wear a seat belt is more serious than any discomfort or potential disadvantage that might follow from wearing one.
12.24 p.m.
Lord Lucas of Chilworth: My Lords, I am very grateful to my noble friend the Minister for the very careful explanation of these regulations, to which I wish to draw your Lordships' attention very shortly. I quite accept that Regulation 3, which relates to the Construction and Use Regulations, is desirable, because I would look forward within a very short time to those Construction and Use Regulations being very severely amended. It is of some great disappointment to me that since Parliament decided on the principle of compulsion the seat belt manufacturers have progressed so little in a uniformity of locking mechanism and a simplification of locking. So I would hope that they would be able to move a little more rapidly in the next few months without us having to come back to Parliament.
I turn to Regulation 5. That deals with the exemptions. I have to say that I am very disappointed with regard to the British Medical Association's attitude concerning fees. I am equally disappointed that Her Majesty's Government have not utilised the powers in the Bill to prescribe fees. It is my experience with most professional people that where their professional body suggests or recommends a fee, that is the fee that is paid. So much so that the then Under-Secretary at the Department, Mr. Kenneth Clarke, spoke at the Standing Committee's investigation into this matter of "a pound or two"; that has been quoted, and it is on the record. This matter is reinforced by the current Parliamentary Under-Secretary of State, Mrs. Chalker—this has all already been quoted this morning—who said that she was sad that the BMA were going to suggest this £19 fee. She went on to say in the same paragraph (22nd July, col. 646):
"That is why we seek to ensure that people on low incomes and the disabled are covered by the DHSS Medical Service."
I understand there are some 7 million of those people. It could be that the DHSS is going to be faced with some fairly colossal cost if a large proportion of people decide to apply for exemption. I know we are going to return to this; I can promise your Lordships that we are going to return to this matter when we deal with the further parts of the current Transport Bill on Report stage in October. I would say this now. I think the Government should make further and more determined efforts to secure a fee that is going to be more acceptable. I would say this to the BMA, that they should examine whether they are really performing some part of their social duty in fixing this fee.
I turn to Regulation 5 (k). This is the one which exempts motor mechanics in the course of their job from wearing seat belts if they are operating under trade licence plate. I think I can understand the reason for putting in the trade licence plate, as amateur mechanics are thereby disbarred. There are, however, a great number of quite reputable little garages who do not operate on trade licences. The trade licence is normally only used where the vehicle itself does not have a current vehicle excise duty, the road fund licence.

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So I can see that some difficulties might arise. In a very large organisation, where there are perhaps eight or ten testers, there are unlikely to be sufficient trade plates to go round, because they may be used for the collection of unlicensed vehicles somewhere else. So I can see that the industry might be faced with some little difficulty here.
Regulation 7(a)(ii) refers to Construction and Use Regulations. I should like to see here a positive move by Government to encourage belt manufacturers to improve their belts. I do not think that we should wait for three years, as has been suggested. I should like to hear from my noble friend the Minister that there is continuing research, particularly at the TRRL, into seat belts. There is an exemption in the regulations with regard to an inertia reel belt that becomes jammed on an incline. That is not the only usual cause of failure. The usual cause of failure in inertia reel belts is the locking mechanism. It is of some concern to me that I was asked by one of your Lordships if I could obtain a new part for him. I was able to buy the part on the Continent for him. It was not available in this country from the seat belt manufacturer and nor, indeed, from any shop. They would only sell a set of seat belts—there were four pieces and we only wanted one. That seems to me to be rather a stupid arrangement. As regards the seat belt manufacturers, let me say that they also have a social responsibility.
The final point that I should like to make relates to the report that is going to be put before Parliament in three years' time, and that is provided for in the Act. I would like within the next few months—perhaps my noble friend could write to me—to be told exactly how the monitoring will be undertaken, and the base from which we are going to start. I do not accept some of the claims that have been made with regard to the saving of many lives. It may be argued that if only one life is saved then this Bill is a good thing. I have never felt this. I have never felt that compulsion should be applied to so many people for so very few people who, in the main, have made an individual choice. So I should like to see the base from which we will start the monitoring, and the figures. Otherwise I really feel that Parliament has expressed its will—quite contrary to my own, let me remind your Lordships—and compulsion is here. These are the regulations and I believe your Lordships should approve them.
12.33 p.m.
Lord Porritt: My Lords, I think that we must all be very grateful to the noble Lord, Lord Bellwin, for giving us the original direction and stopping us discussing the original Act and sticking to the business of this morning; namely, the regulations concerned with that Act, which is of course, an enabling Act. I still have a vague feeling of Nero fiddling while Rome is burning. I say that because it is more than a year since the seat belt Bill was passed in this House. There were a number of discussions prior to that, as your Lordships know well. It will be at least another six months before the regulations can possibly come into force. I cannot help thinking that in the interval since the seat belt Act was passed, there have probably been something up to 750 deaths and thousands of
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serious injuries giving great human suffering and economic loss—both unnecessarily. I bow to my most courteous of opponents, the noble Lord, Lord Lucas of Chilworth, who does not believe these figures. I am not a great believer in figures either, but they have been checked in various parts of the world over and over again and whether the details are correct I do not know, but the general tendency is certainly to show that a lot of unnecessary lives are lost and a lot of unnecessary injuries take place.
I speak this morning purely medically as president—and incidentally some 20 years ago as founder—of the Medical Commission on Accident Prevention, which was the body which has been responsible for producing the guidelines for the Minister on which he has dealt with the question of medical exemptions in these regulations. They have shown in a very simple and straightforward document that the conditions which make it inadvisable for a driver of a car or his front seat passenger to wear restrictive belts are remarkably few. I am quite sure that the Government and the Minister have been grateful to them for the fact that they have simplified what might or might not have been a maze of contradictions and possible exemptions. In other words, I think that the giving of a permanent certificate on medical grounds will be quite rare. But there will be the necessity for temporary exemptions, as the noble Baroness, Lady Stedman, mentioned earlier on, after some more recent illness or traumatic incident or, for that matter, while the seat belts or the seats themselves in the car are being adjusted to the individual's needs.
As regards the disabled, I can only reiterate the words that we have heard so often from the noble Baroness, Lady Masham of Ilton, that the disabled need the protection of seat belts much more than the average person. In fact it has been shown that the disabled are almost habitual wearers of seat belts without any regulations or restrictions at all. The more they are disabled, the more they tend to wear seat belts. In passing, I should like to underline one point that the noble Baroness, Lady Masham, made in our debate on 15th July. She said that for paraplegics it was very essential that, apart from their seat belts, which were also essential—they should also have headrests, because with their lack of control, "whiplash" is very likely.
On the question of medical exemptions, I think that it is a pretty good rule to say that anybody who is fit to drive a car is fit to wear a seat belt. It makes it fairly simple—perhaps too simple, as these things often are. But equally well I should like to say that all the owners of orange badges should certainly not claim automatic exemption.
Perhaps I may deal very briefly, as did the Medical Commission on Accident Prevention, with some of the conditions which have become "front runners" in the "exemption stakes", if I may put it that way. These have been quoted in the document produced by the Medical Commission on Accident Prevention. They deal with stiff necks and stiff shoulders. Your Lordships will remember that the procedures of "reversing" are already exempt. So that, to a large extent, copes with the trouble in that region. However, these conditions can very often be compensated by

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movements of the trunk or by the proper use and adjustment of either side or rear mirrors.
Chest scars are a common cause of trouble and argument. They can be avoided by properly adjusted belts to prevent friction and by varying the height of the seat or the point of fixation of the belt. The same applies to abdominal scars. The moot question of ileostomies and colostomies where the bowel opens on the abdominal wall are slightly more difficult, but I can only say as a very ex-surgeon, that the openings of colostomies and ileostomies should be out of the target area of a belt, if they have been properly made.
I hardly dare mention the word "pregnancy", because the last time I did so I was told in no uncertain terms by a number of noble Baronesses in this House that as I had had no personal experience of the condition my remarks were those of a male chauvinist pig. I think that the noble Lord, Lord Monson, will probably agree with those remarks. When the noble Baroness, Lady Stedman, spoke about "short delivery" I wondered whether we were getting into more difficult problems on the pregnancy side, but apparently she was not talking about that at all. Because of the barrage that I got on the last occasion, I have gone to some trouble to try to find out all there is to be found out about the question of pregnancy and seat belts in other countries, some of which have been enforcing the wearing of seat belts for a considerable number of years and some for not so long.
The noble Lord, Lord Richardson, has already told us more or less the result of those inquiries; namely, that none of the countries using seat belts has found any sound grounds for automatic exemption. That applies to any stage in pregnancy. Here again, very often one finds that the pregnant woman tends to be a habitual seat-belt wearer, for the simple reason that common sense tells her that she is not only saving herself but her unborn baby. As the noble Lord, Lord Richardson, has already said, there has been no report anywhere of an unborn baby being killed by a seat belt.
When we come to the question of obesity, stature, size and shape, I think that any fair person would agree that this is a much more difficult problem. But when—as the noble Lord, Lord Lucas, suggests—we have more useful seat belts, I believe that these problems will be coped with as from individual to individual.
Claustrophobia is another popular reason for exemption and it is not easy to summarise. The claustrophobic can, in general, be persuaded that it is foolish to be frightened of a seat belt, particularly if he or she is not frightened of getting into a car, which after all is a little contained box in itself. If he can get into that, then to wear a seat belt is simply an extension of the claustrophobia which the car may or may not produce.
There is one other small point concerning pacemakers worn by people with heart conditions. I looked into this, because one might think that the pacemaker was in a pretty dangerous position qua seat belts. Nowhere has there been any report of damage to a pacemaker, although I gather that patients have been advised to have their pacemaker looked at after some incident in which the contact of the belt with the pacemaker might have been closer than comfortable. So it would seem that obvious medical
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conditions calling for exemption are really very few indeed.
If I must say something about the fee charged for examination—and I do not do so very happily—I should like to say how sad it is if the motivation of the general practitioner is in any way impugned by this fee, which was agreed between the Government and the BMA. I wonder how many of us here are really qualified to adjudicate on its correctness or not. What is the fee for in the first place? When we think of the number of people who will apply for this—and in view of these regulations they will not be very many—and when we think that, quite rightly, a large number of those who are poor or disabled will be paid for, I cannot envisage any doctor making a large fortune out of examinations for exemption fees. If a full examination is necessary—and it may come down to that—they would be so few that they would be rather special cases and would want investigation; so it may be that the fee will not be quite so gross as it seems to many people.
In conclusion, let us remember once again the number of eminent bodies which have hacked the wearing of seat belts to the hilt and which are equally well backing these regulations. Personally, I fervently hope that we have reached the stage where niggling, carping criticism can stop and that we shall be prepared to try to work this really great and major experiment in life-saving.
Lord Monson: My Lords, before the noble Lord sits down, would he kindly clear up one point which puzzles me? He mentions that he is President of the Medical Commission on Accident Prevention. Does he not agree that the wearing of seat belts will not and cannot prevent one single accident?
Lord Porritt: No, my Lords, I certainly cannot agree because I believe that they will prevent a lot.
12.46 p.m.
Baroness Macleod of Borve: My Lords, I and many thousands of people in this country had hoped that this day would never come, for over the years we have been told ad nauseam that this measure will save lives—so it may. But we all know of cases, and many Members of your Lordships' House have told us over the years of cases, where the wearing of a seat belt has trapped the wearer and has led to death. That is a well known fact which has never been statistically acknowledged by the Road Traffic Laboratory or by any Transport Ministries. Indeed, I have sometimes wondered whether people there ever read the newspapers in which the accidents are reported.
However, as we have been so ably told by the Minister, this morning we are not discussing the actual principle of this Act because the elected Chamber in the other part of the Palace of Westminster has voted for the compulsory wearing of seat belts. So it has been decided that this is to come into force.
Therefore, we are discussing the regulations and I want briefly to comment on some of them. First, I should like to comment on No. 5—which was mentioned by the noble Baroness, Lady Stedman—as to what makes a "local" round of deliveries. As the noble

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Baroness said, I think it is well known that a large number of accidents happen locally when perhaps one's defences are down and one is not particularly thinking of what one is doing.
Regulation 5(b) is:
"driving the vehicle whilst performing a manoeuvre which includes reversing".
What is a manoeuvre? I would have substituted "driving in reverse gear".
Regulation 5(g) says:
"in the service of a fire brigade and is donning operational clothing or equipment".
Such a person need not be wearing a seat belt then; of course, it would be utterly impossible. However, I should like to take this a little further, because I hold the view very strongly that to wear a seat belt impedes one getting out of a vehicle speedily. As I said one year, although I have forgotten which year, I should like the police, when going to the scene of an accident or to investigate a burglary, ambulance crews and fire brigades to be exempt when on operational duties.
One then comes to Regulation 7 concerning the descriptions of seat belts. I should never be happy unless seat belts were able to be unhooked at the doorpost of a car. So far no one seems to have suggested that they should be. Otherwise a driver can be locked in and, without lifting gear, it would be quite impossible to get the door open. I do not know how many noble Lords present today saw in today's Daily Telegraph a report of an inquest on a man who died as a result of wearing a seat belt because his seat belt was improperly fastened and improperly adjusted. His intestines were made gangrenous by the pressure of the buckle, and he died. Until seat belts are compulsorily of a uniform design so that everybody knows where the buckles are, and how to unfasten them from the door posts, it is highly dangerous that they should be made compulsory.
The noble Lord, Lord Nugent, drew our attention—and so did the noble Lord, Lord Lucas—to the fact that these regulations will be in force for three years. I should like to know, as would my noble friend Lord Lucas, how we are going to get any statistics about what has happened as a result of accidents and as a result of either wearing a seat belt or not wearing a seat belt during those three years. I have asked many people who have been in accident wards in hospitals, and they never find out. Those that I have asked have never even asked whether the injured person was wearing a seat belt or not. I suggest that perhaps we should ask the police to keep statistics, because without them I do not think that in three years' time we shall be any further forward than we are now.
As a disabled person I am speaking personally. I have a great fear of being trapped in an accident, in water, or in a fire. However, I am pleased to hear my noble friend the Minister say that this issue is of a sensitive nature and that it is a difficult subject. If the Minister approaches it in that light then I hope that the end product will not be as bad as I fear.
12.52 p.m.
Lord Auckland: My Lords, like a number of noble Lords who have spoken in this debate, I am an honorary vice-president of the Royal Society for the Prevention
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of Accidents. I am also a member of the Joint Committee on Statutory Instruments, which gave considerable thought to these regulations. Of course it must be accepted that seat belts will no more prevent every accident occurring than giving a child a shotgun and saying, "Well, you will have one cartridge instead of two". There are always going to be loopholes.
There is a strong case—there has been for a long time—for the standardisation of seat belts. I wonder whether the Government have really looked into this as carefully as they might in co-operation with the BSI. This is germane to the regulations we are discussing. If those who own old cars with seat belts fitted to cars with a B or a C registration—seat belts which could well be lethal—have to change those seat belts into modern-type seat belts to conform with the regulations, are they going to receive any kind of grant either off their road fund licence or elsewhere in order to do this? It is not always the case that drivers are wealthy people. Some need their cars, albeit old cars, for essential purposes and, while I believe in the main that these regulations are entirely desirable, some assistance should be given here.
We have heard the story of the liberty of the individual. I would make the point, even though it perhaps goes back to the legislation which will make these belts compulsory from January next year, that those who have relatives in the nursing or medical professions and who have seen and dealt with these accidents almost invariably say that if a seat belt had been worn, the injury would have been avoided.
Looking at the compulsory seat-belt wearing for adults and children in cars and the evidence about exemption submittted on 8th December 1981, one sees some rather strange anomalies. For example, in New Zealand it was said that drivers who were belted could not operate the brakes, dip switch, indicator, horn, wipers, choke, or sun visor. I do not believe this to be an adequate exemption at all. This must be the fault of the design of the car. Every driver, particularly in an emergency, has to use both the brake and the horn. If one has a blinding torrent of rain, as one could have in New Zealand as well as anywhere else, the same is true of the windscreen wipers. Also, in Norway we have low speed journeys involving frequent stops. We know that this presumably refers to newspaper vans and milk floats. Nevertheless, these are stretching the regulations rather far.
I believe that these regulations are desirable. There are snags in them. There are problems in every kind of legislation of this kind, but they are coming in for a trial period. Your Lordships will all hope that Her Majesty's Government will make a careful study in conjunction with ROSPA and the Road Research Unit and other bodies to see how this legislation works. We all want to see fewer and fewer accidents on the roads, particularly to children and elderly people, and notwithstanding any objection there may be, and any problems which undoubtedly exist, the wearing of seat belts will contribute substantially towards this end.
12.58 p.m.
Lord Somers: My Lords, I should like to support these regulations, although I admit to having had in the past some rather mixed feelings about them. However, I am sure that if the noble Lord, Lord

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Bellwin, can give me some assurance on the main point that I am going to raise those feelings will disappear. The noble Lord said during his very able exposition of these regulations that one did not want to have too many exemptions. I entirely agree. One can have so many exemptions that one begins to wonder to whom the regulations apply. However, there are two slight exemptions that might be good. They may be there already, in which case I apologise. I am afraid I have not read the regulations as carefully as I should have done.
One is for those who are doing door to door deliveries—and here I use the word "deliveries" in the same sense as the noble Baroness, Lady Stedman, and not that of my noble friend behind me—such as milk vans, for instance. If you are constantly getting in and out of your vehicle, the wearing of a seat belt is possibly rather an extra nuisance. The other is when you are manoeuvring a car in a car park. The trouble is that a seat belt often prevents you turning around while you are in the seat and seeing exactly where you are moving your car to. As you are not likely to have a head-on crash while manoeuvring the car in that situation, it might be a possible exemption.
The main point I wish to raise is that if we have these regulations it is absolutely essential that there should be some standardisation of belt, a point to which reference has already been made by the noble Baroness, Lady Macleod, and the noble Lords, Lord Lucas and Lord Auckland; and Lord Auckland raised the interesting point: if we have standardisation, how long will the car-owner be given before being compelled to have the standard type fitting?
I feel standardisation is essential because it is vital to have a quick release mechanism, since it is not unknown, for instance, for a car to catch fire, and if you cannot release your belt quickly, you may well become a victim. Time and again I have got into other people's cars and fiddled for five minutes or more before finding out exactly how the belt was fixed, or, worse still, how it was unfixed. The release mechanism should be instantaneous, and I suggest that something like a push button release would be ideal, and that should be easy to arrange. In any event, the important point is that the belts should be absolutely standardised. Before the debate, a noble Lord, in talking to me, suggested international standardisation, and that should be our aim; but before that can be achieved it is essential to have our own standardisation. To make that point was the main reason why I put my name down to speak, and I hope the Government will seriously consider it.
1.3 p.m.
Lady Saltoun: My Lords, the noble Lord, Lord Porritt, said anyone fit to drive was fit to wear a seat belt. I hope I have not misquoted him. I would tend to agree with him if I were happier about the design of seat belts, but I am not happy about their design so as to be comfortable for all shapes and sizes of wearer, and I repeat that I rate comfort for the driver of a car very high indeed. An uncomfortable driver is an inattentive and even bad-tempered one, and that is very dangerous.
In view of the fact that the order has been pending for a year, I am amazed at how few cars have a variety
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of fixing points for seat belts, for this is a matter which needs urgent attention. A simple device to stop an inertia reel belt tightening itself beyond a point would overcome many problems, medical and other. Even more so would less fierce inertia reels. The difference between aircraft seat belts, which most people find acceptable, and car seat belts, which many people do not, is that aircraft belts, besides being lap belts only, have no inertia reel so that once adjusted so as to be comfortable, they remain comfortable. It is the too fierce—it may sound like the reaction of a wild animal, but I mean the too strongly sprung mechanism—inertia reel which is the culprit. It is not, as the Department of Transport and their advisers seem to think, the old-fashioned belt, which can be very comfortable indeed but is inconvenient in other ways.
Have the Government put any pressure on manufacturers to remedy these defects? Could it not be done by altering the Construction and Use Regulations? I am sorry that something has not been done already, long ago, to put pressure on manufacturers, because it is rather late now and one would like to see the results coming through before these regulations come into force.
As for the exemptions, I wish to consider first those on medical grounds, and I should like to know the composition of the Medical Commission on Accident Prevention. Does it include obstetricians, psychiatrists and specialists in other branches of medicine? If not, have such specialists been consulted? Particularly, have obstetricians been consulted about pregnant women and nursing mothers? If so, what was their advice? My experience of experts is that most of them are expert only in their own field and know nothing whatever about anything else, let alone everyday life. Their advice should be listened to but it should never be taken as gospel.
Some of the opinions expressed in the Guidelines for Practitioners by the Medical Commission for Accident Prevention suggest to me—I hope the noble Lord, Lord Porritt, as chairman, will forgive me for saying this—that the members go about in chauffeur driven cars, taxis or public conveyances and never drive themselves or, if they do, do not wear their seat belts. On page 2 they indicate that discomfort to the chest from seat belts occurs only when friction is caused by the seat belt being too loose. When I read that I went straight out and drove eight miles with my very tight-fitting inertia reel belt fastened. The movements necessary to drive the car caused continual friction. Had the belt been looser, the friction would have been much less, and had I been a passenger, I should not have needed to make the movements which caused the friction.
On page 4 they pooh-pooh the idea that very fat people might have a case for exemption on the grounds that the belt is not long enough. The fat man will obviously try to get a longer belt fitted in his own car, but what happens when he is a passenger in somebody else's car? I hope he will not be told to squeeze into the back seat of a Mini! What happens when he is a passenger in a sports car, or hires a self-drive car and the belt will not go round him? They go on to say that if his girth makes the belt uncomfortable, he can improve matters by,
"moving the seat and adjusting the belt".

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All of those who drive cars know perfectly well that the vital thing for a driver is to position the seat so as to have maximum possible control over the car. Other considerations are neither here nor there. You cannot move the seat back so that your feet barely touch the pedals in order to make the belt comfortable.
On page 6 they say:
"Inertia reel seat belts do not restrict movement".
That is quite untrue. If they did not, there would be no point in having them. That is what they are for. They go on to say that shortness of stature is no obstacle to wearing a belt. There was a letter in Wednesday's Daily Express from a 5ft tall woman who said that seat belts cut her across the neck. No fixing point I have so far seen will prevent that. The Secretary of State's explanatory paper of last September said on page 9:
"Any driver who has difficulty, belt or no belt, in reaching the controls, should not be driving in such circumstances".
Unless I am very much mistaken, the 5ft tall woman—who can reach the controls perfectly well with the seat right forward, but then cannot wear her belt—should not be driving. That is nice! Her living even may depend on her being able to drive. But that does not matter; by not having grown tall enough to wear one of the types of belt at present available, she is to become a second-class citizen of a country in which Mr. Average Man is going to make sure that he is all right, but never mind anybody else. If she has a sensible, kindly doctor, he may take the risk of giving her an exemption certificate, though I do not quite know on what grounds he would do so. On the other hand, he may not.
Later in the Secretary of State's document we have Annex E which gives the exemptions in other countries. If I am right in my interpretation of the various phrases used, only three other countries do not have exemption for people who are unable to wear belts due to their size or shape. I regret that we are to be less civilised in this matter than our EEC partners and those other countries. Some countries also exempt passengers over 69 or 70—I think that that would be a good thing—and some exempt foreigners who are exempt in their own country. So what about our precious tourists?—both those exempt in their own countries, and those who are not compelled to wear seat belts at home.
Finally, can the noble Lord, Lord Bellwin, assure the House that the £19 fee is the absolute maximum where detailed examination by a specialist is required?—otherwise it seems excessive. In any case, I query the justice of anyone being made to pay for a certificate which has become necessary only through a combination of misfortune and Government interference. Besides, the noble Lord indicated to us at the Report stage of the Transport Bill last year that the probable fee where examination was not required would be under £2.
1.10 p.m.
Lord Mottistone: My Lords, first, I should like to thank my noble friend Lord Bellwin, and indeed my honourable friend the Minister in another place, Mrs. Lynda Chalker, for correspondence over the
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year in relation to the last Transport Bill, and in particular in relation to this subject. I followed the point made by my noble friend Lord Balfour of Inchrye, that we are not here to debate the principle of the matter, since, sadly, we agreed to that some time ago, and we are concerned mainly with the regulations that are before us. But there is one point that I should like to make, arising from words which were uttered probably without really thinking them out by both the noble Lord, Lord Porritt, and my noble friend Lord Auckland, to the effect that the introduction of compulsory wearing of seat belts will mean fewer accidents. It surely cannot result in that. Indeed, if the noble Lady, Lady Saltoun, is to be believed, it might cause even a few more accidents. What compulsory wearing might do, and what I am sure the doctors think it will do, is to reduce the number of deaths and serious injuries arising from accidents; and that is a more accurate way of putting it. Those of us who are altogether against the legislation would argue that that is not likely to be the case; there is not sufficient evidence to show for it.
Like my noble friend Lady Macleod of Borve, I believe that we must have good statistics, and I hope that my noble friend Lord Bellwin will take note of her suggestion that the police should be asked to provide the statistics. That would be very useful, so that in about 18 months' time, when we are beginning to consider the continuation of these rather unfortunate regulations, we shall have some sound statistics to go on in order to argue the point. I think that there is a great difference of opinion among many of us in this House and in another place.
I turn now to points in relation to the regulations themselves. I have given to my noble friend notice of the first two points that I want to make. The third point I shall spring as a surprise—but not a nasty one. First, when we earlier debated the general principle I asked the Government, in at least one amendment at what should have been the Committee stage, but which was in fact Report stage, to reassure themselves that there was a sufficient range of BSI-approved seat belt designs to meet the needs of users of all shapes, sizes and ages. Other noble Lords have made that point in other ways, but the key consideraton is that I asked the Government to reassure themselves on it before they brought the regulations into force, and I hope that my noble friend will be able to give me that reassurance.
In giving him notice I said that I would not be satisfied by a reference to the extremely detailed provisions in Regulation 17 of the Construction and Use Regulations, because they were introduced in 1979, and there is considerable evidence to show that the seat belts at present in use do not satisfy all shapes and sizes of people in the way on which I asked the Government to reassure themselves. Many people, including the noble Lady, Lady Saltoun, have made it quite clear how important it is that the seat belt fits the person; otherwise wearing it can be more dangerous, rather than safer.
The next point on which I advised my noble friend relates to Regulation 5(a), in regard to which he gave as examples Post Office and laundry rounds. I should like him to tell me specifically whether that

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regulation applies also to deliveries of foodstuffs to shops in towns.
Now I come to the unexpected question, but it is relevant to what I was saying regarding my first point. The RAC sent me an interesting piece of paper which stated, among other things, that most other countries—I presume the RAC means other countries which have legislation on compulsory wearing—exempt short people from the obligation to wear a seat belt. This applies in, for example, Denmark, France, Luxembourg, the Netherlands, Norway, Sweden and West Germany, to people under 150 centimetres in height, which I am told is approximately 5 feet tall. The Australian states have exemption where a physical condition—which also covers large people—justifies the issue of a certificate.
I should like to ask my noble friend whether it is the case that under Regulation 5(d) short people will be issued with exemption certificates, as in all the other countries that I have mentioned. I think that what the noble Lady, Lady Saltoun, said in this regard was very relevant, and I shall not repeat it, but perhaps in considering my request my noble friend will remind himself of the fact that short people who have seat belts that are not long enough either will not be able to drive at all, or will be under permanent strain and will not drive properly. I should be very grateful if I could have the answers to those points. In the meantime, I hope that we do not have to put up with the regulations for a moment longer than is necessary.
1.17 p.m.
Baroness Lane-Fox: My Lords, my first aim today is to convey to your Lordships the views of the Royal Association of Disability and Rehabilitation, on which I serve as a vice-president. The association firmly considers that whenever it is at all possible disabled people should wear seat belts. Indeed, through figures provided by the BMA, it would appear that a higher proportion of disabled drivers already wear seat belts than is the case with the able-bodied. However, there are cases where the use of a seat belt causes unnecessary pain, or creates such other difficulties that the requirement to wear one prevents a disabled motorist from using a car. That indeed may cover one of the points mentioned today by my noble friend Lord Mottistone, in regard to the problem of the short person. The extra difficulties include those that are experienced by some trike drivers. RADAR believes that these cases, small in number as they are, should be given a certificate exempting them from wearing a seat belt.
RADAR claims that many disabled organisations are worried about the cost of the medical examination required—we have heard the cost mentioned today—before such a certificate may be issued. Although I understand that there is to be exemption of the charge in cases where a mobility allowance is payable, nevertheless there are some disabled people who do not fall within that category. For instance, there are disabled motorists whose age precludes them from receiving the mobility allowance.
In order that such occasional cases shall be accommodated, RADAR asks that medical examination, for the purpose of obtaining a certificate of exemption, should be free for any appropriate case that is already
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registered as disabled with the local authority. Where cases eligible for the exemption are not registered with the local authority, possession of an orange badge should be accepted as proof of registration. If an orange badge is not possessed, a letter from a social worker confirming registration would need to be obtained. These are RADAR's suggestions. RADAR stress that their wish is not to seek for orange badge holders or others registered with local authorities exemption for all from the seat belt regulations, but merely to absolve the very small number who may prove eligible for exemption from paying the £19 fee for the medical examination.
My Lords, I make one last plea on the much-discussed subject of seat belts themselves. It really is necessary that belts be made with quick and easy release, and of standard design, please. Easy release matters so much for people who have ungainly and awkward hands and arms and who have to use a car for travel to work and for other, extra special purposes. I am a little mystified that there is still this puzzlement about the type of seat belt. Perhaps my noble friend the Minister will tell us why it is that we cannot use the best that is in use overseas. I am sure there is some very good reason for that.
I began by saying that it was RADAR's view that wherever it is at all possible disabled people should wear seat belts in the interests of their own safety. Certainly I happen to be one who always wears mine. Anyone who works with disabled people will feel as keenly as I do that people who are able-bodied should be required to "belt up" now, not only in their own interests of safety but also in the interests of relieving over-used hospital beds.
1.22 p.m.
Lord Airedale: My Lords, I apologise for not having put my name down on the list of speakers, but I was not sure that I could be present. I want to make only one very small point. There will inevitably be people who will have been trapped in their crashed cars by not being able to release themselves from their seat belts, and some of these people may be haunted by the most terrible fear of this experience happening to them again. If they go to their doctor and he is satisfied that this experience really happened to them, and if he is satisfied with the advice of a psychiatrist if he thinks it is necessary, then I hope that on medical grounds these people will be exempt, and will not have to go on fastening themselves into cars after having had this terrible experience in the past.
1.23 p.m.
Viscount Cross: My Lords, I must also apologise for not having put my name down on the list of speakers, but, with the leave of the House, I should like to support the noble Lord, Lord Monson, and the noble Lady, Lady Saltoun. Like my noble friend Lord Mottistone, I am also in favour of just one further exemption, and that is for people who are less than five feet tall. Of course, the danger with people who are less than five feet tall is that the belt comes across their neck and across their windpipe, and that is a very dangerous thing to happen. The Government may say that you can raise the seat, you can sit on a

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cushion or you can lower the anchorage point, but I do not think that in practice any of those things is likely to happen.
In this document, with which I know your Lordships will be familiar, Compulsory Seat-Belt Wearing for Adults and Children in Cars—Proposals by the Secretary of State for Transport, dated 8th December 1981, Annex E lists the exemptions. The countries in which, as my noble friend Lord Mottistone has said, there is exemption for people under five feet tall are no less than nine in number: Denmark, France, Luxembourg, the Netherlands, New Zealand, Norway, Sweden, West Germany and Israel. There are a further three in which there is incapacity by reason of size by certificate. Those three are all the Australian States—and there are six of those—Tasmania and Canada. I should like to ask my noble friend the Minister what is the reason why all those countries, all twelve of them, have thought fit to give small people an automatic exemption. I think there must be a good reason for that.
I can think of cases in this country of people living alone in the country who might take their cars when they go to the shops, say, once a week. Those people might be prevented from driving altogether, and in those circumstances, because they could not drive, might have literally to move house to somewhere else rather near the shops. I do not think the Government would want such an upheaval in quite a lot of cases. For those reasons, I ask the Government to make an exemption and to place the exemption I have suggested in these regulations. In concluding, may I ask the Minister one question? Do newspapers come within the category of goods? Would someone delivering newspapers be exempt from these regulations?
1.26 p.m.
Lord John-Mackie: My Lords, I, too, should like to apologise for not putting my name down on the list of speakers, but I was sure that the two points I wanted to make would be made by other speakers. However, they have not been, so if your Lordships would bear with me I should like to make them. First and foremost, I should like to agree strongly with the noble Lord, Lord Nugent, about taxi drivers. When one thinks of the number of taxi drivers who drive out to London Airport, more than half the distance on a motorway, at very fast speeds, the fact that they are exempt from wearing seat belts is in my opinion quite ridiculous. What is more, as the noble Lord said, very few of them leave their seats anyway when carrying passengers in town. I think the question of taxi drivers is something which will need to be looked at.
The other point I want to make is this. I drive two cars and one has a very clear red light which flashes if I have not got my seat belt on and also makes quite a loud noise. When I drive that car, I very soon put on my seat belt if I have forgotten. In the other car there is simply a small red light which is out of my vision because I have to sit rather far back, and I very seldom have a seat belt on in that car. I think manufacturers should be encouraged to put such a warning light, together with the noise, in cars, to remind people that they have not got their seat belts on. I think it is a very necessary thing indeed. I think Stirling Moss had
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a seat belt the operation of which connected with the switch, and you could not start the car without putting on the seat belt. I would not go to that length, but I certainly think that a warning light and a noise is very necessary.
The question I should like to ask the Minister is this. Today, very few cars are made with bench seats in the front, but that does not preclude drivers from carrying two people on the passenger side if they have a large family, as I have. I have in fact done this many times. Since the advent of seat belts I have found that, if the passengers are not too big, you can get the seat belt around two persons. Will that be legal? It is not illegal to put two people in the front, but will it be legal to put one seat belt round two people to get over the difficulty?
1.28 p.m.
Lord Bellwin: My Lords, as I expected, we have had a very lively and interesting debate. Although I shall try to respond to most of the points which have been made, I am sure that your Lordships will perhaps excuse me if I do not cover each and every single one. However, I assure your Lordships that I shall carefully read Hansard, and if there are some points which clearly concern some of your Lordships but which I have not covered, though I ought to have done so, then I shall certainly write to the noble Lord concerned.
As I said at the start of the debate, it is important to remember that we are discussing the implementation of the principle of compulsory seat-belt wearing, not the principle itself. From the variety of points which have been raised, I am sure your Lordships appreciate even more clearly than may have been the case before that our task in drawing up the regulations has not been an easy one. If we had accepted all the cases made to us for exemption, there would be few motorists to whom compulsion would apply, as indeed the noble Lord, Lord Somers, himself mentioned. The task of the police in enforcing the law would also have been an impossible one; and to have granted exemptions widely would also have given rise to a sense of unfairness among those who were not so exempt. It would have reduced the potential for saving casualties, which, after all, is the sole justification for compulsion.
If I can try to pick up some of the points that were made, the noble Lords, Lord Monson and Lord Mottistone, and others too have been concerned about short people and how this covers them. Surely, there is no safety reason for them not to wear seat belts. Section 33(b) of the Transport Act 1982 will require children under 14 to wear seat belts when riding in the front of vehicles. There can be no logical reason to exempt short adults. Short drivers may have to move the seat and the upper anchorage point which may be too high in relation to their height so that the belt might rub against the neck. I must stress that this is not dangerous—uncomfortable, Yes—but in the event of an accident a short person not wearing a seat belt (this is the point) risks far greater injury than those which may occur if a seat belt does not lie comfortably over the shoulder and across the chest. This is true of other people, again coming to Lord Monson's point, whose size and shape make seat belt wearing uncomfortable. The noble Lady, Lady Saltoun, was also concerned about this.

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It does not mean that nothing can be done to alleviate their problems. We have been in discussion with car and seat belt manufacturers to ensure that advice on the variety of ways in which seat belts can be made more comfortable is widely available to the public through the trade. One firm of seat belt manufacturers have set up a number of specialised seat-belt fitting centres throughout the country and I would urge anyone experiencing difficulty to go to their local garage or to contact the car manufactuers or seat belt manufacturers direct to find how their particular problem can be tackled.
In the same way, the noble Lady, Lady Saltoun, referred to elderly people and suggested that they should be exempt from compulsion. While I sympathise with those who may have difficulty in fastening and releasing seat belts, I do not think that we should value the lives of older people less highly than others. Furthermore, for those who have some medical problem, they can apply for exemption if on medical grounds and I think it important to remember that although drivers over 60 are the comparatively safe drivers, they represent 25 per cent. of car licence holders and exemption on such a scale would invalidate compulsion. On this same point, in any case—this is a point which the noble Lord, Lord Monson, raised—it would be almost impossible to draft a regulation to cover all the circumstances for all the shapes and sizes. The driver or rider would not know whether he was exempt or not until he went to court to prove his case. Similarly, a constable would have to make difficult on-the-spot judgments and the mind boggles when one thinks of him trying to do that.
In response to my noble friend Lord Mottistone on this point, we are satisfied that the range and flexibility of seat belts, taken with booster cushions, if necessary, are proved, for the purpose of the construction and use regulations, to be sufficient except in very rare cases. These rare cases could be covered by medical certificates if that was justified. I would want to say also that to prove the concern that one has in these matters, the construction and use regulations themselves have twice been amended in this respect since 1979, which is not a long time ago.
If I may try to pick up some of the other general points the noble Lord, Lord Underhill, asked whether certificates can be used abroad. The answer is that this is currently being discussed with the ECE—not the EEC—to see if a uniform arrangement on certificates across Europe can be reached. We hope that we shall progress on this. My noble friend Lord Nugent of Guildford, deeply involved in this whole matter and for whom I think many have cause to be very grateful, asked about the taxi and private hire car driver position.
The exemption we are giving is solely on the grounds of the possibility of attack. In saloon cars, the drivers are vulnerable. This aspect influenced us very much.
On the point of foreign visitors, they will have to use seat belts if they are fitted. Regulation 6(b)(ii) covers that. As to certificates abroad, this is something which has to be taken up. At the present time, foreign certificates in Great Britain are unlikely to be used. The registered medical practitioners will include a foreign doctor if suitably qualified. I would say to the noble Lord, Lord Monson, coming back to the point about short people, that the easiest way to alter
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the lock for those people is to lower the upper anchorage points; and the brackets for this, I am told, costs about £1 which I should not have thought was a major expense.
The point which without doubt has caused the most concern, I think it is fair to say, is that which concerns the medical certificate; the fee of £19 and all that surrounds it. What can one say about this? I tried to explain in my opening remarks why the Government have not used their powers to prescribe a fee. I would not accept that every doctor will automatically charge the recommended fee, regardless of the amount of work he has done. However, it has always been accepted in the earlier debates over the years on the principle of compulsion the doctors should be able to charge a fee. That will be a matter for agreement between the doctor and the patient who will be free to approach any doctor for a certificate. It would also be unreasonable to expect a doctor to consider carefully an application for exemption, and perhaps have to carry out a full examination, and then only allow the doctor to be paid if he decides that the certificate should be granted. That has been put forward.
When I look at some of the other suggestions that were put forward, the mind boggles. There were such suggestions as people should not be unreasonably requested to wear seat belts. That would take a little interpretation. There were one or two other similar suggestions. Coming back to the point of the fee, the noble Lord, Lord Porritt, I thought, spoke very clearly on this. I would correct one point that he made. The fee has not been agreed between the Government and the BMA. It is entirely for the BMA to decide how much to recommend to its members. We have discussed it with them at length. They still felt that that was the right amount. On the £19, if that should be the figure, I stressed when we covered this in the Transport Bill the other day—was it, my Lords, only the other day? At this stage I am not clear which day it was we took it on. I said then that, of course, there will be cases where the fee will be paid for those who cannot afford to pay it and it will be paid for through the avenues I mentioned then.
Several noble Lords expressed so much concern about the fee—my noble friend Lord Lucas, the noble Baroness, Lady Stedman, and almost every one—that we have to recognise that this is a matter of concern. I hope that the very fact that we have discussed it as we have today will come to the attention of all concerned and that it will receive still more consideration in due course.
May I say on the point that the noble Lord, Lord Airedale, raised about the psychological effect upon people who had been in an accident of some kind, that it would be up to the doctor to decide whether the wearing of a belt in their case would be inadvisable, and if he did so decide then he would issue a certificate.
The point that troubled the noble Lord, Lord Somers, on the release mechanism is also very important. I know that many people are concerned about the possibility of not being able to release a seat belt if they become involved in an accident, and also about the difficulties that some people may experience when fastening a belt. Someone who fails to wear a seat belt runs a much greater risk of being killed in an

487
accident than a person who wears a belt and cannot release it. That is not an answer but I think it is fair to say that.
However, since 1973 all belts fitted in new vehicles must be capable of being fastened and unfastened with one hand. The release mechanism must be marked in red and display the word "press" so that it is easily identified. The regulations also require the release mechanism to be within easy reach of the wearer and readily accessible to a rescuer. It is important that a rescuer is able to release both belts from one side of the car, especially as in some instances it is not possible to gain entry to one side of the vehicle. That is why the release mechanisms are in the centre of the vehicle. We certainly have not received any complaints from the emergency services about the difficulties of rescuing road accident victims who have been wearing seat belts. I am sure that your Lordships will agree that any slight differences in the types of release mechanism which may be found in different vehicles do not justify the rejection of the introduction of compulsion at this stage.
May I say to my noble friend Lady Macleod that I, too, have read the Daily Telegraph today and the article to which she referred. I would only say that seat belts are certainly necessary but they must be properly worn and fitted. There is no argument about that. Regarding the concern of my noble friend Lord Auckland about older belts, if someone wishes to change a belt he of course is free to do so so long as it complies with the construction and use regulations. However, there is no need for someone to change unless the belt is defective. If he does not, then of course there is no financial involvement.
I would comment to the noble Lord, Lord Monson, who referred to an observation made by the noble Lord, Lord Porritt, that belts are not designed to prevent accidents but to reduce the chances of death and injury when an accident occurs. We believe they will reduce these chances by 50 per cent. My noble friend Lord Mottistone asked whether these regulations will apply to vehicles delivering foodstuffs to shops in towns. Exemptions for vehicles constructed or adapted for the delivery of goods, and foodstuffs to shops will be covered if such vehicles are used but not if goods are delivered in saloon cars.
On the point of monitoring statistics, which troubled several of your Lordships, may I say that first of all the police already provide casualty figures which are used for the department's annual publication, Road accidents, Great Britain. It is our intention quite clearly that if we have a three-year experimental period, which is what we are talking about, then one would expect at the end of that time, in coming forward either for an end or for a renewal, to be able to give the kind of statistical information that people would expect to enable them to make a proper judgment as to where one would go from there.
I am sorry that I am not giving a detailed reply to the many fair points that were raised by the noble Lady, Lady Saltoun, but she knows that I will be in touch with her and will take the matter from there. What the noble Lord, Lord Mackie, suggests is not on. I can tell him that the construction and use regulations do apply. The noble Lord, Lord Richardson, referred
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to medical exemption; the Act says a medical practitioner. It is for the applicant to choose whom he approaches. He may always get a second or third opinion which is not unusual and unknown in medical matters.
I opened this debate by reminding noble Lords—and I have done so again—that this House has approved the principle of compulsion. We have now moved into the final stage of introducing compulsory seat belt wearing. However, might I also remind the House, as my noble friend Lord Nugent said, that three years after these regulations come into effect they must be renewed by both Houses before compulsion can continue. I can assure the House that the Government will be closely monitoring the effects of the law during this period so that we can report the results to your Lordships when we take the decision on whether or not compulsion should continue.
Until that time, whatever our views now, we have to accept that Parliament has decided in favour of compulsion, and that it is our responsibility to ensure that the law is sensible and is fair to everyone. To be fair, the law must allow an exemption only where there is a strong case for it. Moreover, it must only allow exemptions in as consistent a manner as possible. The more the number of exemptions, the more people will ask why they too were not exempt in their particular circumstances I can inform the House that we have had many diverse requests for exemption: from window cleaners to wildlife photographers. Some exemptions, like elderly drivers, would have exempted such a large proportion of the driving population that the law would have been very difficult to enforce. Other exemptions would have exempted so few people that they would equally have brought the law into disrepute. If we had exempted some people on certain short journeys, other than that allowed in the Act for goods vehicles, in fairness we would have had to exempt many more. In no time at all, we would have discovered that more people were exempt than were required to wear belts. The law would have been brought into disrepute before it even started, and Parliament's underlying aim to save lives and avoid serious injuries, would have been negated completely.
Even so, I should like to give one final assurance, to those who are still concerned that the exemptions have been drawn too tightly. This is an important change in the law, affecting many of us who travel by road. We believe we have found the right balance between those who have a justified claim for exemption, and the needs for an enforceable law. But let me stress that this does not mean that the regulations cannot be changed. If, after a reasonable period, we saw a need to reconsider any particular aspect, then we would, of course, do so.
On the one hand, we have those who fervently await the commencement of compulsory use of seat belts—many even want compulsory rear belts. They would prefer that there be less exemptions. On the other side, as we have heard, there are those equally firm and genuine in their beliefs. I was most impressed and moved by the way—not what she said—my noble friend Lady Macleod referred to her attitude in this matter. There are those who patently want to weaken—some would say to undermine—the parliamentary decision, by seeking to incorporate exemptions which

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would clearly make compulsion unenforceable. Neither extreme is acceptable, and certainly to make it all unworkable is not an option.
My noble friend Lord Balfour of Inchrye referred to this as a Government victory. I would have to remind him that the decision was taken on a free vote. The Government were neutral in the original decision-taking but, as he fairly and popularly reminded us yet again, now it is the will of Parliament that this be the law for a three-year experimental period. What we have before us for approval today, is a balanced régime, which is carefully thought through, which is practical and sensible. I think that this House, with its great reputation for fairness, for rectitude, and above all constitutional propriety, should now approve this order in good spirit and let all concerned get on with it.
Parliament decided on the principle. As promised, the Government have now produced the draft regulations necessary to implement that decision. I commend them to the House today for approval.
Lord Monson: My Lords, before the noble Lord sits down, when he says that Parliament has approved the principle of compulsion, would he not concede that eight days ago no fewer than 59 honourable Members and right honourable Members in another place, including the Leader of Her Majesty's Opposition, Mr. Michael Foot, Mr. Jo Grimond, Mr. Enoch Powell, Sir Angus Maude and Mr. Mark Carlisle, all voted against this particular order?
Lord Bellwin: My Lords, I hear what the noble Lord says, but I do not see that it in any way affects anything that I have said.
1.52 p.m.
On Question, Whether the said Motion shall be agreed to?
Their Lordships divided: Contents, 95; Not-Contents, 13.

DIVISION NO. 1

CONTENTS

Aberdare, L.

Davidson, V.

Airedale, L.

Davies of Leek, L.

Airey of Abingdon, B.

De Freyne, L.

Ampthill, L.

Denham, L. [Teller.]

Amulree, L.

Dormer, L.

Ardwick, L.

Elton, L.

Auckland, L.

Elwyn-Jones, L.

Avon, E.

Fraser of Kilmorack, L.

Aylestone, L.

Gardner of Parkes, B.

Banks, L.

Glanusk, L.

Bellwin, L.

Harris of Greenwich, L.

Belstead, L.

Hayter, L.

Bessborough, E.

Hornsby-Smith, B.

Bishopston, L.

Houghton of Sowerby, L

Boston of Faversham, L.

Jeger, B.

Brockway, L.

Jenkins of Putney, L.

Bruce of Donington, L.

John-Mackie, L.

Burton of Coventry, B.

Kearton, L.

Campbell of Alloway, L.

Killearn, L.

Cathcart, E.

Lane-Fox, B.

Cockfield, L.

Lauderdale, E.

Collison, L.

Llewelyn-Davies of Hastoe, B.

Cooper of Stockton Heath, L.

Lloyd of Hampstead, L.

Cork and Orrery, E.

Long, V.

Craigavon, V.

Longford, E.

Crathorne, L.

Lovell-Davis, L.

490

Lyell, L.

Saltoun, Ly.

McCluskey, L.

Sandys, L. [Teller.]

McFadzean, L.

Seear, B.

McFarlane of Llandaff, B.

Selkirk, E.

Marley, L.

Skelmersdale, L.

Massereene and Ferrard, V.

Slim, V.

Somers, L.

Milner of Leeds, L.

Stedman, B.

Milverton, L.

Strabolgi, L.

Mountevans, L.

Strathcarron, L.

Nugent of Guildford, L.

Swansea, L.

Oram, L.

Swinfen, L.

Orr-Ewing, L.

Teviot, L.

Phillips, B.

Trefgarne, L.

Pitt of Hampstead, L.

Trumpington, B.

Ponsonby of Shulbrede, L.

Underhill, L.

Porritt, L.

Vivian, L.

Rathcreedan, L.

Wallace of Coslany, L

Rea, L.

Wells-Pestell, L.

Reigate, L.

White, B.

Richardson, L.

Wigoder, L.

St. John of Bletso, L.

Young, B.

NOT-CONTENTS

Belhaven and Stenton, L.

Monson, L. [Teller.]

Boothby, L.

Shannon, E.

Cross, V. [Teller.]

Spens, L.

Ellenborough, L.

Stone, L.

Gainford, L.

Tryon, L.

Mancroft, L.

Wynne-Jones, L.

Merrivale, L.

Resolved in the affirmative, and Motion agreed to accordingly.

West Yorkshire (Parking and Transport) Bill
Returned from the Commons with the amendments agreed to.

Royal Assent
The Deputy Speaker (Baroness White): 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:

Finance Act,

Appropriation Act,

Stock Transfer Act,

Derelict Land Act,

Local Government and Planning (Scotland) Act,

Woolworths (Aberdeen Development) Order Confirmation Act,

Commercial Banking Company of Sydney Limited (Merger) Act,

Derwent Valley Railway Act,

West Yorkshire (Parking and Transport) Act,

Greater London Council (Money) Act,

Housing (Payments for Well Maintained Houses) Order 1982
2. p.m.
Lord Bellwin Lord Bellwin rose to move, That the order laid before the House on 6th July be approved.
The noble Lord said: My Lords, this modest order increases payments made by local authorities to owners

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and tenants of houses that have been declared to be unfit but which, nevertheless, have been well maintained. It has long been a feature of the compensation code that the structure of a house declared unfit is considered to be worthless. When such a house is compulsorily acquired for demolition, the "site value rule" applies; that is, compensation is restricted to the value of the site, cleared of buildings.
However, it was seen that the site value rule could prove to be harsh, where the owner or occupier had spent, maybe, considerable sums in maintaining the property, so additional payments were introduced. First, virtually all owner-occupiers now receive an "owner-occupiers supplement". This means, in practice, that they receive the market value of the dwelling. Where the house is subject to a demolition or closing order, and the local authority are not acquiring the site, the owner receives the supplement only, since he retains the site. Secondly, where there is no entitlement to an "owner-occupiers supplement", either because the house is not owner-occupied or the owner has not been in residence for the qualifying period of two years, a payment may be made for good maintenance. This recognises that it is possible for an owner or tenant to spend time and money in maintaining the house in good condition, notwithstanding the inherent defects which make it unfit, and it is these payments which the order increases.
A well maintained payment may be made to whoever has been responsible for the good maintenance, be it landlord or tenant, or it may be apportioned between them. It is for the local authority to decide. The amount of a payment is calculated by multiplying the rateable value by a "prescribed multiplier"—currently 3⅛. Where the house has been well maintained internally or externally only, half this amount is paid. The sum cannot exceed the difference between the site value and the market value of the property, as it would make nonsense of the compensation code if, in total, more than the market value were to be paid for an unfit house.
Well maintained payments have not been increased since 1972. On the other hand, repair and maintenance costs have risen considerably since then, and it is time that well maintained payments were brought up to date. We estimate from the RICS General Maintenance Index, that repair and maintenance costs rose by some 338 per cent. between the fourth quarter of 1972 and the second quarter of 1982. This order, therefore, increases the prescribed multiplier by the same proportion, with some rounding up to allow for increases in the index during the third quarter of 1982. The order increases the prescribed multiplier from 3⅛ to 14, and will apply to all payments where the compulsory purchase demolition or closing order from which the payment originates was made on or after 6th July 1982 (which was the date the order was laid before Parliament). We hope that this will further encourage owners of houses which are approaching the end of their lives, to keep them in good repair, and will bring greater justice to those who lose their property or home through slum clearance. I commend the order to your Lordships. My Lords, I beg to move.
Moved, That the order laid before the House on 6th July be approved.—(Lord Bellwin.)
Lord Ponsonby of Shulbrede: My Lords, may I thank the noble Lord for explaining the purpose of this order. It was considered by the Joint Committee on Statutory Instruments which had no comment to offer. The well maintained allowance is something which, as the noble Lord said, was introduced some years ago and it remedied an ill at that time which arose in slum clearance schemes. I am sure that the proposal that the multiplier should be increased is the correct one. It is true that the well maintained allowance would have increased automatically when there was an increase in the rateable value, and from time to time during the past 10 years the amount of the rateable value will have been increased as various revaluations took place. I wonder whether the noble Lord could say how these two factors will affect the amount of the allowance. Also, is this new multiplier now being introduced because the last revaluation of properties has not come forward as quickly as might have been expected? My Lords, we support the order.
Lord Bellwin: My Lords, I think that what the noble Lord is asking is what would be the effect of the order on a house. If I may, I will give an example which could help. A wholly well maintained payment on a house with a rateable value of, for example £75 would be £243·37½ at present, whereas the new payment would be £1,050, which is quite substantial. For a partially well maintained house, the existing payment would be £117·19 and the new payment would be £525. They are quite substantial increases—and so they should be, after all this time.
Lord Ponsonby of Shulbrede: My Lords, the point I was making was that if there was a revaluation of rateable values in an area and, in the process the rateable values were brought up to date and doubled, that would similarly have an effect on the well maintained allowance.
Lord Bellwin: My Lords, it would. But of course, as the noble Lord knows, there has been no revaluation since 1973.
On Question, Motion agreed to.

Supplementary Benefit (Housing Benefits) (Requirements and Resources) Consequential Amendments Regulations 1982
2.7 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne)The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne) rose to move, That the draft regulations laid before the House on 8th July be approved.
The noble Lord, said: My Lords, with your Lordships, permission, I propose to speak to the other two Motions standing in my name on the Order Paper within this group—that is, the Housing Benefits (Permitted Totals for Local Schemes) Regulations 1982 and the Housing Benefits Regulations 1982—at the same time, and will move those two formally when we get to them

493
A price of passing Acts containing regulation-making powers, as we have done recently in this context, is that regulations follow on inevitably shortly afterwards. We have before us today sets of regulations providing for the details of the implementation of the housing benefit scheme and the necessary amendments in the supplementary benefits scheme on matters concerning help with housing costs. We are bringing together two current schemes for help with housing costs. The interaction of the two schemes has confused claimant and adviser alike and we believe that the new arrangements—essentially to concentrate help with rent and rates in one place—are a considerable improvement upon the existing system.
Fortunately, in devising the new scheme, we have not started with a clean sheet. We have been able to draw upon the experience derived from the current schemes. We have also benefited from close working relationships with local authority representatives who have been able to advise us on the basis of their experience of administering the present scheme. I should like to place on the record our appreciation of the help that they, and the voluntary organisations we have consulted on the draft regulations, have been able to give us in drawing up the new arrangements.
The regulations do two main things. First, they provide for the way in which most supplementary benefit claimants will in future get help with their housing costs from their local authorities. Second, we have taken the opportunity to make a number of changes in the existing rebate and allowance schemes for people not on supplementary benefit. In bringing together the two schemes, and harmonising where possible the basic rules for help, we have had the advantage of two traditions from which we can draw, adapting what we believe to be the best features of each. May I mention at the outset that the changes have had to be introduced on an overall nil cost basis. We have had to pay for the improvements we have been able to make in a number of areas with savings elsewhere. But we have taken pains to achieve a financial balance.
I will not detain your Lordships with a detailed explanation of each of the regulations, but perhaps I could pick out a number of the more important aspects. Turning first to the housing benefit regulations, Regulation 3 provides for the commencement of the scheme in two stages. First, this November most supplementary benefit claimants who will be eligible for full help with their rent and rates will receive that assistance in the form of a rebate from their local authorities. Second, next April, the transfer of responsibility for the remaining supplementary benefit cases and the replacement of the existing scheme for other people will take place. The phased introduction is being achieved with a wide measure of agreement among the bodies representing authorities.
Regulations 6 and 7 deal with basic eligibility for help with rent and rates. I am pleased to say that we have been able to extend eligibility for help to a number of groups at present excluded. They include service and business tenants; caravan owners who pay site rents; houseboat dwellers; tenants of certain university accommodation and "shared" owners who rent part of a dwelling.
Regulation 10 deals essentially with the problem of short-stay hostel dwellers. There has been concern about the position of this group and some confusion about what we have achieved, so it may be helpful to put the matter on record. Hostel dwellers who are on supplementary benefit will continue to get their hostel charge, including an element for board, in their payments of supplementary benefit on the same basis as now. This regulation deals with another category of hostel dwellers; that is, those who are not receiving supplementary benefit. Normally they will be in work. Under the existing rebate scheme there has been some doubt about how quickly it is proper to treat such people as living in the hostel "as their home"—a basic condition of benefit. In summary, what we are now providing is that, once such a person has been in the hostel for 14 days, he is eligible for benefit. In that case, the eligibility is backdated to the date of the original claim so that no benefit is lost. This improves markedly on existing arrangements.
Regulation 13 sets out the needs allowances which formed the basis of calculation of benefit. These follow the arrangements of the existing standard scheme, but with one new improvement. From April, 75p a week will be added to the needs allowance of pensioners, thus increasing their benefit. Regulation 14 deals with income disregards.
Regulation 17, with Schedule 3, makes two particular improvements on the way help is given with rent. First, furniture charges will be eligible for help for the first time. Second, it is made clear that most service charges are to be eligible for help. I am sure that these improvements will be particularly welcomed.
Regulation 18 deals with a difficult area concerning non-dependant deductions. Both current schemes provide for reductions in the help from public funds where there are non-dependants in the household, but the existing rules differ appreciably between the two schemes. Clearly there has in future to be one set of rules. The Government prefer the structure of the existing local authority schemes. As a result, in future no deduction will be made for people under 18; and different rates of deduction will be made for people aged 18 to 20; those aged 21 to pensionable age; and those over pensionable age altogether.
At the same time, we are making a consequential change in supplementary benefit for people under 18 living in someone else's—normally their parents'—household. At the present they get a housing addition —£3.10 a week from November—to enable them to contribute to the household's overall housing costs. In the new scheme, however, no deduction from the parents' benefit will be made for such people. The specific addition in supplementary benefit for non-householders under 18 is therefore no longer logical and it will be eneded. We will, however, make transitional arrangements so that 16 or 17-year-olds receiving the addition next April when the scheme starts will keep the addition while they stay on supplementary benefit.
Regulation 19 sets out the way in which benefit is calculated. These incorporate changes in the tapers which are used to calculate entitlement when a claimant's income is above or below his needs allowance. Great emphasis has been placed in certain quarters on the losses for certain claimants so it is right for me to put the changes into context. What we have done is to

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reduce the help that will be given to claimants with income above the needs allowance in order to make improvements for the poorest category of claimants below the needs allowance.
Parliament has spent a great deal of time discussing the question of losers. As I have made clear, this reform must be on a nil-cost neutral basis and, once the tapers are adjusted in favour of the poorest pensioners, then the money has to be found elsewhere. It is a matter of priorities. We believe we have struck a reasonable balance.
Part V of the regulations cover the procedures for claims. I will mention one aspect, in Regulation 28. This provides for a duty on authorities to determine a claim within 14 days of receiving the necessary information or, if not practicable, as quickly as possible afterwards. This reflects certain concern which has been expressed about problems for claimants where there are delays in handling the claim, and improves on the existing position.
Before leaving the Housing Benefits Regulations, I should mention one final key area; review of housing benefits decisions. Regulations 44–50 spell out the claimant's rights in this respect. First, claimants must be notified and given certain basic information on determination of their claim. Secondly, they have a right to request a more detailed statement of how their benefit has been calculated. This is new. Thirdly, claimants may request an official review of the decision. Fourthly, if a claimant remains dissatisfied, he has a right to make representations to a review board, formally appointed by the authority. This also is new. The review board will be composed of elected representatives, acting independently of the authority. The claimant has a right to make representations in writing, to be heard in person and to call people to give evidence. Where, in the light of the hearing, a review board concludes that the original determination should be altered, the board's decision is binding on the authority.
I will now mention a separate but, altogether more modest, set of regulations—those dealing with the Permitted Totals for Local Schemes. These carry on the existing practice of setting a limit on the extra amounts authorities may spend by way of local schemes in standard cases. This is basically 10 per cent.
Finally, we also have before us consequential supplementary benefit amending regulations. Inevitably, a change of this importance has considerable knock-on effects. I will not go into the details of these amending regulations unless your Lordships wish me to do so, but it is a fact of life that amending regulations are by definition not always very easy to follow since they are altering existing provisions. But, briefly, the amendments to the Requirements and Resources regulations do two things. First, they provide for the removal of provision for help with rent and rates of supplementary benefit claimants who will be covered within housing benefit. And secondly, they provide for housing benefit supplement—the formal legal phrase for what has commonly been known as "topping-up". This will provide that an amount will be paid if a claimant has net housing costs to meet which are greater than the amount by which his resources exceed
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his requirements for supplementary benefit purposes. In conclusion, my Lords, I recognise that the regulations are extensive in their scope, but I hope that my short account has served to throw a little light on the most signficant aspects. I beg to move the first Motion standing in my name.
Moved, That the draft regulations laid before the House on 8th July be approved.—(Lord Trefgarne.)
2.18 p.m.
Lord Wallace of Coslany: My Lords, I would like to thank the noble Lord, Lord Trefgarne, for his somewhat brief summary of these extremely complex orders, which hit hard at the worst-off sections of the community. The noble Lord, as usual, was extremely competent in dealing with a difficult and complex situation. The noble Lord really is becoming quite expert in defending the indefensible.
One agrees with the concept of unified benefit which these orders and the Act from which they spring are claimed by the Government to achieve. But the method which the Government have chosen means that nearly 2 million people will be worse off when this scheme comes into operation. Once again, as with other social security measures introduced by this Government, it is designed to achieve financial savings at the expense of the worst-off—probably in the region of £16 million net. Local authorities face a tremendous task in operating these orders. Staff will obviously have to be increased just at a time when the Government's aim is to reduce local authority manpower. Mind you, my Lords, it is only fair to add that the Government are financially to compensate local authorities, at a time when they are introducing strict financial curbs on local authority spending in other directions.
The orders, particularly the Housing Benefits Regulations 1982, which contain some 51 regulations, are complex in the extreme, baffling, I might say, and a mass of gobbledegook. How local authority officers will cope, heaven alone knows! Certainly the beneficiaries, victims of extreme bureaucracy, will find it difficult to ascertain their rights, as will Citizens' Advice Bureaux and others helping people in difficulties and trying to translate into simple language complicated legislation for the benefit of those who are in difficulties.
As a former member of the Joint Committee on Statutory Instruments, I am well aware that the committee have no power to comment on or examine the merits on policy grounds of statutory instruments, but concern themselves only as to whether a Minister has exceeded his powers. Dealing with the draft Housing Benefit Regulations 1982, the committee have expressed concern over Regulation 42, and, for the benefit of the House, I will quote:
"That the Committee draw the special attention of both Houses to an unusual feature in Regulation 42 of the draft. Under this regulation a local authority is empowered to recover overpayment of housing benefit even when the authority itself had made the overpayment by its own mistake—even when the mistake is not one of fact but consists of a misinterpretation of the regulations. In oral evidence to the Committee, officials of the Department of Health and Social Security have stated that such a power is not unprecedented: a similar power can be found in paragraph 9 of Schedule 4 to the Housing (Finance) Act 1972. The Committee note, however, that this is not altogether a parallel case because the power given in that Act is confined to recovery by way of deduction from future payments. The Committee note with

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concern that this wide-ranging power could operate unfairly on sections of the community least able to protect themselves.
"The Committee learnt in evidence that a circular will be issued to authorities giving guidance on how they should exercise this power with care, for example by establishing whether a claimant could reasonably know that he was being overpaid. This circular is not mentioned in the Explanatory Note on the instrument and the Committee consider that in respect of a provision of this nature the widest publicity should be given to such guidance."
The suggested circular by the Department of Health and Social Security may possibly assist officials and local authorities, but it does not go far enough. What about the individual citizen? What plain language guide will be available to those sections of the community least able to protect themselves and, furthermore, to those worthy voluntary bodies who do their best to help people to obtain their rights. This House has a right to know the Government's intentions and to examine and discuss the Government's effort to translate this horrible mass of complicated gobbledegook into plain English.
I fully appreciate that a person's rights are set out in Regulations 44 to 50. So far so good. But the difficulty arises in formulating objections and appeals against decisions. To achieve this, detailed study of these regulations is involved, and that is where a simple, plain, straightforward explanation of the regulations is needed.
This leads me to the question of appeals. During all stages of the Bill in this House I continually raised, by amendments, the need for an independent appeals tribunal. The Government resisted these attempts every time. At least the Government have, at the last moment, come forward with something approaching an appeal body. The Government's proposals for an appeal body consisting of councillors—members of the local authority making decisions—is simply not good enough. How can local councillors who are members of a local authority make decisions and then sit independently. It is true that they will be dealing with appeals against decisions by their officials, but although proceedings will be private, councillors will also be dealing with private and confidential affairs of local citizens, some of whom they may know. I am not reflecting on the integrity of the average councillor, but let us face it, such an appeal body is not completely independent, but of course it is a cheap way out and typical of the Government's approach.
There is also the problem of course—as I know from former local authority experience—of getting councillors to find the time to sit on such bodies. It is sometimes very difficult to get an adequate number. Another very important point is that not all people are able to put their own case. Is it possible, (is it allowed?) that some person may represent an individual and speak for him? Unless that is done there cannot be proper justice carried out.
It is because of all this that I welcome the decision to monitor the effect of appeals and possibly to reconsider. I assume that the results will be given by the Minister in a report to Parliament. The final decision on the effect of monitoring and the success or otherwise of the appeal system should be taken by Parliament and not left to a Minister and his officials.
In many ways the regulations are undemocratic and unfair. In some cases they can divide families, particularly on the question of non-householders—
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the 16-and 17-year olds with one on low pay and the other unemployed. The Act and these orders have all been designed with one objective: to save money at the expense of the worst off sections of the community. This is not new; it follows the 5 per cent. reduction in unemployment benefit and the whole series of social security legislation and orders which continue to pour from this Government whose period of life is becoming all too slowly shorter. If one wants further evidence one has only to study the report of the Social Services Select Committee of another place to realise the extent and the effect of three years' erosion of the social services.
A democratically elected Chamber has passed these orders by a majority. Because of that it is not the practice of this House to oppose them, although recently, and a few moments ago, we have had examples showing that it does sometimes happen. However, it is a regrettable fact and we have no option. However, at least we have some consolation. All of us on this side of the House—and I include all Benches—have done our best and our share to improve the Act to some minor extent. To that extent, I am content, but I am not content with these orders which are complex and grossly unfair.
2.29 p.m.
Lord Banks: My Lords, I should like once again to join in thanking the noble Lord, Lord Trefgarne, for his lucid explanation of a complicated matter. I made clear when we discussed the Social Security and Housing Benefits Bill that we on these Benches wanted a unified housing benefit, but that we had misgivings about the actual proposals which the Government had put forward. In particular, we regretted the fact that the Government had decided to proceed on a no-cost basis, in spite of the fact that the Supplementary Benefit Commission had suggested that a scheme of this kind was not likely to be satisfactory unless there were some additional resources made available to it. We doubted the wisdom of giving the bulk of the administration to local authorities, first, because of the burden on the local authorities themselves and, secondly, because of the number of offices to which people would have to go. Those entitled to housing benefit supplement, for example, may have to deal both with the local authority and with the DHSS, instead of just with the DHSS, as is the case now.
I am afraid that our fears on these various points have not been mitigated by reading the 51 regulations. Indeed, too much has been left to the regulations. There was too little in the Bill, so that inadequate parliamentary discussion would be given to the details of the Bill in its final form. As the noble Lord, Lord Wallace, said, the whole matter is tremendously complicated. Indeed, we were saying this about the supplementary benefit regulations when they were introduced in 1980. It seems that our social security system and our legislative system together are incapable of simplicity. Indeed, the Under-Secretary of State for Health and Social Security said at column 789 in another place on 26th of this month:
"… there is no set of regulations in the whole of social security which would be widely understood by most of the claimants seeking benefit."

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I wonder whether the Government are confident that potential claimants will know what their entitlement is or, indeed, have any idea of what it might be. In view of the complication, I also wonder whether the Government think that they are allowing sufficient time for the detail to be absorbed and for the people who will have to handle the matter to be trained. After all, as the noble Lord, Lord Trefgarne, pointed out, for some of the people involved the scheme will begin this autumn.
On the question of gains and losses, to which the noble Lord referred, some 2 million people will lose out, although maximum losses are limited to 75p per week, but that limit is only to be observed for one year. Even then, 75p per week is quite a lot for those on low incomes, and nearly 500,000 will pay more after the first year has elapsed. I should like to ask the noble Lord this question: Is it correct that to ensure no losers at all would cost only about £30 million or 1 per cent. of expenditure on housing benefits in 1981–82? If that is so, would it not have been better to spend that 1 per cent. in order to ensure that the scheme got off to a better start?
Is it not true also that the proposed new system of deduction from housing benefits for non-dependants' contributions can leave a tenant with up to £2·15 per week less? This would be £1·40 resulting from the change in the system of deductions and 75p from the change in the tapers. Am I right in thinking that in these cases the 75p limit does not apply overall? How do the Government propose to make sure that those who are entitled to housing benefit supplement actually get it? There is no statutory requirement for local authorities to assess entitlement to housing benefit supplement. Should there not be such a requirement?
So far as the processing of applications is concerned—and this is a point to which the noble Lord himself referred—is not the regulation requiring that applications be processed by local authorities within 14 days rendered ineffective by its own wording? It reads:
"An authority shall determine a claim within 14 days of being furnished with such information and evidence as it reasonably requires for the purpose of determining that claim, or if that is not reasonably practicable, as soon as possible thereafter."
Does not that phrase—
"if that is not reasonably practicable, as soon as possible thereafter"—
provide potential justification for widespread and lengthy delays? These regulations have been produced, if not in a hurry, at least quickly, and I suppose it is inevitable that mistakes will be made, as they were in the case of the Supplementary Benefit Regulations in 1980. Can the Minister give us an assurance that immediate steps will be taken to amend the regulations if anomalies are discovered?
The noble Lord, Lord Wallace, referred to the appeal system. As I made clear during our discussion of the Bill, we on these Benches share the feelings which the noble Lord, Lord Wallace, expressed about the appeals procedure which is included in the regulations. In our view it is unsatisfactory. We do not accept that the way to arrange this is through committees of councillors who may have a direct interest in the matter, and who may be advised by those who have made the original decision. We think an independent appeal
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machinery, operated through the Supplementary Benefit Appeal Tribunals with further appeal to the Social Security Commissioners, would be much more satisfactory. I shall not detain the House any longer. I think I have said enough to indicate why we on these Benches are not at all happy about the introduction on a no-cost basis of this cumbersome and complex system.
2.37 p.m.
Lord Kilmarnock: My Lords, from this Bench I also should like to thank the noble Lord, Lord Trefgarne, for his rapid review of the principal regulations. We agree on balance with the concept of a unified housing benefit. As a result of the change to a direct waiver of rent and rates by local authorities people will not have to worry about getting into arrears, or retaining money for rent at the expense of food or heating. On the other hand they will not receive the rebate money, and will thus lose a certain flexibility in the use of resources. In a tight week it will no longer be possible to borrow from the rent to keep going.
As I said, it is a question of balance, and on the whole we support this scheme. However, along with my ally, the noble Lord, Lord Banks, I have certain reservations and there are one or two questions I should like to put to the Minister. First, is it true, as was suggested in another place and as was alleged by the noble Lord, Lord Wallace of Coslany, that a saving of £16 million will be made by the Government under the new arrangements? In another place the Minister introducing these regulations spoke of "an overall cost neutral basis". The noble Lord, Lord Trefgarne, used a similar phrase. I think his phrase was "an overall nil cost basis".
Can the noble Lord assure the House that this principle of neutral costing has been strictly adhered to? As the noble Lord, Lord Banks, said there are many grounds on which it would have been desirable for an increase of resources to have been made available, but the Government's claim is that this is a cost neutral basis. I should be grateful to the noble Lord if he could give us the assurance that that is in fact the case.
Next, the implication for local authority staffing. Regulation 28, as the noble Lord, Lord Banks, pointed out, imposes an obligation on authorities to determine all claims within 14 days, or as soon as possible thereafter. They must provide a written statement explaining their decision within 14 days, if so required. Then there is the responsibility for the whole new appeal procedure. Quite apart from the merits or, demerits, of these proposals, are there not important implications here for the level of the rate support grant? Is there not a danger that heavy new responsibilities are being put on to authorities at a time when they are being told to reduce their staffs? Finally, what about the accounting procedures between the DHSS and local authorities? Will the department promptly fund the authorities for the rents and rebates that they have forgone?
2.40 p.m.
Lord Trefgarne: My Lords, perhaps I should first deal with the point made by all three noble Lords who have spoken—and I am grateful to them for their contribution to this debate—about the nil cost aspect of these proposals. I can confirm that these proposals

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have been devised on the assumption that they should not cost any more, but equally they are not a measure of any saving. The noble Lord, Lord Wallace, suggested £16 million as being a net saving from the proposals. I assure him, as I said earlier, that we have taken great pains to achieve a nil cost to these regulations, and that means a nil saving as well, and I hope that is the assurance the noble Lord, Lord Kilmarnock, is seeking.
Turning to the main thrust of the main points made by the noble Lord, Lord Wallace, when he criticised the complexity of the regulations and emphasised the need for plain English leaflets explaining the individual rights, the complexity of subordinate legislation is often criticised and I certainly accept that social security legislation tends to be more complex than most. But as your Lordships will appreciate, we are dealing with people's entitlement to benefit in a wide range of circumstances and it is surely right that his entitlement should be given the force of law. The alternative, in this example, is to give authorities a very wide range of discretion, and the inevitable outcome of widely varying decisions throughout the country and almost certainly widespread public dissatisfaction. The aim must be to strike the right balance, and I think we have done so. Entitlement to benefit is set out in detail at the price, I confess, of some complexity of drafting, but authorities are also given the power—if your Lordships will refer to Regulation 22—to pay more benefit in exceptional circumstances.
Having said that, I recognise that the regulations, while forming the essential legal foundation, must be translated into plain English, both for the benefit of those who will administer the scheme and for the recipients, potential or actual, of the benefit; so they will be supplemented by other material. First, we shall shortly be issuing a full circular on the scheme. That will provide a detailed guide to the regulations and will make clear the way in which authorities will be expected to administer the scheme. The circular will be a public document available to those who advise claimants.
In the circular—this picks up another point made by the noble Lord, Lord Wallace, in connection with overpayments—we shall spell out how we expect authorities to use their recovery powers. Where the overpayment arises because of claimant error, we will expect authorities to make a serious attempt to recover the money. Where an overpayment arises because of an official error, authorities are expected to consider the circumstances of the case. If the claimant could reasonably have been expected to know he was receiving too much money, authorities are expected to seek recovery, unless that would result in hardship to the claimant. Where the overpayment arises because of an official mistake—for example, because the authority has miscalculated the claimant's entitlement—authorities will be expected either to take no recovery action or not to pursue recovery beyond an initial request for repayment. This will be particularly relevant when the amount overpaid in each week was sufficiently small and there was no reason for the claimant to have spotted the error.
Reverting to the way in which we shall publicise these arrangements—particularly the plain English arrangements, if I may refer to them in that way—
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there will, secondly, be a number of ways in which the scheme will be explained to claimants. Each supplementary benefit claimant will be told how the change affects him; the present leaflets on rebates and allowances will be amalgamated into one general leaflet explaining the scheme; posters will be produced for display; and a detailed explanation of the revised supplementary benefit rules for housing costs will be contained in the supplementary benefit leaflets SP8 and SP9.
As I said in my opening remarks, claimants will for the first time have the right to request a detailed explanation of how their housing benefit has been assessed. Therefore we have aimed to ensure that claimants are given a proper explanation of the changed arrangements for help with housing costs, and I can assure your Lordships that we shall do our best—it is not always easy, if we are to avoid potentially misleading advice—to ensure that the material for which we are responsible will be written in language which the claimant can understand.
I turn now to the question of appeals which was raised by the noble Lord. We believe that we have gone a long way to meet the concerns that have been expressed on this score. I realise that some people say that we have not gone far enough, but I should like to make two points. First, people inclined to cricitise should perhaps compare carefully what we are proposing with what is formally provided for in the existing regulations, and we hope that we shall be given appropriate credit for the improvements. Secondly, we have every confidence that councillors, busy people though they are, will take seriously the task of reviewing their officials' decisions in the light of claimants' representations. That seems to us a quite proper role for councillors. Some of the comments on the review provisions imply little faith in the independence of elected representatives, but that certainly was not the view of the noble Lord, Lord Wallace, this afternoon.
We believe that the review arrangements will work well as a protection of claimants' interests. However, we accept that we must keep an eye on what happens in this important area, and we shall certainly make arrangements to monitor the workings of the review procedures. In that context the noble Lord, Lord Wallace, asked me about the question of representation before the councillors. Regulation 48(5) gives the claimant the right to be accompanied or represented at the hearing by another person—which I hope is what the noble Lord had in mind.
The noble Lord, Lord Banks, asked me about the estimated cost of avoiding any loss to anybody under the arrangements—I think that that was the thrust of his question. We estimate that the cost would be £50 million to make it a zero-loss situation. The noble Lord mentioned a figure of, I think, £30 million. As I say, in our estimation it is nearer £50 million, and I am sorry to say that the funds were simply not available to achieve that objective. The noble Lord, Lord Banks, also asked about the timetable for the introduction of the arrangements. For the most part the local authority associations have accepted that the operational timetable that we have for the introduction of housing benefit is feasible.
The noble Lord asked me finally about the 14-day

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rule. I think that there might be a misunderstanding in this connection. The noble Lord asked me in particular why local authorities do not have a duty to assess the topping up amounts, should they be applicable. To calculate housing benefit supplement it is first necessary to assess how much money a person has in excess of his supplementary benefit requirements. That can be done only in the context of a claim for supplementary benefit. I hope that that clarifies the point that the noble Lord had in mind.
Those are, I think, the principal points that were put to me. If I have missed any, I shall hasten to write to the noble Lord in question. In the meantime, I hope that your Lordships will see fit to approve the first Motion standing in my name on the Order Paper.
On Question, Motion agreed to.

Housing Benefits (Permitted Totals for Local Schemes) Regulations 1982
Lord Trefgarne: My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 8th July be approved.—(Lord Trefgarne.)
On Question, Motion agreed to.

Housing Benefits Regulations 1982
Lord Trefgarne: My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 8th July be approved.—(Lord Trefgarne.)
On Question, Motion agreed to.

United Kingdom Central Council for Nursing, Midwifery and Health Visiting (Electoral Scheme) Order 1982
2.50 p.m.
Lord Trefgarne: My Lords, I beg to move the fourth Motion standing in my name on the Order Paper—namely, that the United Kingdom Central Council for Nursing, Midwifery and Health Visiting (Electoral Scheme) Order 1982 be approved.
Some of your Lordships may be familiar with the setting up of the United Kingdom Central Council and four national boards for Nursing, Midwifery and Health Visiting under the Nurses, Midwives and Health Visitors Act 1979, but I will very briefly go over the background and bring your Lordships up to date on what has happened since the Act received Royal Assent in April 1979, and how the election scheme fits in.
The Act arose out of the report in 1972 of the Committee on Nursing chaired by Professor Asa Briggs—now, of course, the noble Lord, Lord Briggs—which recommended a unified statutory structure for nurses, midwives and health visitors. The bringing together of all specialist interests into one structure should make it possible to identify needs across the board, and to examine the interrelationship between basic and post-basic training. The ensuing Nurses,
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Midwives and Health Visitors Act 1979 made provision with respect to the education, training, regulation and discipline of nurses, midwives and health visitors, and the maintenance of a single professional register. It does not implement any of the detailed Briggs recommendations on nurses' education and training, but establishes the framework on which future changes can be made. This framework is provided by the establishment of the United Kingdom Central Council for Nursing, Midwifery and Health Visiting, and of four national boards, one for each country in the United Kingdom. They will replace the nine existing statutory and other training bodies which will be dissolved under the Act.
The Government see the setting up of the five new bodies as the means of developing the education and training of nurses, midwives and health visitors throughout the four countries of the United Kingdom, and we place a high priority on this task. Most of the Act has riot yet come into force, but the United Kingdom Central Council and the four national boards were set up in November and September 1980 respectively.
With effect from 15th September 1983, each of the national boards will consist partly of members directly appointed by my right honourable friend the Secretary of State and partly of elected members. The elected members will be elected under an electoral scheme proposed by the Central Council and approved by my right honourable friend, and shall, in accordance with the Act, form the majority of each national board. The electoral scheme is being given effect to by the order before your Lordships.
I turn now to the details of the scheme. It is made up of three main elements: the creation of an electoral roll, the securing of candidates and the voting method. The electoral roll has been created on the basis that nurses, midwives and health visitors will be invited to "opt in" to the election scheme. Following a publicity exercise, all nurses, midwives and health visitors will be invited to take part in the election, and their eligibility to do so will be confirmed from existing records. Secondly, on the securing of candidates, the scheme proposes that there should be three categories of candidates; namely, practising nurses, either registered or enrolled; practising midwives; and practising health visitors. It also proposes that the proportion between these three categories should be four practising nurses to one practising midwife and one practising health visitor.
It is also hoped, and expected, that the third aspect of the election, the voting method, will enable the various professional groups to achieve adequate representation. The single transferable vote method was chosen as being the most likely to secure a broad representation, as the experience of the Electoral Reform Society, who have been advising the Central Council on the scheme, had shown. During consultation, considerable support for this system was demonstrated. Should the interests of minority groups fail to secure adequate representation, my right honourable friend would look at the range of experience of the elected members in considering his appointments, and would thus have an opportunity to rectify such gaps in representation.
Finally, the election scheme is designed for the first election only. It will be thoroughly evaluated by the

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Electoral Reform Society, to assess, for example, the extent to which representative assemblies are achieved, and the evaluation study will consider in time for future elections whether this is the most appropriate arrangement. My Lords, I beg to move.
Moved, That the draft order laid before the House on 8th July be approved.—(Lord Trefgarne.)
2.55 p.m.
Lord Wallace of Coslany: My Lords, I should like to thank the noble Lord, Lord Trefgarne, for his explanation of this order, and assure him that he is on a less sticky wicket than he was in the case of the previous discussion. In general, I would welcome this move; and no doubt the House will probably have the beneficial advice of the noble Baroness, Lady McFarlane, who has had a most distinguished career in the nursing field. This is a body which is partly-elected, partly-appointed. I am wondering how the appointed members will be selected. I assume that the Minister will have a submission of a panel of names from which he can make a choice. I assume that probably some of the non-elected might even he on that list. One of the worrying features of this is the representation of nurses involved in the mental health field which, we know, is rather overlooked and has been neglected for some years. The Minister gave some assurance that any balance would be adjusted when the names are appointed by the Minister.
Another matter which intrigues me is this. I notice that on the nomination paper the date of birth entry is optional. I do not know whether this is an attempt at sexual discrimination by the Government or the Government exercising absolute discretion. One knows that some ladies are a bit sensitive about their age, and some of us males are. That is a light point. I hope that this scheme will work adequately. We have an assurance that it will be monitored. I think it is a step in the right direction. I support the order.
Lord Banks: My Lords, I should like to thank the noble Lord for his explanation and to say that we on these Benches support the order. I rise principally to welcome the adoption of the system of the single transferable vote, and I am glad that the noble Lord has told us that this was felt to be the way in which fair representation could be obtained. I look forward to the Government's adoption of this system in other spheres.
2.57 p.m.
Baroness McFarlane of Llandaff: My Lords, I rise to thank the noble Lord, Lord Trefgarne, for placing this order before the House and to support it. In doing so, I would declare my interests, because I am a member of the United Kingdom Council for Nursing, Health Visiting and Midwifery, chairman of the English National Board and also chairman of one of the boards which will be dissolved as the Act becomes operative—that is, the Joint Board of Clinical Nursing Studies. In these capacities I have been party to the discussions on the electoral scheme before the House, and I give it my full support.
The noble Lord has outlined the background to the 1979 Nurses Midwives and Health Visitors Act which followed closely the recommendations of the report of
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a committee on nursing chaired by the noble Lord, Lord Briggs. It is in achieving the structural background for the advances in nursing that this electoral scheme is before the House. I think that the profession regard the electoral scheme as being highly important to see that we get representative assemblies. It is important not just to the profession but in the public interest, because the reforms envisaged by the Briggs Report are now long overdue and, as we enter a highly technical age with a modern health service, a service which needs to be highly sensitive not only to the physical needs, but also the phychological and social needs of the long-term sick, the mentally handicapped, mentally ill and elderly people, the proper governance of the profession is in the interests not only of the progress of the profession but of the service of society.
The representative members of the four national boards and the members appointed directly by the Secretary of State to the United Kingdom Central Council, after consultation with the professions, have been conscious that their first responsibility must be to develop an electoral scheme which would lead to representative assemblies and to submit a scheme to the Secretary of State within two years. This has occasioned a great deal of work, and I should like to enlarge on what the noble Lord has laid before us as to the mechanism whereby the scheme has been evolved and the wide consultation that the council undertook in order to achieve this scheme. It had a five-part staging in consulting the professions. First, a working group of the United Kingdom Central Council was set up. This was very ably chaired by Miss Sheila Jack, herself a qualified nurse, health visitor and midwife.
The scheme evolved by the working group was submitted to the four national boards. After consideration and modification by the boards, it went back to the working group for modification and then out to the profession for consultation. The comments of the profession were received back by the working group and the final report was submitted to the United Kingdom Central Council, debated and approved by them. I think that we can say therefore that there was the very widest possible professional discussion before this scheme was evolved, although the conflicting views of special groups in the profession nonetheless have been considered and been given careful consideration.
As members of this House will have heard, after examination of different voting methods it was agreed with very few reservations that the single transferable vote method was that most likely to ensure a broad representation of different interests in the profession. The three professions have a highly complex internal structure with major specialisations such as—as the noble Lord mentioned—psychiatric nursing, mental handicap nursing and district nursing as well as midwifery and health visiting, nursing education and nurse management. Indeed, a piece of research recently carried out in my own department of nursing in the University of Manchester attempted to identify the specialties in nursing as seen by the nurses themselves and by their employers.
My recollection is that over 50 specialties were named and there was no consensus about the bases on which the specialties should be identified. This clearly creates an anomalous situation if the council chose to

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specify some specialties for reserve categories, and not others. Some, like psychiatric nursing and mental handicap nursing, are long-standing specialties and have held special statutory qualifications for many years. Others, like occupational health nursing and district nursing, were named in the 1979 Act. Still other groups of specialists within the profession—nurse educators and those with special clinical qualifications—have been equally anxious to have reserved places in the electoral scheme for occupational groups within the nursing category.
The position was forcefully put to the council by professional organisations and unions. But the council was of a view that such was the multiplicity of specialist groups within the profession seeking reserve places that it would be almost impossible to administer on an equitable basis, and that any attempt to do so would erode the effectiveness of the single transferable vote in achieving broad representation of interests. So the council reached their conclusion as an attempt to reconcile the wide-ranging and conflicting views of the bodies it consulted.
I have singled out what I believe to be the most contentious decision of the council in respect of the electoral scheme in an attempt to underline some of the reasons for the scheme put forward. I would suggest that the interests of special groups within the profession will be ensured, first, by the single transferable vote and its ability to secure wide representation, and also by the appointment of statutory and other committees for the special educational interests of special groups by the appointments made by the Secretary of State, after consultation with the profession and, in the last resort, by the evaluation of the whole scheme to be carried out by the Electoral Reform Society after the first election. In the meantime, after meeting nurses, midwives and health visitors in many parts of the country, listening to their representations and receiving deputations, as chairman of the English National Board, from mental nurses and speaking to many other groups of interested bodies, I am convinced that the scheme as laid before the House is worthy of support.
Lord Trefgarne: My Lords, I am grateful to your Lordships for your reception of this Motion, and I am particularly grateful for the informed intervention of the noble Baroness, Lady McFarlane. I hope that your Lordships will now approve the order.
On Question, Motion agreed to.

Companies (Accounts and Audit) Regulations 1982
3.6 p.m.
Lord Lyell Lord Lyell rose to move, That the draft regulations laid before the House on 6th July be approved.
The noble Lord said: My Lords, I beg to move the regulations which are before the House today and I hope that your Lordships will accept them. The regulations which your Lordships are now to consider are a corollary to the Companies Act 1981 and they deal with two separate matters: merger accounting and the reports of auditors.
If I may turn first to merger accounting, your Lordships may recall—and I put this politely—the extensive discussion of this subject during the passage last year of the Companies (No. 2) Bill. As I am sure your Lordships will remember, when that Bill returned to this House for consideration of amendments made in the other place, my noble and learned friend Lord Mackay of Clashfern explained how the clauses in the Bill dealing with merger accounting—which subsequently became Sections 36 to 41 of the Act—had been revised to take account of the recommendations of a working party which, I as am sure the noble Lord, Lord Bruce of Donington, is aware, was set up by the CBI, the Law Society and the Consultative Committee of Accountancy Bodies. My noble and learned friend also explained that certain recommendations of the working party would be implemented by regulations under Section 454 of the Companies Act 1948, as amended by Section 18 of the 1981 Act, since this would enable further consultations on the detail and would provide greater flexibility for the future. These regulations implement those remaining regulations which concerned disclosure of information in companies' accounts following a transaction under Section 37 of the 1981 Act.
If I may now very briefly turn to the question of merger accounting, I am sure your Lordships will be aware that it is an extremely complicated issue. Briefly, Section 37 of the 1981 Act permits merger accounting in circumstances where one company allots shares at a premium, under an arrangement whereby it achieves a holding of 90 per cent. or more of the equity share capital of another company. It thus allows such a company to make an acquisition without necessarily setting up a share premium account as would otherwise be required by Section 56 of the Companies Act 1948. Your Lordships will, I am sure, recall that the provisions in the 1981 Act resulted from demands for changes in the law, following the High Court decision in the case of Shearer v. Bercain.
Under these new regulations, a company obtaining merger relief under Section 37 will have to disclose in its accounts for the financial year in which the transaction takes place certain particulars of the transaction, such as the name of the acquired company and details of the shares involved in the transactions, the accounting treatment adopted and any pre-acquisition profits or losses included in the group accounts. The acquiring company will also have to disclose for that year, and for the next two years, details of how the profit or loss is affected by any profit or loss arising on the disposal, whether direct or indirect, by any member of the group, of shares in the acquired company or of assets which were fixed assets of the acquired company or its subsidiaries.
The thinking behind the proposals of the working party for these requirements, and thus our aim in the regulations before us, is that, in the light of concern that merger accounting might be used in a way which obscured the realities of the company's transactions, accounts prepared after a merger should contain adequate information regarding the accounting treatment adopted and, as I hope I have fairly briefly, but in a somewhat tortuous way, described, its effect on the results disclosed in the accounts.
The second part of the regulations which are before us

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this afternoon, Regulation 3, makes a simple amendment to Section 14(3)(b) of the Companies Act 1967. This, at present, requires auditors of banks, insurance or shipping companies, which take advantage of the disclosure exemptions which are available to such companies under Schedule 8A of the Companies Act 1948, to state in their report whether, in their opinion, the accounts have been prepared in accordance with the Companies Acts of 1948 to 1980. Certain provisions of the 1981 Companies Act, such as those on merger accounting, are relevant to the accounts of these companies and so it is at least desirable that auditors should also comment on the compliance with the 1981 Act. This Regulation 3 makes the necessary amendment which corrects a minor error in the 1981 Act. Your Lordships have shown commendable patience and kindness in bearing with me in this brief explanation of these regulations which are before us this afternoon, and I beg to move.
Moved, That the draft regulations laid before the House on 6th July be approved.—(Lord Lyell.)
3.13 p.m.
Lord Bruce of Donington: My Lords, the House will be indebted to the noble Lord for the very detailed and clear explanation he has given of these regulations. It will not have escaped notice that, although sometimes regulations meet with disagreement among those Members of your Lordships' House who happen to be members of the legal profession, when they concern the accounting profession, as these regulations undoubtedly do, there is a striking degree of unanimity. In fact, the explanation that has been given, with his customary clarity, by the noble Lord enables me to agree with him entirely and to say that we on this side of the House believe that these regulations should be brought into force.
At the same time, and since the accountancy profession is in unanimity across the Chamber on these matters, perhaps the noble Lord will forgive me if I say that these are further regulations, among many, which underline the necessity for some consolidation of company law. We agree about and accept the necessity for much argument among the legal profession over the various aspects of company law, but it is the accountancy profession that in the main is concerned, together with those directors of companies and managements of enterprises which are vitally concerned by Companies Act provisions.
I know I am knocking at an open door when I ask the noble Lord opposite to bear in mind that for some considerable time we have had the Companies Act 1948 as the main provision, since when we have had the Companies Act 1967, the Companies Act 1976, the Companies Act 1980 and the Companies Act 1981, certain important sections of the last two Acts having been brought in because of European Community legislation. But the time has now come when there really must be some consolidation. Even this particular section of the 1948 Act which is amended by the 1981 Act and under which this regulation is issued has already given rise to a number of regulations. I refer only to Section 18 or, in the old Act which is amended, to Section 454.
In this section alone there are cross-references to the Banking Companies Accounts Regulations 1970, the
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Companies Accounts Regulations 1970, the Companies Accounts Regulations 1971, the Companies Accounts Regulations 1973, the Companies Annual Return Regulations 1977, the Companies Accounts Regulations 1979, the Companies Directors' Report (Political and Charitable Contributions) Regulations 1980 and the Companies Directors' Report (Employment of Disabled Persons) Regulations 1980. These are regulations which have been issued in respect of one section of the Companies Act 1948, as amended by Section 18 of the 1981 Act alone. Members of the legal profession in your Lordships' House and in another place may find these regulations fertile ground for argument and perhaps litigation, although it is not noticeable that those Members of your Lordships' House who are of the legal profession are abundantly represented here this afternoon. However, businessmen and directors of companies are vitally concerned with these matters. Therefore, if only for the sake of students of the accountancy profession who have to wade through this mass of regulations and Acts before they are able to acquire a working knowledge of them, may I implore the noble Lord, who belongs to the same profession as I do, to make representations to his right honourable friend that at the earliest possible opportunity there ought to be a consolidation Bill. There ought to be a comprehensive measure that is readily available to the businessman and to the company director, as well as to the student, in order that we do not have to cross refer and cross refer, to a point where tracing even the meaning of a regulation and its impact on a business becomes a matter of very arduous labour.
I gave notice to the noble Lord of the fact that I was going to raise this aspect. It does not, however, detract from our support for the regulations themselves; nor does it detract from our admiration for the very clear manner in which the noble Lord has presented them on behalf of Her Majesty's Government.
Lord Lyell: My Lords, failing further discussion of the detailed regulations which are before us today—I look round your Lordships' House and, alas! I find nobody willing to join the lists with the noble Lord, Lord Bruce of Donington, and myself in these, if not abstruse, certainly complicated fields of company accountancy—first I should like to thank the noble Lord for his reception of these regulations which we believe are detailed but, above all, are important. I feel very much for the noble Lord. Indeed, every time that I go to my little cupboard to remove what I call my "company package", it is something akin to a Charles Atlas course because, as the noble Lord will know—because he read out the particular Acts—it requires some feat of strength to extract and, above all, to hold on to all the Acts, let alone every single one of the regulations which were so clearly introduced and mentioned by the noble Lord. All these Acts and regulations have to be tied in, and allocated to, the "master" Act, the 1948 Act, which itself was in the nature of a consolidation Act of all the companies legislation up to 1948.
I am very pleased to assure the House, and especially the noble Lord, Lord Bruce of Donington, who speaks with a very sure and robust voice for the accountancy profession in which he is currently engaged, that consideration of the matters he has mentioned and, above

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all, consolidation of all the regulations and disparate Acts, is now a major priority of the Department of Trade in the field of company law.
I am able to assure the noble Lord, Lord Bruce of Donington, that good progress is being made, but, as the noble Lord and I are exceptionally well-qualified to know after our experiences with the 1980 and 1981 Acts, it is and will remain a mammoth job. Even to the noble Lord, Lord Bruce of Donington, I cannot say when we shall have consolidated companies Acts. But I will assure him and your Lordships that every effort is being made to achieve that happy outcome at the earliest possible date. It is a major priority in the department and I am sure that the noble Lord will accept that.
I am afraid we are not able to say in which year the new consolidated Acts will appear, but we do appreciate the remarks made by the noble Lord, Lord Bruce of Donington, not least in respect of the young students who, perhaps, are currently involved this year in attempting to master the entire field of company law. It is close to 18 years ago since I was studying this particular Act, and I am pleased to see that Section 245 is still in its appointed place. I recall entering in some exam papers the powers of the liquidator, and I am pleased that they still come to mind, as I am sure they will still be fresh in the mind of the noble Lord, Lord Bruce of Donington.
I hope that I have answered to the best of my ability, and with the usual clarity that is afforded to me by the department, the queries raised by the noble Lord. I hope that I have put to rest some of the fears which were in his mind—not least as a forceful and robust spokesman for the accountancy profession. I hope that they will note our concern for consolidation of all the companies Acts. With that, I beg to move the regulations before us this afternoon.
On Question, Motion agreed to.

Greater London Council (General Powers) (No. 2) Bill
Brought from the Commons, read a first time and referred to the Examiners.
Civic Government (Scotland) Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments were ordered to be printed.
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